SC to hear plea by Sonia, Rahul Gandhi challenging Income Tax re-assessment

The Supreme Court has decided to hear the petitions filed by Congress leaders Sonia Gandhi, Rahul Gandhi, and Oscar Fernandes challenging the Delhi High Court order directing the re-opening of their tax assessment for the year 2011-12..The petitions were listed before the Bench of Justices AK Sikri and S Abdul Nazeer..The Gandhis and Fernandes were represented by Senior Counsel P Chidambaram, Kapil Sibal and Arvind Datar, while Solicitor General Tushar Mehta appeared for the Centre..The Court did not issue a formal notice in the case. The next date for final arguments has been set for December 4..In the meanwhile, there is no formal stay on the tax assessment proceedings against the petitioners..The matter pertains to reassessment of the IT returns of the Gandhis and Fernandes in relation to the National Herald transaction..The IT Department had issued a notice to Rahul Gandhi on March 31, 2018, for allegedly concealing information on his status as a Director of Young Indian Pvt Ltd. Gandhi’s shares in Young Indian allegedly resulted in an income of Rs. 154 crore, as opposed to the earlier assessed income of Rs. 68 lakh..A similar notice was issued to Sonia Gandhi and Fernandes on the same day for allegedly not disclosing income arising out of their status as shareholders in Young Indian for the AY 2011-2012..It was the IT Department’s case that the value of shares held by the Gandhis and Fernandes in Young Indian should have been calculated on the basis of its subsequent acquisition of the assets of Associated Journals Ltd. Hence, the department sought to re-open the assessment to compute the “fair market value” of the said shares..In a judgment passed on September 10 this year, the Delhi High Court Bench of Justices S Ravindra Bhat and AK Chawla allowed the Income Tax (IT) Department to re-assess the income tax of the Congress leaders..Young Indian is at the center-stage of what is called the National Herald misappropriation case. The matter is related to the assignment of a Rs. 90 crore loan advanced by the Congress party to Associated Journal Ltd – owner of National Herald – to Young Indian for a consideration of Rs. 50 lakh. The debt of Rs. 90 crore was subsequently converted into equity..Litigation with respect to a demand notice for Rs 249.15 crore to Young Indian for the assessment year 2011-12 is already pending before the High Court.