NDTV asks bourses to disregard ‘allegations, based on surmises and conjectures’ as they are an ‘abuse of your good offices and bring disrepute to the company’

New Delhi Television Ltd (NDTV), which has made several disclosures to bourses based on action pursued against it by investigation agencies, has also proffered some advice to stock exchanges in its latest disclosure dated 27 June 2016. This is based on specific queries sent to the NDTV on 23rd June in connection with an earlier disclosure made by the company. While the company has provided a point-wise response to the bourses, it is the closing paragraphs that are extremely startling.

"We would like to further submit that any allegations, based on surmises and conjectures, that a penalty has been imposed on the company by way of the SCN are meritless and should be disregarded by your good offices. The same are an abuse of your good offices to disrepute the company," Navneet Raghuvanshi, company secretary of NDTV, said in a reply to BSE

For several years now, exchanges have been routinely writing to companies to seek clarifications based on media reports as well as information received by them. These are put into the public domain without further verification or comment.

On 23 June 2016, BSE had sought a clarification from NDTV about the company's regulatory filing on receiving a SCN that was consequential to the assessment order or 1 February 2014 passed by the Income Tax Department for the AY2009-10. BSE had asked NDTV to provide, quantum of the penalty amount included in the SCN and its impact on the financials of the company.

In its clarification, NDTV says, "...the SCN is not a final order, instead it only refers to a proposed penalty and no penalty has been imposed on the company as of date. Further, the company, based on advice received from tax experts believe that the possibility of such a penalty being imposed and any economic outflow resulting from it is remote. The quantum of such proposed penalty as stated in the SCN is Rs525.39 crore."

"It is further stated that the SCN does not impose any penalty on the company. The proceedings contemplated under the SCN are premature and can only be commenced once a final determination of the assessment order is provided by the Income Tax Appellate Tribunal (ITAT) in view of the provisions of section 275(1)

(a) of the Income Tax Act. As informed to your good offices in the earlier disclosures, the company believes and as opined by its legal counsels, that the additions so made in the assessment order are not legally sustainable, are baseless and in the considered opinion of the company, the said additions and the consequent demand are likely to be dismissed by the ITAT. Consequently, no penalty would be leviable after the receipt of the order of the ITAT," NDTV said in its reply to the BSE.

NDTV had informed the BSE that it received a show cause notice from a Deputy Commissioner related with an assessment order (AO) passed by the Income Tax Department for assessment year 2009-10. Earlier in February 2014, the I-T Department had served a tax demand of Rs450 crore on the company for AY2009-10, which the company did not inform to exchanges at that time.

The assessment of AY2009-10 is sub-judice before the ITAT. NDTV had appealed before the ITAT against the assessment order dated 21 February 2014. The ITAT had stayed the demand arising out of the assessment order on payment of Rs5 crore, as per NDTV's filing with the stock exchanges. The appeal has been pending before the ITAT for more than two years.