NewsClick Withdraws Its Plea In Supreme Court To Stay Tax Demand; To Move Income Tax Appellate Tribunal

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).

It may be recalled that, through this December's order, the Assessing Officer treated receipts of INR 15.53 crores from one Justice and Education Fund (“JEF”) as “Unexplained Cash Credit” under Section 68 of the Income Tax Act, 1961. Thus, a demand for INR 14.8 crores was raised after disallowing the expenses claimed and taxing the receipts of INR 15.53 crores @ 60 percent.

Aggrieved by the orders, NewsClick approached the Delhi High Court seeking a stay of demand. However, the same was dismissed. The High Court Bench of Acting Chief Justice Manmohan and Justice Mini Pushkarna 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.

“Accordingly, the writ petition is dismissed. However, this Court clarifies that the findings given by this Court are only in the context of the present writ proceedings and shall not prejudice either of the parties at the stage of the appellate proceedings,” the court said.

Challenging this order, the instant Special Leave Petition was filed by NewsClick seeking an ad-interim ex-parte stay of the High Court's order and the tax demand. Previously, on January 02, 2024, the Division had issued notice and had sought the Income Tax Department's reply. 

During today's proceedings, Senior Advocates Kapil Sibal, appearing for the new organization, submitted that he has instructions to withdraw the appeal and avail the remedies available before ITAT. The Bench, while granting the liberty to move before the Tax Tribunal, ordered:

“It is needless to observe that if the petitioner herein seeks and early consideration for interim relief (to the Tribunal) the same shall be considered as expeditiously as possible.”

Case Title: PPK NewsClick Studio Pvt. Ltd. v. Principal Chief Commissioner of Income-Tax (Central) Delhi-1, Deputy Commissioner of Income Tax., SLP(C) No. 28533/2023

Click Here To Read/Download Order