Supreme Court grants interim relief to NewsClick in tax case

The Supreme Court on Friday stayed any further recovery of income tax under two disputed demand notices from NewsClick, until the disposal of an appeal filed by the online news portal before Income Tax Appellate Tribunal (ITAT) [PPK Newsclick Studios Pvt Ltd v Deputy Commissioner of Income Tax]..A Bench of Justices BV Nagarathna and N Kotiswar Singh passed the order after noting that NewsClick had already deposited 30 per cent of the assessment amount with the tax department."Needless to say, that the aforesaid being done since 30 per cent is deposited with the department. Appeal by ITAT to proceed in accordance with law on merits. Leave granted and High Court judgment modified in above terms," the Court stated..The Bench was hearing Newsclick's plea against two income tax notices, in what is its second round of litigation before the apex court in the matter.In November last year, the Delhi High Court had rejected NewsClick's plea for relief, after which it moved the top court. In February this year, NewsClick withdrew that petition and opted to move the Income Tax Appellate Tribunal (ITAT) for relief instead. The tribunal on April 5 refused to stay the tax demands. The ITAT's interim decision was then upheld by the Delhi High Court on May 10. This led to the instant appeal before the Supreme Court. .Senior Advocate Devadatta Kamat appeared for NewsClick today and argued that the news portal’s bank accounts and business operations had been frozen after the tax assessment order under challenge. He informed the Court that despite having deposited 30 per cent of the demanded tax amount, the Delhi High Court ordered the deposit of an additional 20 per cent.The Supreme Court today questioned the rationale behind keeping NewsClick's account frozen while its tax dispute remains pending."There must be access to justice, or not? Freezing is one (thing), recovery is another. And their appeal is not being heard. But the High Court says pay the entire amount—then what remains?" the Court remarked.Additional Solicitor General (ASG) Aishwarya Bhati, representing the tax department, informed the Court that the department had not taken steps for any further recovery and expressed no objection to an interim stay on the recovery process.Accordingly, the Court passed the order staying any further recovery of the disputed tax amount..In the first round of litigation, the Delhi High Court had observed that NewsClick has a lot to answer when it comes to its financial dealings, with there being no prima facie case in favour of the news portal.In its appeal against the High Court order, the counsel for NewsClick had told the top court that it was facing difficulties in paying the wages of employees.Senior Advocates Kapil Sibal and Devadatt Kamat along with advocates Rohit Sharma, Nikhil Purohit, Jatin Lalwani, Rajesh Inamdar and Anubhav Kumar appeared for NewsClick.Additional Solicitor General N Venkataraman appeared for the Income Tax Department.