New Delhi, Jan 19 (PTI) Terming the reassessment proceedings "arbitrary" and against fundamental and constitutional rights, the Delhi High Court on Monday quashed the 2016 income tax notices to NDTV founders Prannoy Roy and Radhika Roy and asked the department to pay Rs 1 lakh to each of them as token cost.

A bench of Justices Dinesh Mehta and Vinod Kumar observed that authorities subjecting Prannoy Roy and Radhika Roy to reassessment proceedings for the second time for the same transaction and "practically for the same issue" was without jurisdiction.

The court further said that initiation of the proceedings leads to unnecessary harassment on one hand and gives rise to unpredictability and uncertainty, if not anarchy, on the other.

"The facts of the present case speak volumes as to how the proceedings are arbitrary and contrary to the statutory provisions, besides being against the fundamental principles of adjudicatory process," the bench said, allowing the petitions of the Roys.

"Impugned notice(s) dated 31.03.2016 issued to the petitioner(s), so also any consequential order(s) or proceedings pursuant thereto are quashed. No amount of cost can be treated enough for these cases, however, we cannot leave these cases without imposing any. Hence, we impose a token cost of Rs 1,00,000/- per case upon the respondents to be paid to each of the petitioners," ordered the court.

The income tax notice pertained to the reassessment of the petitioners' income for the year 2009-10 on account of certain "interest-free" loans received by them from RRPR Holding Private Limited, the promoter entity of NDTV.

The petitioners were then shareholders and directors of RRPR.

The first round of reassessment proceedings were initiated in 2011 and ended in 2013.

On March 31, 2016, notices were issued for reassessment again on the basis of a complaint.

The proceedings before the assessing officer were stayed by the high court in 2017.

In the judgment, the court observed that no new fact was revealed by the "so called complaint" and the assessing officer was aware of the facts when the order was passed in 2013.

It said the current case has not made any addition to the factual backdrop of the issue.

"Specific issue in relation to the loan received by the petitioner from RRPR had been raised, books of accounts of RRPR had been summoned/examined, and explanation was sought from the petitioner. No addition was made," the court stated.

"The respondents cannot justifiably trigger the proceedings under Section 147/148 of the (Income Tax) Act of 1961 all over again. Hurling the reassessment proceedings in such a 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 gives rise to unpredictability/uncertainty, if not anarchy, on the other," it added.

The court held that the reassessment proceedings fell foul of fundamental and constitutional rights guaranteed under Article 14 (right to equality), Article 19(1)(g) [Freedom to Practice Profession, Occupation, Trade or Business] and Article 300A (Persons not to be deprived of property save by authority of law) of the Constitution of India. PTI ADS RUK RUK

Income tax reassessment notices to NDTV founders found arbitrary, lacking new facts, and violating equality, business and property rights. The reassessment notices dated 31.03.2016, seeking to reopen the 2009-10 assessment on the same transaction previously examined in 2011-2013, were held arbitrary and without jurisdiction because the complaint produced no new facts; reopening without new material was contrary to statutory and fundamental principles and impaired procedural fairness and protected rights.