I-T dept ‘surveys’ offices of NewsClick, Newslaundry
“NewsClick and Newslaundry received Foreign Direct Investment (FDI) at very high premium while their net worth was very low,” an I-T official said.
The Income Tax department on Friday carried out a “survey operation” at the office of website Newslaundry as part of an investigation into the finances and funding of the organisation, according to four people familiar with the matter who asked not to be named.
The department also carried out a separate survey operation at the office of NewsClick.
One person familiar with the development said the I-T action came after certain gaps were noticed in the financial statements, as well as irregularities in the foreign investments, received by both the portals. A second person said the department was looking into the sources of funds of current as well as previous promoters of the websites and that it had “sufficient reason” to carry out a survey
“NewsClick and Newslaundry received Foreign Direct Investment (FDI) at very high premium while their net worth was very low. There are also gaps in the financials of both the companies, which suggest tax evasion but we are verifying the same,” the first person added.
While the foreign investment in NewsClick was received in 2018-19, this officer didn’t disclose the period when Newslaundry received such funds from outside India.
According to the Newslaundry website, much of the company’s equity is held by its three co-founders, Sekhri, Roopak Kapoor, and Prashant Sareen, and by an impact fund Omidyar Network (the current managing director and partner of its Indian operations is Roopa Kudva). Madhu Trehan, another co-founder, divested her stake in favour of the other three co-founders. She did not respond to a text message seeking comment.
HT reached out to Newslaundry CEO Abhinandan Sekhri and NewsClick founder Purkaystha on Friday for their reaction but there was no response.
In a message posted on his Twitter handle on Saturday, Sekhri referred to the income tax 'surveys.
"We have nothing to hide and have done everything by the book and are not in any breach or violation of any law. We conduct our business honestly and with integrity," Abhinandan Sekhri said on Twitter.
"We have in the past given the IT authorities all documents related to our funding and accounts. We will cooperate in whatever way we are required to by the law. We will also continue to practice public interest journalism which is why we exist”.
NewsClick also released a statement on the I-T action on Saturday, asserting that the latest action "appears to relate to the same false and unfounded allegations being investigated by the Enforcement Directorate and the Economic Offences Wing, Delhi Police. We have these allegations challenged in the courts".
"These investigations by various agencies, and these selective allegations, are attempts to stifle the independent journalism of media organisations – including Newsclick," the news portal's Prabir Purkayastha said in the statement.
The I-T department and the finance ministry did not respond to e-mail queries and text messages
In a survey operation, which is carried out under provisions of Section 133 A of the Income Tax Act, 1961, tax officials cover only the business premises of an assessee and those linked to it and not their residential addresses. However, tax authorities can seize documents. During a survey, I-T officials look into documents such as books of accounts, bank statements, and details of cash and stock.
The I-T teams reached the Newslaundry and NewsClick offices at Sarvodaya Enclave and Saidulajab respectively in the morning, and checked the documents till evening while asking those in the office to switch off their phones.
Officials said they have seized documents and electronic communications from both the companies.
As the next step, the survey team will study the finances of the companies and prepare a report for further action, if any, by the concerned assessing officer, so that a formal investigation can be launched under the I-T Act , a third person, a government officer explained.
I-T officials had visited the offices of both the portals on June 30 as well and notices were served to the concerned office bearers.
NewsClick was earlier raided by the Enforcement Directorate (ED) on February 9 this year for alleged money laundering linked to foreign funding received by it. The Delhi high court in June this year directed the ED to not take any coercive action against Purkayastha.