Delhi HC quashes 2016 tax notices against NDTV founders Prannoy, Radhika Roy

New Delhi: The Delhi High Court on Monday set aside the income tax reassessment notices issued to NDTV founders Prannoy Roy and Radhika Roy in March 2016, holding that the notices were legally unsustainable and amounted to an impermissible second reopening of completed assessments.

A Division Bench of Justices Dinesh Mehta and Vinod Kumar also imposed costs of Rs 2 lakh on the Income Tax Department, directing that Rs 1 lakh each be paid to the two petitioners.

The reassessment proceedings stemmed from transactions involving interest-free loans advanced by the Roys to RRPR Holding Pvt Ltd, a promoter entity associated with NDTV. The tax department had issued reassessment notices dated March 31, 2016, seeking to reopen the Roys’ assessments in relation to these transactions.

The Roys challenged the 2016 notices, arguing that the department was seeking to revisit issues that had already been examined earlier, and that the reopening was not backed by any fresh tangible material.

The High Court accepted the petitioners’ contention that the 2016 exercise was effectively a second reopening of a concluded assessment on the same set of facts and material, which is not permitted in law.

Bar and Bench, reporting on the order, said the court found the reassessment legally unsustainable and proceeded to quash the notices and all consequential proceedings.

The court’s order, as reported, records that the notices dated March 31, 2016, and the consequent proceedings arising from them, would stand quashed.

In a notable direction, the bench imposed costs of Rs 2 lakh on the Income Tax Department for issuing the notices, ordering Rs 1 lakh to be paid to each petitioner.

RRPR Holding, which had been the promoter vehicle through which the Roys held their controlling stake in NDTV, later became central to NDTV’s ownership change in 2022. The Adani Group’s AMG Media Networks had announced in August 2022 that it would indirectly acquire a 29.18 per cent stake in NDTV through RRPR, along with an open offer.

By December 2022, AMG Media Networks said it had raised its controlling stake in NDTV to 64.71 per cent after acquiring additional shares from the Roys.

The High Court’s detailed reasoning is awaited, but the order, as reported, brings to a close the reassessment proceedings initiated through the March 2016 notices against the two petitioners.