The Delhi High Court has sharply criticised the Income Tax Department for reopening long-settled tax proceedings against NDTV founders Prannoy Roy and Radhika Roy, calling the move an exercise in harassment that undermines fairness and certainty in tax administration.
A Division Bench held that once reassessment proceedings over interest-free loans from RRPR Holding Pvt Ltd had been fully examined and closed without any additions, the tax authorities could not resurrect the very same issue years later. Doing so, the Court said, injects unpredictability into the system and strikes at the foundation of a fair adjudicatory process.
The controversy traces back to loans extended by RRPR Holding, the promoter entity of NDTV, to the Roys. For the assessment year 2009–10, the Income Tax Department had initiated reassessment proceedings in 2011, scrutinised the books of accounts, sought explanations, and ultimately completed the process in 2013 without making any additions to income.
Despite this closure, fresh reassessment notices were issued in 2016, proposing to treat notional interest on the loans as deemed income. The Roys challenged this second round as nothing more than a change of opinion on an issue already examined and settled.
Agreeing with the challenge, the High Court observed that reopening proceedings for the same transaction and substantially the same issue was arbitrary and without jurisdiction. The Bench warned that such repeated reopening not only burdens taxpayers unnecessarily but also creates uncertainty bordering on administrative chaos.
In strong terms, the Court noted that invoking extended limitation periods in these circumstances was contrary to the Income Tax Act and could not be sustained. Subjecting an assessee to multiple reassessments over identical issues, it held, violates basic constitutional guarantees, including equality before law, the freedom to conduct business, and the right to property.
The reassessment notices were consequently quashed, and the Court imposed costs of ₹2 lakh on the Income Tax Department, underscoring its disapproval of the manner in which the proceedings were pursued.
The ruling reinforces a clear message: once tax authorities have examined a transaction and closed the chapter, reopening it without fresh and tangible grounds is impermissible—and courts will step in to stop such overreach.
