'Central assessment may be needed’, SC on Gandhis’ plea against I-T assessment transfer

The Supreme Court Tuesday said that central assessments may be required if there were cross-transactions between individuals.

The court was hearing pleas filed by Congress leaders Rahul Gandhi, Sonia Gandhi, and Priyanka Gandhi Vadra against the transfer of their tax assessments to the central circle.

Senior advocate Arvind Datar, appearing for the Gandhis' and trusts associated with them, submitted before a bench of Justices Sanjiv Khanna and S V N Bhatti that because of a search in fugitive arms dealer Sanjay Bhandari's case, the I-T authorities have tagged all these as supplementary cases.

He said after the faceless scheme came in 2019 and his clients were shifted to faceless assessment and notice was issued for documents and the matter was going on, but all of a sudden there is a person called Sanjay Bhandari against him various proceedings are pending. Datar submitted what they say is in the case of Bhandari there is a search and “all supplementary cases against Bhandari".  

"We are charitable trusts, we have already got the faceless assessment and our assessments are being completed," Datar said.

The bench said there are two things as far as trust is concerned there may be a separate issue but as far as three individuals are concerned because they are related to that party, “normally a centralised assessment has to be done” and if there are cross-transactions, centralised assessment may be required.

Datar said suppose there are connected parties and when a raid is conducted the agency comes across several incriminating documents so on all incriminating persons they issue notice, as they are associated persons. 

The bench said if notices were issued it would have been “certainly centralised assessment automatically that does not mean regular assessment cannot be made subject matter".

The bench asked the Centre’s counsel, “why the trust, because trust may not be having any….because the trustee is involved in something…”.

The Gandhis’ have contended that they had nothing to do with Bhandari group's cases and there has been no instance of search or seizure in their cases. 

Bhandari is wanted in India on charges of corruption and money laundering and he has been allegedly linked to Robert Vadra over a London-based flat. Vadra has denied any business dealings with Bhandari.

The apex court was hearing a batch of pleas by the Congress leaders, as well as the Aam Aadmi Party (AAP) and five charitable trusts linked with the Gandhis against the orders of Income Tax (I-T) authorities to transfer their tax assessments to the central circle.

The bench also questioned senior advocate Abhishek Manu Singhvi, representing AAP, why there was a five-month delay in filing of the writ petition. 

"In cases like this, delay can be fatal. Why was there a delay," it asked.

Singhvi submitted that a five-month delay should not come in the way of the larger issue. However, the bench did not agree with this contention.

The top court made it clear that it is only concerned with the legal issue and not with the politics and fixed the matter for further consideration on October 9.

In May this year, the Delhi High Court dismissed a batch of nine petitions including three by Congress leaders Sonia Gandhi, Rahul Gandhi and Priyanka Gandhi Vadra, and another by the Aam Aadmi Party (AAP) challenging the orders of the income tax department to transfer their tax assessment from the faceless assessment to the central circle.

Gandhis primarily opposed their tax assessment along with Bhandari's group. The faceless assessment scheme removes physical contact between the taxpayer and the taxman by using artificial intelligence and machine learning to randomly select tax cases.