National Herald case: Setback for Sonia and Rahul Gandhi, Delhi HC dismisses their tax pleas

The income tax probe against the Congress leaders stems from an investigation into a complaint filed by BJP leader Subramanian Swamy before a trial court in connection with the National Herald case.

Written by Pritam Pal Singh | New Delhi | Updated: September 11, 2018 11:26:37 am
congress anti-bjp front for 2019 lok sabha elections Congress president Rahul Gandhi with party Senior Leaders, Sonia Gandhi during the CWC Meeting at New Delhi. (Express photo by Renuka Puri)

THE DELHI High Court Monday dismissed pleas by Congress leaders Sonia Gandhi and Rahul Gandhi against the Income Tax department’s decision to re-open their tax assessments for the financial year 2011-2012 in connection with the National Herald newspaper case.

The “writ petitions have to fail,” a bench of Justices S Ravindra Bhat and A K Chawla said while clarifying that the observations in the order with regard to the contentions of the Congress leaders is not conclusive and have been noted only for the purpose of disposing of their pleas. The bench also dismissed a similar plea by Congress leader Oscar Fernandes.

Reacting to the ruling, BJP spokesperson Sambit Patra described it as a “victory of the common man”. He alleged that ‘Bharat Bandh’ call given by the Congress was to divert the people’s attention from the hearing involving its “corrupt” leaders.

The Congress hit back and dared Prime Minister Narendra Modi to fight a “political battle” with Rahul Gandhi instead of seeking “petty revenge”.

The income tax probe against the Congress leaders stems from an investigation into a complaint filed by BJP leader Subramanian Swamy before a trial court in connection with the National Herald case.

The complaint accused Sonia, Rahul and others of conspiring to cheat and misappropriate funds. It alleged that Young Indian (YI), which was incorporated as organisation in November 2010 with a capital of Rs 50 lakh, had acquired almost all shareholdings of Associate Journals Lts (AJL), which ran the National Herald newspaper. In this process, it was alleged, YI also acquired AJL’s debt of Rs 90 crore. YI is a not-for-profit organisation.

The tax department had said that the shares Rahul has in YI would lead him to have an income of Rs 154 crore and not about Rs 68 lakh, as was assessed earlier. It has already issued a demand notice for Rs 249.15 crore to YI for the assessment year 2011-12.

The bench, in its Monday order, noted that the premise of the reassessment notices was that the non-disclosure of the taxing event — allotment of shares of YI — deprived the assessing officer of the opportunity to look into the records.

It said in Rahul’s case, the non-disclosure of share acquisition constituted tangible material justifying reassessment. In case of Sonia and Fernandes, the bench said returns filed were processed under Section 143(1) of the Income Tax Act, which pertains to ‘notice or intimation’, and are not treated as “assessments”.

The high court had on August 16 reserved its order on the pleas of the three leaders after the Income Tax Department had contended that Rahul Gandhi’s tax assessment for 2011-12 was reopened as material facts were concealed.

The bench had orally asked the tax department not to take any coercive step against Sonia, Rahul and Fernandes till pronouncement of its verdict.

Senior advocate P Chidambaram, appearing for Sonia Gandhi, had said he had faith in the oral statement made by the Additional Solicitor General Tushar Mehta. Mehta had argued that the Congress leaders had alleged mala fide on the part of the tax department but had not made any averments in this regard. —(With PTI)

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