The Delhi High Court on Monday quashed reassessment notices issued against NDTV founders Prannoy Roy and Radhika Roy, while also imposing costs of Rs. 2 lakh on the tax authorities for initiating what the Court termed as unwarranted proceedings.
The reassessment notices, issued in March 2016, pertained to alleged tax implications arising from interest-free loans advanced to RRPR Holding Pvt. Ltd., the promoter entity of NDTV. The Division Bench comprising Justice Dinesh Mehta and Justice Vinod Kumar held that the notices were legally unsustainable and amounted to an impermissible second reopening of assessments for the same assessment year.
Allowing the writ petitions filed by the Roys, the Court not only struck down the impugned notices but also directed the Income Tax Department to pay Rs. 1 lakh each to Prannoy Roy and Radhika Roy as costs.
In its operative order, the Bench observed that while no amount of costs could fully compensate for the harassment caused by such proceedings, the cases could not be allowed to pass without accountability. Accordingly, a “token cost” was imposed to mark the Court’s disapproval of the department’s action.
The Court further clarified that all proceedings initiated pursuant to the impugned notices would also stand quashed. A detailed judgment explaining the reasoning is awaited.
The Roys had approached the Delhi High Court in November 2017, challenging the reassessment notices on the ground that the Income Tax Department was seeking to reopen an issue that had already been scrutinised in earlier proceedings.
Senior Advocate Sachit Jolly, on behalf of NDTV founders argued that the assessments for the relevant year had first been reopened in July 2011, during which the tax authorities had specifically examined the very issue of interest-free loans to RRPR Holding. Those proceedings culminated in a reassessment order passed in March 2013.
The petitioners contended that initiating reassessment once again on the same material amounted to a “change of opinion,” which is expressly barred under settled principles of income tax law.
They also disputed the assessing officer’s claim that the earlier reassessment was limited in scope, asserting that once reassessment jurisdiction is validly invoked, the assessing officer is empowered to examine the entire assessment and not selectively reopen issues later.
During the hearing, the Court was informed that similar reassessment proceedings against RRPR Holding Pvt. Ltd.were already pending before the Delhi High Court. In that matter, final orders have been stayed. Notably, a separate Bench of the High Court had quashed the reassessment notice issued to RRPR Holding in September 2024, lending further weight to the petitioners’ case.
Senior Advocate Sachit Jolly, along with advocates Yiyushti Rawat, Devansh Jain, and Sarthak Abrol, represented Prannoy Roy and Radhika Roy before the High Court.
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