Source – thehindu.com<\/p>\n\n\n\n
The Supreme Court on Monday deferred to March 17 the final hearing of appeals filed by Congress leaders Sonia Gandhi and Rahul Gandhi against a Delhi High Court decision to allow the Income-Tax department to re-open their tax assessments for 2011-12 in the Young Indian <\/em>case.<\/p>\n\n\n\n A Bench of Justices D.Y. Chandrachud and Hrishikesh Roy decided to first see the outcome of an Income Tax Appellate Tribunal (ITAT) hearing concerning the issue, scheduled on February 28.<\/p>\n\n\n\n Justice Chandrachud said the appeals would be listed for final disposal on March 17.<\/p>\n\n\n\n Solicitor General Tushar Mehta said the department was entitled to re-open the assessments. There was \u201ctangible material\u201d to justify the re-assessment move.<\/p>\n\n\n\n Justice Chandrachud said Mr. Mehta could urge the issue on the next date.<\/p>\n\n\n\n The ITAT had in November upheld the department\u2019s withdrawal of \u2018charitable\u2019 status to Young Indian<\/em>. Senior advocates P. Chidambaram, Kapil Sibal and Arvind Dattar, appearing for the Gandhis and senior Congress leader Oscar Fernandes, said the tribunal had not decided all the grounds challenged by them. Six grounds are yet to be decided and the hearing on this issue is scheduled for February.<\/p>\n\n\n\n One of the main arguments raised in the Supreme Court is that Young Indian<\/em> (YI) is a charitable institution, i.e., a not-for-profit company incorporated under Section 25 of the pre-existing Companies Act (which now corresponds with Section 43 of the new Companies Act, 2013).<\/p>\n\n\n\n Mr. Rahul Gandhi, a shareholder of the non-profit and charitable company, argued that no income had in fact escaped assessment and that all queries were adequately addressed in the scrutiny assessment. As a shareholder of a non-profit company, he was under no obligation to disclose the value of his shares in the manner that the Revenue department has alleged.<\/p>\n\n\n\n The Delhi High Court had found that about \u20b990 crore loan was due from the Associated Journal Limited (AJL), publishers of the newspaper National Herald<\/em> to the All India Congress Committee. As the loan amount became irrecoverable, it was assigned to YI, a company in which the Gandhis were the majority shareholders, for \u20b950 lakh.<\/p>\n\n\n\n The entire premise of the Income Tax reassessment notices was that the non-disclosure of the taxing event \u2014 allotment of Young Indian<\/em> shares (and the absence of any declaration as to value) \u2014 had deprived the Assessing Officer (AO) of the opportunity to look into the records.<\/p>\n\n\n\n The probe was triggered by an investigation into a private criminal complaint filed by BJP leader Subramanian Swamy before a trial court in connection with the National Herald<\/em> case.<\/p>\n