IT Department reopening proceedings against Prannoy and Radhika Roy was harassment: Delhi High Court

The Delhi High Court on Monday took exception to the "harassment" meted out to NDTV founders Prannoy Roy and Radhika Roy by the Income Tax Department (IT Department) over an interest-free loan advanced by RRPR Holding (promoter of NDTV).

A Division Bench of Justices Dinesh Mehta and Vinod Kumar said that the IT Department reopening the tax reassessment proceedings against Roys gave rise to uncertainty and anarchy.

The Court further observed that when the reassessment proceedings were initiated the first time in 2011, the books of accounts of RRPR (promoter of NDTV) had been summoned/examined, explanation was sought from the Roys, and no addition was made to the income. 

Therefore, the tax authorities cannot trigger the proceedings all over again, and hurling the reassessment proceeding in such situation hits at the very root of fair adjudicatory process, the Court said.  

“Initiation of reassessment proceedings in such circumstances, leads to unnecessary harassment of an assessee on the one hand and give rise to unpredictability/uncertainty, if not anarchy on the other,” the Court observed. 

The Court made the observation while quashing the reassessment notices issued to Roys. The Court also imposed a fine of ₹2 lakh on the IT Department.  

The case stemmed from interest-free loans given by RRPR Holding Pvt Ltd to Roys. The Income Tax Department first reopened their assessments for the assessment year 2009–10 in 2011, examined the NDTV share transactions and loans, and completed reassessment in March 2013 without making additions. 

In 2016, fresh notices were issued proposing to tax notional interest on the loan as deemed income. Prannoy Roy and Radhika Roy challenged this second reopening as an impermissible change of opinion. They also cited related proceedings against RRPR, where reassessment notices were quashed in 2024.

In a detailed judgement, the High Court today said that the reopening of the reassessment proceedings by using the extended limitation period was arbitrary and contrary to the Income Tax Act. 

The Court added that proceedings like these cannot be countenanced by constitutional courts and violate Roys’ fundament rights. 

“In the instant case, subjecting the petitioner to reassessment proceedings second time for the selfsame transaction and practically for the same issue is arbitrary and without jurisdiction. They fall foul to petitioner’s fundamental and constitutional rights guaranteed under Article 14, Article 19(1)(g) and Article 300A of the Constitution of India,” the Court added. 

Senior Advocate Sachit Jolly with advocates Viyushti Rawat, Devansh Jain, and Sarthak Abrol appeared for Prannoy Roy and Radhika Roy.

Advocates NP Sahni, Indraj Singh Rai, Sanjeev Menon, Rahul Singh and Gourav Kumar represented the Income Tax Department.

[Read Judgment]