Supreme Court Stays Further Tax Recovery From NewsClick Pending ITAT Appeal

Supreme Court Stays Further Tax Recovery From NewsClick Pending ITAT Appeal

The Supreme Court has granted a stay on any further recovery of income tax under two disputed demand notices issued to NewsClick, pending the resolution of an appeal filed by the online news portal with the Income Tax Appellate Tribunal (ITAT).

The bench, comprising Justices B.V. Nagarathna and N. Kotiswar Singh, issued the stay order after acknowledging that NewsClick had already deposited 30 percent of the assessment amount with the tax department. The Court directed that the ITAT proceed with the appeal based on legal merits, modifying the previous High Court judgment accordingly.

This decision came as NewsClick challenged two income tax notices, marking the second round of litigation in the Supreme Court on this issue. Last November, the Delhi High Court rejected NewsClick's plea for relief, leading to the portal's decision to approach the Supreme Court. In February, NewsClick withdrew its petition and opted to seek relief from the ITAT, which on April 5 refused to grant a stay on the tax demands. This interim decision was later upheld by the Delhi High Court on May 10, prompting the current appeal before the Supreme Court.

Representatives for NewsClick argued that the news portal’s bank accounts and business operations had been frozen following the tax assessment order in question. They highlighted that despite depositing 30 percent of the demanded tax amount, the Delhi High Court had required an additional 20 percent deposit.

The Supreme Court questioned the justification for keeping NewsClick's account frozen while its tax dispute remains unresolved. "There must be access to justice, or not? Freezing is one (thing), recovery is another. And their appeal is not being heard. But the High Court says pay the entire amount—then what remains?" the Court remarked.

The tax department informed the Court that no further recovery steps had been taken and expressed no objection to an interim stay on the recovery process.

As a result, the Supreme Court ordered a stay on any further recovery of the disputed tax amount. In the initial round of litigation, the Delhi High Court had noted concerns about NewsClick's financial dealings, finding no prima facie case in favor of the news portal. Counsel for NewsClick informed the Supreme Court that the portal was struggling to pay employee wages amid the ongoing tax dispute.