Young Indian Private Ltd, a company which has Congress bosses Sonia and Rahul Gandhi as its main stakeholders, will be investigated by income tax officials, the Delhi High Court ruled today.
The Delhi High Court on Friday allowed the Income Tax to launch an investigation into Young Indian Private Limited in the National Herald case. The Gandhi’s are directors in the company. “You can’t be arrogant,” the bench said, adding that Young Indian Pvt Ltd must submit its tax documents.
At the heart of the court case is Associated Journals Limited, publisher of three newspapers, including the National Herald, an English daily founded and edited by Jawaharlal Nehru before he became India’s first prime minister.
Associated Journals Limited (AJL) is an unlisted public company limited by shares, incorporated on 20 November 1937, with its registered office at Herald House, 5-A, Bahadur Shah Zafar Marg, New Delhi.
It was the brainchild of Jawaharlal Nehru,but it was never his personal property as it was started with the support of about 5,000 freedom fighters who became shareholders of AJL. The company’s capital was ₹5 lakh (US$7,800) divided into 2,000 preferential shares worth ₹100 (US$1.60) each and 30,000 ordinary (equity) shares worth ₹10 (16¢ US)each.
In 2008, the company shut down with an alleged unpaid debt of about $ 15 million.
The Delhi High Court on Friday declined to stay the income tax proceedings against Young India Ltd in the National Herald case, which involves Congress president Sonia Gandhi and vice president Rahul Gandhi.
A bench of Justices S Muralidhar and Chander Shekhar asked the company to approach the Income Tax assessing officer, after which Young India Ltd withdrew its petition to stay the I-T proceedings. It is now likely to approach the Supreme Court.
Earlier, a Patiala high court had allowed the probe but it was challenged in the Delhi high court.
Subramanian Swamy has levelled charges against Sonia Gandhi and Rahul Gandhi of setting up Young India to buy debt of Associated Journal Limited (AJL).
Subramanian Swamy is an Indian economist, mathematician and politician who serves as a member of the Rajya Sabha,the upper house of the Indian Parliament.He was the President of the Janata Party until it merged with Bharatiya Janata Party(BJP).
In his complaint, Swamy had alleged that the Congress granted an interest-free loan of Rs. 90.25 crore to the AJL, owner of the National Herald newspaper, established by Jawaharlal Nehru, which was either not repaid or repaid in case, which was in violation of Section 269T of the Income Tax Act, 1961.
BJP leader Subramanian Swamy has accused Rahul Gandhi, PM Nehru’s great-grandson, and Mrs Gandhi, of setting up Young Indian Company to buy the debt using Congress party funds even though Associated Journals allegedly had real estate assets worth at least $335 million, which would have cleared the debt.
Mr Swamy alleged that the Young Indian Company then owned all of the equity in Associated Journals and rented out its properties to profit its shareholders, including Rahul and Sonia Gandhi, who together controlled 76 per cent.
Others accused in the case filed by BJP MP Subramanian Swamy include Motilal Vora, Oscar Fernandes, Suman Dubey and Sam Pitroda. The court had summoned the accused persons, besides Young Indian on 26 June, 2014.
On 19 December, 2015, it had granted bail to Sonia Gandhi, Rahul Gandhi, Vora, Fernandes and Dubey, who had appeared before it pursuant to summons. Pitroda was granted bail on 20 February, 2016 when he had appeared in the court.
The Gandhi’s in January 2016 won an appeal to be exempted from personal appearances in court to answer allegations that they used their leadership of the Congress to misuse about $15 million of party funds for personal profit.
In the first official reaction from the Congress, party leader Randeep Singh Surjewala told sources, “The Gandhi have the option of approaching the Supreme Court. The I-T (department) cannot open a one-sided investigation. Subramanian Swamy is not inchare of I-T.”
“Young Indian is a trust which manages National Herald. No one can profit from it. Neither Sonia nor Rahul withdrew any money from it,” Surjewala said.
“We will now go back to the assessing officer and can raise objections, including challenging the move to re-open income tax investigation as the I-T department doesn’t have enough evidence to probe Young Indian,” said senior lawyer and Congress leader Abhishek Manu Singhvi.
Meanwhile, BJP spokesperson, Nalin Kohli responded by saying, “As citizens we are all complied to follow the law, now it’s on them how they will follow the law.”
While Sambit Patra of the ruling BJP described it as a “major setback” for the Congress, the opposition party claimed it was not a setback for the party and its leaders as the court has allowed the company to raise objections before the income tax assessing officer.