The Supreme Court brought back to life a 10-year old tax case against Subrata Roy, directing the Sahara Group chief to pay Rs 193 crore to the income tax (IT) department.
In the apex court, the IT department challenged a 2014 Allahabad High Court order which set aside the tax demand raised against Subrata Roy for the first time in 2006. The Allahabad High Court had upheld the tax demand against Roy in 2013 but recalled that order the following year.
The IT department alleged that the Allahabad High Court wrongly recalled the order and got swayed by the arguments made by Subrata Roy's lawyer. The department argued that there was no reason for the high court to recall its order as Subrata Roy's lawyer had already been extensively heard before the final order.
“The order (by Allahabad High Court) has been recalled without any opportunity given to the department to respond to the case,” said the IT department in its petition filed in the Supreme Court.
The IT department had issued the tax demand in 2006 and alleged that Subrata Roy used “colourable devices” by circulating money within loss-making Sahara Group companies to reduce personal tax liability.
The tax demand relates to assessment year 1998-99 involving a tax effect of Rs 193 crore. In 1998, The Sahara Group filed returns which showed a loss of Rs 44 crore but later filed a revised return, showing a profit of Rs 14 lakh. The revised return was rejected by the assessing officer in 2001 who claimed their calculations showed a profit of Rs 155 crore.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
