Delhi High Court Quashes Tax Reassessment on NDTV Promoters Radhika and Prannoy Roy:

Delhi High Court Quashes Tax Reassessment on NDTV Promoters Radhika and Prannoy Roy The Delhi High Court on Monday set aside income tax reassessment notices issued to the NDTV founders, Ms Radhika Roy and Dr Prannoy Roy, for the assessment year 2009-10. The court ruled that initiating reassessment proceedings against the petitioner for a second time for the same transaction and almost the same issue is "arbitrary" and without jurisdiction. The court imposed a token cost of Rs 1 lakh per case on the Income Tax Department.

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The case started when the Roys received interest-free loans from RRPR Holding Pvt. Ltd., in which they were directors and 50% shareholders. They both had filed income tax returns for 2009-10, which were initially accepted. The income tax department had first reopened assessments in 2011 on the grounds that the transaction of purchase of shares of NDTV had been carried out with RRPR at a lower consideration than its market value. However, after examining all the documents, including the audited books of accounts and the audited Balance Sheet of said RRPR, the AO did not make any addition. However, after three years, in 2016, the Department again issued notices to Radhika and Prannoy under Section 148, claiming that the interest from the interest-free loan should be treated as deemed income as per Section 2(24)(iv) of the Act of 1961. The Roys challenged this before the Delhi High Court. The Court observed that the same transaction was already examined earlier, and the petitioner had fully disclosed all the material facts, so the department's claim that the petitioner failed to disclose the facts is bad in law. The High Court ruled that the tax authorities cannot reopen assessments just because of a change of opinion.

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The High Court criticised the Income Tax Department's re-initiation of the assessment proceedings, calling it arbitrary and unconstitutional. Accordingly, the high court ruled in favour of Radhika Roy and Prannoy Roy, quashing the reassessment proceedings and all related notices. The Court also directed the Income Tax Department to pay Rs 1 lakh per case to the petitioners as a token cost.