NEW DELHI: Dismissing PPK Newsclick Studio Pvt Ltd’s Article 32 petition in relation to tax recovery demand, the Supreme Court on Friday granted a week's interim protection to the company that runs the news portal NewsClick, and granted it the liberty to approach the Delhi High Court.
According to reports, the bench of Chief Justice of India (CJI) Sanjiv Khanna and Justices Sanjay Kumar and KV Viswanathan was hearing a writ petition filed under Article 32 by the company against the tax recovery demands over ‘unexplained cash credits’.
Appearing on behalf of the news portal, Senior Advocate Kapil Sibal argued that the petitioners only had Rs 28 lakhs in the bank account and the demand notice is of Rs. 3.6 crores.
Justice Khanna, while directing the petitioners to move the Delhi High Court, is reported to have asked saying: “Why don’t you take recourse to the procedure which says that if a similar issue is already pending before the ITAT, the assessee can move an application asking the assessing officer to stay and wait for the order of the ITAT. Why don’t you take recourse to that procedure?”
Sibal, on behalf of the petitioner, asked, saying: “Who will protect me? 2nd March is my deadline, my business employees won’t be paid.”
On this the CJI verbally said, “We will protect you for a week only.”
Thus the SC bench, while dismissing the petition, passed a direction granting interim protection to the agency for a week saying: “We are not inclined to entertain the present petition under Article 32 of the Constitution and we leave to the petitioner to approach the Jurisdiction of the High Court under Article 226 of the Constitution of India. However, we make no comments on the merits of the assertions made by the Petitioner....let there be no coercive action against the Petitioners for one week.”
However, before parting, Sibal argued that S.68 of the Income Tax Act 1961 would not be applicable in the present case as it deals with cash credits and not banking transactions. He stated that the petitioner company only dealt in cheque transactions and not cash exchanges per se. It is to be noted here that S.68 deals with procedures to be followed when there is unexplained cash credit in the accounts of the Assessee.