News channel NDTV got a reprieve from the Delhi High Court in connection with a Rs 428 crore demand raised by the income tax authorities even as the Delhi-based media outlet reported worsening financial performance for the June 2017 quarter (Q1).
Hearing a plea on Tuesday filed by NDTV against the demand raised on July 21, Justices S Muralidhar and Pratibha M Singh, while agreeing that there was a prima facie case against the channel, questioned the income tax department for issuing the demand order and a show-cause notice (for not paying the amount) on the same day.
"How can you pass penalty order when no time has been given for payment of the amount which was determined on July 26," the court asked the I-T department, represented by Additional Solicitor General (ASG) Sanjay Jain, according to a PTI report. NDTV was represented by Harish Salve.
The case will now be heard on August 21.
The July 26 demand order by the department was based on the decision of July 14 decision of the Income Tax Appellate Tribunal (ITAT) that actually ended up creating an ambiguity.
While the ITAT upheld the department's decision to add Rs 642 crore as unexplained money to the channel's income for the assessment year (AY) 2009-10, prompting the July 26 order, it had remanded back three other issues pertaining to the same AY, giving the channel the opportunity to challenge the demand order.
Strangely, Jain had appeared for NDTV in 2011 in a case pertaining to defamation charges filed by the channel against MJ Akbar, senior journalist and now a minister in Narendra Modi government, for reporting on the channel's alleged financial irregularities in the ICICI Bank loan repayment case.
In 2010, Akbar had written articles on the loan repayment case in The Sunday Guardian, prompting the channel to claim Rs 25 crore in damages. NDTV had said in its petition that the journalist "created a false impression amongst the public that the plaintiff (the channel) is involved in such illegitimate acts" by using words such as "malfeasance" and "loan chicanery."
The case was disposed off by Delhi High Court in December 2011, restraining Akbar from "republishing or re-circulating" the article published in December 2010 in The Sunday Guardian.
For the June quarter, NDTV's stand-alone income dropped 36 percent sequentially to Rs 69.9 crore from Rs 109.6 crore in March 2017 quarter while the net loss stood at Rs 15.94 crore.
The NDTV stock was trading at Rs 45.15 on the BSE at around 11 am on Wednesday, close to its 52-week low of Rs 44.60.
The channel is headed by Dr Prannoy Roy and his wife Radhika Roy. As of March 31, 2017, Prannoy Roy and his wife Radhika Roy, the two key promoters, held 15.94 percent and 16.32 percent, respectively, in the company.