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The Delhi High Court yesterday directed the tax authorities to not take any coercive action against NDTV after the channel appealed against an order by the Deputy Commissioner of Income Tax asking it to deposit around Rs. 429 crore.
Appearing for NDTV, Senior Advocate Harish Salve submitted that the impugned order of the Assessing Officer is purportedly an “appeal effect order” passed consequent to the July 14 order of the Income Tax Appellate Tribunal (ITAT). He stated that out of the four major issues that arose for consideration before the ITAT, three were remanded back to the Assessing Officer for re-determination. He argued,
“There cannot be a truncated ‘appeal effect order’ only with reference to one issue on which the ITAT has decided against the Assessee (NDTV).”
Representing the Revenue Department of the central government, ASG Sanjay Jain raised an objection to the maintainability of the petition. According to him, the impugned order could only be appealed before the Commissioner of the Income Tax.
Explaining the reason for approaching the High Court directly, Salve pointed out that if the order would have been appealed before the CIT, NDTV would in all probability be required to deposit the entire amount, causing undue hardship and severe prejudice to the channel.
The Bench of Justices S Muralidhar and Prathiba M Singh drew up a number of questions that require determination, including the nature of an appeal effect order under the Income Tax Act, and whether the AO can make such an order in respect of one issue, when the other issues have been sent back to him for reconsideration.
The Court, while directing that no coercive steps be taken against NDTV, recorded that it was satisfied that there is a prima facie case in favour of the channel for granting interim relief.
“Given the amount demanded from the petitioner by the impugned ‘appeal effect order’, and the requirement that it should be paid ‘immediately now’, the Petitioner would be subjected to hardship and prejudice if such an interim order is not passed.”
Read the order: