Delhi HC Sets Aside Income Tax Action Against Rajat Sharma-Owned India TV's Parent Company Over Alleged Unaccounted Foreign Remittances

The notice was issued following a survey conducted by the Income Tax Department at the J&K Bank back in 2019, revealing that the company had made foreign remittances amounting to ₹6,50,84,454/- during AY 2017-18, which did not tally with the amounts reflected in its bank statement.

A division bench of Justices Vibhu Bakhru and Tejas Karia, however, noted that “there is a question as to the credibility of the information” set out in the reassessment notice, as the Bank had issued a confirmation indicating that the information regarding the remittances alleged in the notice did not pertain to the petitioner-company.

“We clarify that in the event that the AO has any credible information which suggests that the petitioner's income has escaped assessment for the relevant assessment year, the AO is not precluded from issuing a fresh notice albeit in accordance with law,” the Court added.

The company had declared an income of ₹61,10,86,200/- for AY 2017-18. The reassessment action was initiated vide notice under Section 148A(b) issued on March 26 last year, suggesting that the Petitioner's income amounting to ₹6,50,84,454/- had escaped assessment.

The company disputed the quantum of alleged remittances and produced a confirmation from the Bank.

Notwithstanding this, the AO passed the impugned order under Section 148A(d) holding that inward and outward foreign remittance transactions of the Petitioner amounting to ₹11,37,67,029/- remain unexplained.

The High Court noted that the SCN did not contain any such allegation and thus, the impugned order had travelled beyond the scope of the notice under Section 148A(b) of the Act, which is impermissible.

In view of the above, the Court set aside the impugned order.

Appearance: Mr M.P. Rastogi with Mr Ram Naresh and Mr Shivam Malik, Advocates for Petitioner; Mr Gaurav Gupta, SSC with Mr Shivendra Singh and Mr Yojit Pareek, JSCs for Respondents

Case title: M/S Independent News Service Pvt. Ltd. v. The Assessing Officer, Circle 10(1) & Anr.

Case no.: W.P.(C) 11601/2024

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