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3-min read

National Herald Case: Supreme Court Allows I-T Department to Re-assess Tax of Rahul and Sonia

The apex court, however, restrained the department from "giving effect" to its order in the proceedings against Rahul, who is the Congress President, and his mother Sonia till the pendency of the matter before the court.

PTI

Updated:December 4, 2018, 7:51 PM IST
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National Herald Case: Supreme Court Allows I-T Department to Re-assess Tax of Rahul and Sonia
File photo of Sonia Gandhi and Rahul Gandhi. (PTI Photo/Ravi Choudhary)
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New Delhi: The Supreme Court Tuesday allowed the Income Tax Department to re-assess the tax of top Congress leaders Rahul Gandhi and Sonia Gandhi for 2011-12 in connection with the National Herald case.

The apex court, however, restrained the department from "giving effect" to its order in the proceedings against Rahul, who is the Congress President, and his mother Sonia till the pendency of the matter before the court.

A bench of Justices A K Sikri, Ashok Bhushan and S Abdul Nazeer said that it is not going into the merit of the case but passing an interim order as the limitation period for completing the assessment is expiring.

"Since the limitation period for completing the assessment is expiring, in the meantime, it would be open to the Assessing Officer to complete the assessment and pass the assessment order as well. However, till the next date of hearing that would not be given effect," the bench said.

The limitation period was to expire on December 31 and assessment has to be completed before that.

Solicitor General Tushar Mehta, appearing for the Income Tax department, said the court should not restrain it from implementing the assessment orders against the Gandhis and others.

He said the court should hear the matter and pass appropriate orders.

To this, the bench said, "It is just an interim order which should be equitable to both the parties."

It further said: "We make it clear that since the matter is still at the preliminary stage and limitation is expiring, aforesaid course of action is adopted without going into the merits of the case."

The court noted in the order that due to certain reasons it was not possible to take up the matter for hearing and the bench was not sitting in the afternoon session.

It adjourned the matter for further hearing on January 8, 2019.

The tax matter is related to the National Herald case in which the Congress leaders are also facing criminal proceedings.

The Gandhis and senior Congress leader Oscar Fernandes have challenged the Delhi High Court's September 10 verdict which dismissed their plea against the re-assessment of their tax for 2011-12.

The apex court on November 13 had said it would hear final arguments on December 4 on the matter as it required "consideration".

It had not issued formal notice on the petitions filed by Rahul, Sonia and Fernandes as the I-T department was represented by its counsel.

In the last hearing, their lawyers had said the question was whether the reasons given in the notice by the department were right or not.

Senior advocates Kapil Sibal, P Chidambaram and Arvind Datar have been appearing for the Congress leaders.

The I-T probe against the Congress leaders has arisen from the investigation into a private criminal complaint filed by BJP leader Subramanian Swamy before a trial court here in connection with the National Herald case, in which the trio is out on bail.

Sonia and Rahul were granted bail in the case by the trial court on December 19, 2015.

A tax evasion petition (TEP) was also addressed to the finance minister by Swamy.

In the complaint before the trial court, Sonia, Rahul and others have been accused of conspiring to cheat and misappropriate funds by paying just Rs 50 lakh, through which Young Indian (YI) had obtained the right to recover Rs 90.25 crore that Associated Journals Ltd (AJL) owed to the Congress party.

It was alleged that YI, which was incorporated in November 2010 with a capital of Rs 50 lakh, had acquired almost all the shareholding of AJL, which was running the National Herald newspaper.

The I-T department had said 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.

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