High Court
MSOs join issues with TRAI tariff plea at Madras HC
MUMBAI: In a fresh twist to a face-off between broadcasters and regulator TRAI over tariff matters vis-a-vis international and Indian copyright laws, country’s MSOs have joined issues requesting Madras High Court to hear their views too.
According to cable industry sources, All India Digital Cable Federation (AIDCF), India’s apex body for digital multi-system operators (MSOs), has impleaded itself in the case and urged the Madras High Court — hearing a case filed by Star India and Vijay TV filed against Telecom Regulatory Authority of India (TRAI) over draft tariff guidelines — that while disposing off the case it’s viewpoints should also be heard and taken into account.
The sources indicated that the MSOs had moved the court about 10 days back as they apprehended the viewpoints of distribution platforms of TV services in India, notably the MSOs, may not be heard; especially when they have views that don’t converge with those of the petitioners on all aspects of the petition.
Though Indiantelevision.com was not able to get full details of the MSOs’ stand in the court, industry observers explained that the presence of distributors of TV services in Madras HC makes the case interesting as the Indian Broadcasting Foundation (IBF) too has urged to be heard during the hearing of the case.
After Star India and Vijay TV had moved the Madras High Court appealing against TRAI’s jurisdiction to pass guidelines over tariff and commercial matters where copyrights was involved relating to content, the regulator had moved the Supreme Court seeking succour.
However the apex court, while directing TRAI that it could continue with its regulation-framing exercises and seek its nod before mandating guidelines, also observed that the regulatory body should argue its case before the Madras High Court, declining to stay proceedings in the high court.
The high court had asked TRAI to maintain status quo on tariff guidelines till full hearing of the case filed by Star India and Vijay TV. The next hearing is scheduled middle of this month.
ALSO READ:
Tariff order: Don’t notify without SC nod, TRAI told; Madras HC case to continue
TRAI tariff: Madras HC extends status quo; SC to hear regulator’s appeal on 16 Jan
Maintain status quo on broadcast guidelines, Madras HC tells TRAI
High Court
Delhi HC quashes tax notices against Prannoy Roy & Radhika Roy, fines department Rs 2 Lakh
NEW DELHI: In a sharp rap on the knuckles for tax overreach, the Delhi High Court has told the Income Tax Department that it cannot keep knocking on the same door hoping for a different answer, especially when it has already been opened, inspected and firmly shut.
Quashing reassessment notices issued to veteran broadcaster Prannoy Roy and media professional Radhika Roy, the court on January 19 ruled that the tax authorities had acted without jurisdiction, reopening a settled assessment on nothing more than a change of opinion. To underline its displeasure, the court imposed a token cost of Rs 1 lakh each, Rs 2 lakh in total, on the department, payable to the Roys.
The case, like a badly written sequel, centred on Assessment Year 2009–10, an old chapter the tax department tried to reread years later.
Radhika Roy had filed her income tax return for AY 2009–10 on July 31, 2009, declaring an income of Rs 1.66 crore. The return was processed and accepted under Section 143(1), with the intimation issued on February 22, 2011.
Then came the first knock. In July 2011, the department reopened the assessment under Sections 147 and 148, citing transactions involving shares of New Delhi Television Ltd (NDTV) between the Roys and their holding company, RRPR Holding Pvt Ltd. The reassessment culminated in an order dated March 30, 2013, assessing Radhika Roy’s income at Rs 3.17 crore. This included a major addition of Rs 1.30 crore as short-term capital gains, along with smaller additions of Rs 20.74 lakh as house property income and Rs 2,750 relating to Section 80G.
Crucially, during these proceedings, the assessing officer had specifically examined interest-free loans received by the Roys from RRPR. A show-cause notice issued on March 6, 2013 proposed treating these loans as “deemed dividends” under Section 2(22)(e). After examining RRPR’s audited books, balance sheets and shareholding pattern, the officer dropped the proposal. No addition was made on this count.
Three years later, on March 31, 2016, the department reopened the same assessment yet again, issuing fresh notices under Section 148 to both Prannoy Roy and Radhika Roy. This time, the department leaned on “complaints” and an internal review of RRPR’s records, arguing that interest-free loans given to the Roys should be taxed as “deemed income” under Section 2(24)(iv).
The figures were hefty. RRPR had borrowed Rs 375 crore from ICICI Bank in October 2008 at an interest rate of 19 per cent per annum. From this loan, it extended interest-free advances of Rs 20.92 crore to Prannoy Roy and Rs 71 crore to Radhika Roy. According to the department, RRPR suffered interest costs of nearly Rs 35 crore in that year, and an estimated Rs 6.79 crore of “benefit” had accrued to Radhika Roy alone due to non-charging of interest.
A bench of justices Dinesh Mehta and Vinod Kumar held that the so-called “new information” was neither new nor hidden. The interest-free loans were already disclosed, examined and consciously accepted during the earlier reassessment proceedings.
“Section 147/148 powers are an exception, not a licence for repeated harassment,” the court observed, noting that the same transaction cannot be reopened merely because a different officer believes another legal provision should have been applied.
Calling Sections 2(22)(e) and 2(24)(iv) “two sides of the same coin”, the court said the department had every opportunity in 2013 to tax the alleged benefit if it believed it was taxable. Revisiting the issue years later was nothing but a change of opinion, a settled no-go zone in tax law.
The court also rejected the department’s attempt to invoke the extended six-year limitation period by alleging failure to disclose material facts. The Roys, it said, had disclosed all primary facts, including RRPR’s audited accounts, which explicitly recorded the interest-free loans. Drawing on Supreme Court precedents, the bench reiterated that an assessee is not required to disclose inferences or help the tax officer draw conclusions.
Allowing both writ petitions, the High Court quashed the 2016 notices and all consequential proceedings. While noting that “no amount of cost can be treated enough” for such cases, it imposed Rs 1 lakh as cost in each petition, a symbolic but pointed message.
Beyond the Roys, the ruling sends a wider signal. Reassessment powers are not a rewind button. Once the taxman has examined the facts, applied his mind and passed an order, he cannot keep returning with fresh labels for the same transaction.
In short, the court told the department to stop re-editing old tapes, especially when the credits have already rolled.
