Natural Justice Violated by I-T Dept’s Conduct, Says Raghav Bahl
Raghav Bahl.

Natural Justice Violated by I-T Dept’s Conduct, Says Raghav Bahl



Principles of Natural Justice Violated in Registration of Prosecution Complaints Against Raghav Bahl, No Summons Served till Date

A disturbing development has come to my attention on this day, May 29, 2019. Without having received any summons or notice from the Income Tax Department, I have found, through a perusal of the official ‘ecourts’ online service, that two prosecution cases have been registered against me in the court of the Chief Judicial Magistrate in Meerut. These cases were filed and registered on May 3, 2019, nearly a month ago, and the next date of hearing is June 6, 2019, despite which I have not been notified of them in any way.

In my recent press release, I had mentioned that I had received Show-Cause Notices on May 1, 2019. These Show-Cause Notices were sent to me by email from an account on May 1, 2019 at 12:49 pm, in which it was mentioned that I was being sent notices under Sections 50 and 51 of the Black Money (Undisclosed Foreign Income and Assets) Act 2015. The notices alleged that I had understated the value of my investment in a London property by GBP 2.73 lakhs (INR 2.45 crore, approximately), and that I had failed to fully explain the source of this investment. As a result, I was asked to explain why I shouldn’t be prosecuted under Section 50 (failure to disclose information about a foreign asset in income tax returns) and Section 51 (willful attempt to evade tax). You can read the full notices here and here.

I was of course surprised to receive these notices, as I had disclosed all the information relating to this investment in my returns, as had my wife and family, and all taxes had been duly paid for it. I was even more surprised to see that the Show-Cause Notices said I would have to provide my response to them at a hearing on the very next day, May 2, 2019, at 3:30 pm – and that if I failed to attend this hearing, the Income Tax Department officials would presume that I “have nothing to say in the matter”.

At 3:25 pm on May 2, 2019, my chartered accountant wrote to the account saying that there were factual inaccuracies in the Show-Cause Notices, that all disclosures had been made in my returns for the assessment year 2018-2019. He also asked for two weeks to take further legal advice and make a detailed submission with related documents, as could reasonably be expected.

At 5:19 pm on May 2, 2019,the account replied saying: “In connection to your e-mail dt. 02.05.2019, I am directed to convey you that it is not possible to adjourn the date of hearing so long as requested by you. I am further directed to inform you that at least factual reply/ submission may be submitted by today itself”.

Since the reply clearly indicated I would be given time to file a detailed response (though this would not be a full two weeks), my chartered accountant sent a reply by email at 9:29 pm on May 2, 2019 setting out the ‘factual position’ relating to the issues raised in the Show-Cause Notices. It was clarified that I had paid an advance towards the property, after which I had assigned my interest in the property to a company called M/S RBRK Investments Ltd, in which my wife, Ritu Kapur, has invested preference capital. This company then made the payment of GBP 2.73 lakhs (INR 2.45 crore, approximately) that the authorities claim I understated my investment by. Ritu Kapur disclosed her financial interest in the company in her income tax return for the assessment year 2018-2019. The reply also asked for reasonable time to highlight all the inaccuracies in the notice, and a chance to rebut any further doubts, however no response was received from the Income Tax authorities.

Even though the authorities had not responded to us, my chartered accountant wrote to the account on May 11, 2019 asking for an opportunity to be heard, so we could submit all the collated information we had related to these issues. Again, we received no reply. An authorized representative visited the office mentioned in the first email on May 13, 2019 to submit the reply and supporting documents, but the officials there refused to provide a hearing or take the documents on record. We nonetheless dispatched these by registered post and by email to the account on May 14, 2019.

It is in light of this chain of events that I am particularly disturbed by the discovery of these prosecution complaints.

It is not just that the limited questions raised in the notices about the sum of GBP 2.73 lakhs and the source of investment had been fully answered in the email from my chartered accountant on May 2, 2019, with supporting documentation submitted within a reasonable time afterward – but on top of that, it is the fact that the prosecution complaints were filed on May 3, 2019 itself that raise serious concerns over whether this action against me is bona fide. If the complaints were filed in the court on May 3, 2019, it means they had already been prepared along with sanction for prosecution before my first response was even received. Further, it is almost certain that my reply about the factual position on May 2, 2019 – given it was sent at 9:29 pm – was not considered at all.

This appears to be a serious violation of the principles of natural justice, in particular the right to be heard. That the process being followed was not entirely fair was already evident from the minimal time given to me to respond to the Show-Cause Notices; the fact that my response (let alone the supporting documents sent later) was not even considered makes the lack of good faith even clearer.

The failure to respond to my communications despite my full cooperation, and even more egregiously, the failure to send me a summons/notification about the prosecution cases till the time of this statement – even though the next hearing is only days away on June 6, 2019 – further emphasises that the conduct of the authorities and the registration of these cases are unfair, arbitrary and mala fide, and are a serious threat to my personal liberty.

[NOTE: This is a press release by Mr Raghav Bahl, co-founder and Editor-in-Chief of The Quint. This statement has been made in his personal capacity and is not a statement by or on behalf of The Quint or Quintillion Media Private Limited. The Quint neither endorses nor is responsible for the same.]

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