NewsClick gets relief for 10 more days in tax case
In October 2023, NewsClick founder Prabir Purkayastha was arrested for allegedly receiving money for “pro-China propaganda” and was charged under UAPA
The Supreme Court on Friday extended the protection to NewsClick against any coercive action for 10 more days to enable it to challenge an outstanding tax demand for the assessment year of 2022-23, even as the court refused to entertain a fresh petition filed by the news portal to consider granting stay of the income tax proceedings.
A bench headed by chief justice of India (CJI) Sanjiv Khanna allowed the holding company of NewsClick — PPK Newsclick Studio Private Limited — to approach the Commissioner of Income Tax (appeals) within a week. The court had earlier granted protection to NewsClick on February 22, and extended it further by another 10 days.
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Senior advocate Kapil Sibal, appearing for NewsClick along with advocate Rohit Sharma, pointed out that the top court had protected the company in the past which allowed the de-freezing of its accounts and enabled it to pay salaries to its employees. He said the outstanding demand of tax for 2022-23 was over ₹19 crore, adding that a tax proceeding against the company is already pending for the assessment year 2021-22 for a demand of ₹14.80 crore, of which 30% amount has been recovered by the revenue authorities through coercive action.
On February 28, the Delhi high court dismissed the petition filed by NewsClick, claiming “lack of jurisdiction”, following which the company filed a petition in the top court.
“The only question you raised was stay of tax demand. For that you must file the appeal before the CIT (Appeals) and not approach the HC. You may have missed the bus now as the period of limitation for filing the appeal is over,” the bench, also comprising justice Sanjay Kumar, said.
Sibal pointed out that this period lapsed on March 2.
Noting that this could come in the way of the appeal being entertained, the bench added: “In case the appeal is preferred within five days, it may not be dismissed on the ground of limitation. We observe that for a period of 10 days, no coercive action will be taken.”
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On February 22 when the top court refused to entertain the petition filed by the news portal and granted it to pursue alternate remedies, the top court told Sibal, the company should have approached the appellate tribunal under the Income Tax Act and not the high court.
“Every time, this problem will come up. High courts will be flooded with petitions this way. Even on the last occasion (February 22), when we expressed our inability to entertain the petition, you had your remedies open. Instead, you approached the high court,” the bench said.
In its petition, NewsClick said the tax demand was excessive and exceeded the receipts for the assessment year. The company informed that it received the assessment order dated January 31, 2025, for the year 2022-23, which demanded an amount of ₹19.14 crore to be paid on or before March 2.
In August last year, the apex court stayed further recovery from the company for the assessment year 2021-22, and on November 18 ordered the de-freezing of its bank account. Pursuant to the order, the petitioner received revenues amounting to ₹40.52 lakh, which has since been used to clear outstanding dues, repay loans, cover subscriptions, and settle other liabilities. Currently, the company claimed to have a balance of ₹28 lakh in its accounts.
In October 2023, NewsClick founder Prabir Purkayastha was arrested for allegedly receiving money for “pro-China propaganda” and was charged under the stringent Unlawful Activities (Prevention) Act, or UAPA. He was released from the Tihar jail last May after the top court granted him bail.
