A Bench of Justices BV Nagarathna and N Kotiswar Singh issued the order after noting that NewsClick had already deposited 30 percent of the assessed amount with the tax department.
NEW DELHI: Today (Aug 9): The Supreme Court is hearing an appeal by the news portal NewsClick against two income tax notices. This is the second round of litigation before the apex court on this matter.
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A Bench of Justices BV Nagarathna and N Kotiswar Singh issued the order after noting that NewsClick had already deposited 30 percent of the assessed amount with the tax department.
“Since 30 percent has been deposited with the department, the appeal before the ITAT should proceed in accordance with the law on its merits. Leave granted, and the High Court judgment is modified accordingly,”
the Court stated.
The Supreme Court today questioned the reasoning behind freezing NewsClick’s account while its tax dispute is still unresolved.
“There must be access to justice, right? Freezing is one thing, recovery is another. And their appeal isn’t being heard. But the High Court says pay the entire amount—so what remains?”
the Court remarked.
In November 2022, the Delhi High Court had rejected NewsClick’s plea for relief, following which the portal moved the Supreme Court. In February 2023, NewsClick withdrew that petition and opted to approach the Income Tax Appellate Tribunal (ITAT) instead.
The ITAT refused to stay the tax demands on April 5, 2023, and this interim decision was upheld by the Delhi High Court on May 10, 2023. This led NewsClick to file the instant appeal before the Supreme Court.
NewsClick’s lawyer, Senior Advocate Devadatta Kamat, argued that the news portal’s bank accounts and business operations had been frozen after the tax assessment order. He informed the court that despite depositing 30% of the demanded tax amount, the Delhi High Court ordered an additional 20% deposit.
The Supreme Court questioned the rationale behind keeping NewsClick’s account frozen while its tax dispute remains pending, stating that there must be access to justice.
The Additional Solicitor General representing the tax department informed the court that the department had not taken steps for any further recovery and expressed no objection to an interim stay on the recovery process.
Accordingly, the Supreme Court stayed any further recovery of the disputed tax amount from NewsClick.
In the initial phase of litigation, the Delhi High Court noted that NewsClick had significant questions to answer regarding its financial activities, finding no prima facie case in favor of the news portal.
Challenging the High Court’s decision, NewsClick’s counsel informed the Supreme Court that the portal was struggling to pay its employees’ salaries.
Senior Advocates Kapil Sibal and Devadatt Kamat, along with advocates Rohit Sharma, Nikhil Purohit, Jatin Lalwani, Rajesh Inamdar, and Anubhav Kumar, represented NewsClick.
Additional Solicitor General N Venkataraman represented the Income Tax Department.
