SC grants NewsClick one-week relief from coercive action on tax demand as the top court provides respite in the ongoing case.
New Delhi: The Supreme Court grants NewsClick tax relief on Friday, providing interim relief for one week from coercive action over a ₹19.14 crore tax demand and allowing the news portal to challenge the revenue department’s assessment before the Delhi High Court.
A bench led by Chief Justice of India Sanjiv Khanna, along with Justices Sanjay Kumar and KV Viswanathan, dismissed a writ petition filed directly under Article 32 by PPK Newsclick Studio Pvt Ltd. However, the court permitted the petitioner to move the Delhi High Court, stating, For a week, no coercive action shall be taken.
Senior advocates Kapil Sibal and Devadatt Kamat, along with advocate Rohit Sharma, represented NewsClick. Sibal argued that the tax demand exceeded the company’s receipts for the financial year 2022-23. The challenge was against an assessment order issued on 31 January 2025, directing the portal to pay ₹19.14 crore by 2 March.
The Income Tax Department has been issuing similar tax demands to NewsClick since the 2018-19 assessment year. In August 2024, the Supreme Court stayed further recovery efforts for the 2021-22 assessment year, and in November 2024, it directed the unfreezing of the company’s bank account. Following this, the petitioner firm received ₹40.52 lakh in revenue, which was used to clear provident fund dues, repay loans, and cover other liabilities. Currently, NewsClick has a balance of ₹28 lakh, which it claims is essential for salaries and operational expenses.
NewsClick Warns of Shutdown Amid Tax Dispute
NewsClick has informed the Supreme Court that the organisation may face closure if the Income Tax Department proceeds with attaching its bank accounts. The company, which had 79 employees and 25 full-time consultants in December 2023, has been reduced to just seven consultants.
The tax department has invoked Section 68 of the Income Tax Act against the company for multiple assessment years, including AY 2022-23. This provision allows the tax authorities to treat unexplained credits in an assessee’s books as taxable income if the explanation is deemed unsatisfactory. The resulting tax demand, levied at a penal rate of 60% plus surcharges, treats even legitimate expenses as unaccounted income.
NewsClick contends that the tax assessment is disproportionate, as it either exceeds or matches the organisation’s total revenue without accounting for expenses. Senior advocate Kapil Sibal argued before the court that all transactions have been conducted through banking channels, with no cash dealings involved.
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