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Informist, Monday, Jan. 19, 2026

 

NEW DELHI – The Delhi High Court Monday quashed the income tax department's notices to reassess New Delhi Television Ltd. founders Prannoy Roy and Radhika Roy's income for assessment year 2009-10 (Apr-Mar). The initiation of the reassessment proceedings by the income tax department on the allegation that the petitioners have failed to disclose truly and fully all necessary facts itself is bad in the eye of law, said the court. It asked the income tax department to pay INR 100,000 to each of the petitioners as a fine.

 

The high court said that the specific issue in relation to the loan received by the petitioners from RRPR Holding Pvt. Ltd. had been raised earlier by the tax department, explanation was sought and thereafter no addition was made to their incomes. The income tax department cannot justifiably trigger the proceedings under Section 147 and Section 148 of the Income Tax Act, 1961 all over again, said the court. "Hurling the reassessment proceedings in such situation, hits the very root of fair adjudicatory process. Initiation of reassessment proceedings in such circumstances, leads to unnecessary harassment of an assessee on the one hand and give rise to unpredictability/uncertainty, if not anarchy on the other," said the court.

 

"The facts of the present case themselves speak volumes, as to how the proceedings are arbitrary and contrary to the statutory provisions besides being against the fundamental principles of adjudicatory process," said a bench of Justice Dinesh Mehta and Justice Vinod Kumar. Subjecting the petitioners to reassessment proceedings second time for the selfsame transaction and practically for the same issue was arbitrary and without jurisdiction, said the bench. They fall foul to petitioners' fundamental and constitutional rights guaranteed under Article 14, Article 19(1)(g) and Article 300A of the Constitution of India, the bench added.

 

The petitioners, who were the directors of RRPR Holding Pvt. Ltd., had submitted the return of income for assessment year 2009-10. In 2011, the income tax department had issued notices to the petitioners for reassessment of income alleging that some of the income had escaped assessment. In those proceedings, the department had asked the petitioners as to why the interest free loan received from RRPR Holding to the petitioners should not be treated as income. However, no adverse order was passed against the petitioners regarding this aspect.

 

In 2016, the income tax department once again gave notices to the petitioners for reassessing their income for assessment year 2009-10. According to the department, RRPR Holding had entered into a corporate rupee loan facility agreement with ICICI Bank for securing a loan amounting to INR 3.75 billion on interest of 19% per annum. From the loan amount, RRPR Holding had thereafter granted interest free loans amounting to INR 209.20 million and INR 710.00 million to Prannoy Roy and Radhika Roy respectively, said the department.

 

The department said that RRPR Holding had not charged interest from the petitioners, but the company had fully suffered the interest from ICICI Bank. The department said that though RRPR Holding had paid a sum of around INR 350 million as interest at the rate of 19% per annum, it had not charged even a single penny from the petitioners and hence, there was apparently an income and the same was liable to be included in the petitioners' income by virtue of Section 2(24)(iv) of the Income Tax Act, 1961.  End

 

Reported by Surya Tripathi

Edited by Ashish Shirke

 

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