In a significant ruling on February 21, 2025, the Supreme Court of India declined to entertain a writ petition filed by PPK NewsClick Studio Pvt Ltd, the company managing the news portal NewsClick, concerning tax recovery demands. While dismissing the plea under Article 32, the apex court granted one week’s interim protection, allowing the company to seek relief from the High Court.
A bench comprising Chief Justice Sanjiv Khanna, Justice Sanjay Kumar, and Justice KV Viswanathan heard the matter. The company, represented by Senior Advocate Kapil Sibal, had approached the top court seeking relief from the Income Tax Department’s demand notice of Rs. 3.6 Crores, despite having only Rs. 28 Lakhs in its bank account.
During the hearing, CJI Sanjiv Khanna questioned why NewsClick had not approached the Delhi High Court and suggested an alternative legal remedy:
"Why don't you take recourse to the procedure which says that if a similar issue is already pending before the ITAT, the assessee can move an application asking the assessing officer to stay and wait for the order of the ITAT?"
Expressing concern over the financial implications of the tax demand, Kapil Sibal argued:
"Who will protect me? March 2 is my deadline, my business employees won’t be paid."
To this, CJI responded:
"We will protect you for a week only."
Despite refusing to entertain the petition under Article 32, the court granted interim protection for a week, preventing the authorities from taking coercive action against NewsClick during this period. The order stated:
"We are not inclined to entertain the present petition under Article 32 of the Constitution and leave it to the petitioner to approach the High Court under Article 226. However, we make no comments on the merits of the assertions made by the petitioner.... Let there be no coercive action against the petitioner for one week."
Applicability of Section 68 of Income Tax Act
Before concluding, Kapil Sibal raised an additional legal argument regarding Section 68 of the Income Tax Act, 1961, which deals with unexplained cash credits. He contended that the section was not applicable in NewsClick's case since the company’s transactions were conducted via cheques and not in cash. He emphasized:
"We will move the High Court. Section 68, on the face of it, doesn’t apply. It’s a banking transaction, nothing to do with cash. The assessment is more than what I have received! Everything is by cheque – there is not a single cash transaction. But anyway, we will go to the High Court. If they don’t give us relief, we will come back."
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This is not the first time NewsClick has faced legal action over income tax matters. On August 9, 2024, the Supreme Court had earlier disposed of a plea seeking a stay on the income tax demand, directing that pending the disposal of the appeal before the Income Tax Appellate Tribunal (ITAT), no further recovery should be made.
Subsequently, on November 18, 2024, the Supreme Court directed ICICI Bank to de-freeze NewsClick’s bank accounts, providing temporary relief to the news portal.
With the Supreme Court dismissing the writ petition, NewsClick must now move the High Court within the one-week interim protection period. If the High Court does not provide relief, the company may return to the Supreme Court for further legal action.
The ruling underscores the importance of following procedural remedies before approaching the Supreme Court, particularly when alternative legal avenues such as the Income Tax Appellate Tribunal (ITAT) and High Court are available.
Case Details : PPK NEWSCLICK STUDIO PVT. LTD. AND ANR. Versus DEPUTY COMMISSIONER OF INCOME TAX (CENTRAL CIRCLE-1) | W.P.(C) No. 158/2025
