An Income Tax (IT) assessment order produced by Subramanian Swamy in the courts today (20 January) says that Young Indian, the company floated by Gandhis to take over National Herald’s assets, is liable for payment of tax for an income of Rs 414 crore. This is a result of the IT department cancelling exemptions granted to the firm. The order says that Young Indian wasn’t carrying out activities in line with its registered status as a charitable company.
What is however more interesting is the fact that the IT department order details the chronology of National Herald controversy and most of it matches Swamy’s line of argument in the case. It goes on to say that the entire acquisition of the paper’s assets by a Gandhi family-controlled company involved “pre-ordinate artificial and fraudulent steps” by Motilal Vohra, Oscar Fernandes, Rahul Gandhi and Sonia Gandhi, all senior Congress party functionaries.
The order says that the entire scheme had two objectives: “to obtain valuable benefits embodied in business assets of the AJL and not to pay any tax on business income of earning such benefit.” AJL refers to Associated Journals Limited, the company which originally published National Herald newspapers and whose assets have now been taken over by Gandhi family-owned Young Indian.
The IT department order also calls the purchase of ‘non-existing’ debt of Rs 90.21 crore by All India Congress Committee (AICC) from AJL as a fraudulent transaction.
According to the order, Young Indian had been granted 44 opportunities over a period of 890 days to explain the discrepancies in the case. However, it says that the company representatives were non-cooperative and even challenged the authority of the department.
What all of this means is that the Gandhi family now have to fight the controversy on two fronts: one in the courts, which is already hearing a case on the issue, and another new battle with the income tax department.
According to experts, the alleged evasion of taxes might even lead to criminal charges against those involved in the ‘scheme’. At a minimum, they might lead to the Congress leaders having to spend time appealing against the IT department order and fighting out the case in IT tribunals or courts.
We recommend you read this article to get a full understanding of the entire National Herald case.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.