Delhi HC allows Income Tax re-assessment of Sonia, Rahul Gandhi & Oscar Fernandes

The Delhi High Court today allowed the Income Tax (IT) Department to re-assess the income tax of Congress Supremo Rahul Gandhi and Congress leaders Sonia Gandhi and Oscar Fernandes, for the Assessment Year 2011-2012..The Court, nonetheless, allowed the Gandhis as well as Fernandes to raise their objections with respect to the re-assessment before the appropriate Income Tax authority..The order was pronounced by a Division Bench of Justices S Ravindra Bhat and AK Chawla in petitions filed by Rahul, Sonia Gandhi and Oscar Fernandes challenging the Income Tax Department’s move to re-assess their tax liability for the Assessment Year (AY) 2011-2012..The order was reserved on August 16..The matter pertains to reassessment of the IT returns of the Gandhis and Fernandes in relation to the National Herald transaction..The IT Department issued a notice to Rahul Gandhi on March 31, 2018, for allegedly concealing information on his status as a Director of Young Indian Pvt Ltd. Gandhi’s shares in Young Indian allegedly resulted in an income of Rs. 154 crore, as opposed to the earlier assessed income of Rs. 68 lakh..A similar notice was issued to Sonia Gandhi and Fernandes on the same day for allegedly not disclosing income arising out of their status as shareholders in Young Indian for the AY 2011-2012..It was the IT Department’s case that the value of shares held by the Gandhis and Fernandes in Young Indian should have been calculated on the basis of its subsequent acquisition of the assets of Associated Journals Ltd..Hence, the Income Tax Department sought to re-open the assessment to compute the “fair market value” of the said shares..Young Indian is at the center-stage of what is called the National Herald misappropriation case. The matter is related to the assignment of a Rs. 90 crore loan advanced by the Congress party to Associated Journal Ltd – owner of National Herald – to Young Indian for a consideration of Rs. 50 lakh. The debt of Rs. 90 crore was subsequently converted into equity..Litigation with respect to a demand notice for Rs 249.15 crore to Young Indian for the assessment year 2011-12 is already pending before the High Court..Rahul Gandhi was represented by Senior Advocate Arvind Datar..Sonia Gandhi and Oscar Fernandes were represented by Senior Advocate P Chidambaram..The income tax department was represented by Additional Solicitor General Tushar Mehta..Read order: