The Congress on Friday suffered a jolt in the National Herald case as the Delhi high court refused to stay the income tax proceedings against Young Indian Pvt Ltd, whose major stakeholders are party president Sonia Gandhi and her son and vice president Rahul.
“We are not inclined to entertain your writ petition. It is better that you withdraw it and approach the income tax assessing officer,” a bench of Justices S Muralidhar and Chander Shekhar said.
The order makes it clear that the income tax proceedings will continue in the case.
The court also said that the company has not moved the assessing officer and raised its grievances, so it should first approach the IT department and submit its documents.
In case it is still not satisfied, the company can move the court thereafter, the bench added.
Sensing the mood of the bench, senior advocate Abhishek Manu Singhvi, appearing for the firm, withdrew the petition which was allowed by the court that termed it ‘dismissed as withdrawn’.
Young Indian, which was incorporated in November 2010 with a capital of Rs 50 lakh, had acquired almost all the shareholding of the Associated Journal Ltd, which is the owner of the National Herald newspaper.
Bharatiya Janata Party MP Subramanian Swamy, in a private criminal complaint filed before a trial court, had accused the Gandhis and others of conspiring to cheat and misappropriate funds by paying just Rs 50 lakh, through which YI had obtained the right to recover Rs 90.25 crore which the AJL owed to the Congress party.
YI had approached the high court seeking a direction to stay the IT proceedings and quashing of re-assessment notice issued against it with regard to the National Herald misappropriation of assets case.
The firm had challenged a notice issued under sections 147/148 of the Income Tax Act by which the department had sought to reopen a past assessment on the ground that certain income had escaped assessment for the year 2011-12.
The counsel for the Income Tax Department had opposed the petition, saying the firm has not moved the assessing officer and hence its plea was not maintainable.
The trial court had summoned the Gandhis and others as accused persons, besides Young Indian on June 26, 2014.
The Gandhis and other accused -- Motilal Vora, Oscar Fernandes, Suman Dubey and Sam Pitroda -- had denied the allegations levelled against them.
On December 7, 2015 the high court had rejected their pleas for quashing the summons issued against them by the trial court in the case.
On December 19, 2015, the trial court had granted bail to Sonia, Rahul, Vora, Fernandes and Dubey, who had appeared before it pursuant to summons. Pitroda was granted bail on February 20, 2016 when he had appeared in the court.
Sonia, Rahul, Vora (All India Congress Committee treasurer), Fernandes (AICC general secretary), Dubey and Pitroda were summoned for the alleged offences of dishonest misappropriation of property, criminal breach of trust and cheating read with criminal conspiracy of the Indian Penal Code.
The IT department’s move to issue the notices followed its probe on Swamy’s complaint alleging that the Gandhis had misappropriated AJL’s assets while transferring their shares to the newly formed Young India.
According to IT records, 83.3 per cent of Young Indian was held by Sonia and Rahul, 15.5 per cent by Vohra and the remaining 1.2 per cent by Fernandes.
Govt spreading misinformation in National Herald case: Congress
Accusing the government of spreading misinformation in the National Herald case, the Congress said it was proud to be associated with the newspaper that stood up in pre-independence times against the British for throttling free speech, similar to the present day climate.
Congress spokesperson Abhishek Singhvi alleged that government agencies by proxy were engaging in distorted, slanted misinformation possibly bordering on contempt.
“This shows the unambiguous, clear insecurity and vindictive approach,” he said.
He said it is quite astonishing to see the amount of misinformation and distortion going on in the case.
Singhvi said he wondered if the government has better things to do or focus on governance in the country than to circulate unsigned notes of briefing to the media ‘which are actually campaigns of misinformation and distortion’.
“Yes, we understand that the ruling party wants to indulge in this campaign of misinformation only because either they want to supply information to their proxies who are fighting us in court or they do not want to go by the facts because they are scared of the fact,” he said.
Singhvi said he had withdrawn the case as the high court in its written orders said that all points raised by Young Indian can be raised before the IT department including the point that it had no reason to believe to reopen the case.
“In view of the matter, because of that, I withdrew the writ,” he said.
AICC in-charge of communications department, Randeep Surjewala, said Young Indian had raised certain fundamental jurisdictional issues challenging the authority of Income Tax authorities and the Delhi High Court directed IT authorities to decide all issues with IT department and satisfied with it, Young Indian withdrew the petition.
He said Young Indian is a ‘not for profit’ company that runs the National Herald newspaper which is the last vestige of freedom movement which contributed to India’s freedom struggle.
“No one can withdraw a single rupee of profit, salary or dividend from it or benefit from it any manner as per the Companies Act. We are proud of protecting this important symbol of the freedom struggle and will always protect this trust of people of India.
“Witch hunt or malice of the current BJP government will not deter us from upholding our bounden duty to the nation," he said.
Attacking the government for its ‘false propaganda’, Singhvi said, ‘terrified government proxies who have nothing else to do are using all adjectives’ and claimed that they were circulating an unsigned note stating that this is a direction issued by the court and the department has been directed to investigate.
“We will apologise to you if the order shows this. Is it not contempt of court? Some of you are told to publish that the order says Sonia Gandhi and Rahul Gandhi have been asked to appear.
“This is all government agencies are doing, feeding the press misinformation when our grievance is known to all...Is this fair reporting, is this fair for the government agencies,” he asked.
He said the Congress is ‘proud to be associated with the newspaper which in the pre-independence era stood up for free speech when the Britishers were tightening and throttling free speech very similar to the present-day climate’.
Singhvi said the National Herald stood up for certain ideals and the Congress fully supports with pride this initiative.
On the IT case involving the newspaper, he said, nobody has benefited financially from it as it is registered as a Section 25 ‘Not for Profit’ company.
The Act prohibits paying out dividend and giving of pecuniary perks as it is a Section 25 Company and no financial gain is possible, he said.
“Is it a real estate company, is a somebody's fertile imagination to think so? These are properties owned by this company for decades. And who can benefit, it will remain property of 'Not for Profit Section 25 Company’,” the Congress leader said.
Explaining the case, he said the Income Tax authorities had sent out a notice in 2014 while reopening a six-year- old notice to the company owning the newspaper and claimed that it had no jurisdiction to reopen that after a six-year period.