Supreme Court Issues Notice To IT Department On NewsClick's Plea To Stay Tax Demand

The division bench of BV Nagarathna and Dipankar Datta was seized on the matter.

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 (AO) 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.

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.

Today, senior advocate Kapil Sibal submitted on behalf of the organisation that 40% of the claimed amount had already been paid. He 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.

In view of this, the Court issued notice in the main SLP as well as in the interim relief.

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 Against this order also, a SLP was filed, however, the same was withdrawn with the liberty to move the the Income Tax Appellate Tribunal.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