Supreme Court Disposes Newsclick's Plea, Stays Tax Recovery Until Disposal Of ITAT Appeal

The division bench of Justices BV Nagarathna and Nongmeikapam Kotiswar Singh was hearing an SLP filed by the Newsclick against the Delhi High Court's order rejecting a stay on the income tax demand. On July 8, the Court issued notice in this instant plea.

To provide a brief background, the news portal had claimed that the respondent-tax authorities, vide orders passed in February and November 2023, arbitrarily rejected its application for a stay of demand during the pendency of its appeal before the Commissioner of Income-Tax (Appeals) against Assessment Order dated December 30, 2022. These orders further directed it to pay 20% of the demand before applying afresh for a stay of demand during the pendency of its appeal before the Commissioner of Income Tax (Appeals).

Following this, the petitioner moved before the Income Tax Appellate Tribunal. The Tribunal had upheld the findings of the AO and refused to stay the income tax demand. Against this, a Writ petition was filed before the Delhi High Court. However, the same was dismissed as the Court did not find any reason to interfere with the Appellate Tribunal's order. Challenging this order, the instant Special Leave Petition was filed by NewsClick.

Previously, senior advocate Kapil Sibal questioned the reasoning given by the High Court in the impugned order and averred that the organisation is left with no money. For one year, I have not paid salaries, I have not been able to pay the provident funds., Sibal said.

Today, senior advocate Devadatt Kamat, along with Advocate Rohit Sharma, submitted that the entire money in the bank has been taken out and a recovery of around 30% has been made.

In view of this, the Division Bench disposed off the plea while modifying the High Court's order in the aforesaid terms. The ITAT shall consider the appeal in accordance with law on its merits without being influenced by the observations of the HC which has been modified by us., the Court said.

It may also be mentioned that earlier, the Delhi High Court had observed that Newsclick's plea of financial stringency based on its balance sheet inspired no confidence. The Court noted that, as per the assessing officer, the news portal's accounts were not properly maintained. Against this order also, an SLP was filed, however, the same was withdrawn with the liberty to move the the Income Tax Appellate Tribunal.

Case Details: PPK NEWSCLICK STUDIO PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX., DIARY NO. - 24553/2024