ITAT’s Order exposes the lies of Prannoy Roy and NDTV

ITAT order is meticulous, detailed and presented with precision showing the ways in which NDTV did money laundering and tax evasion

ITAT order is meticulous, detailed and presented with precision showing the ways in which NDTV did money laundering and tax evasion
ITAT findings pooh-pooh the claims of Roy not taking Black Money

We have produced a detailed analysis and point by point rebuttal to the lies propagated by Prannoy Roy and NDTV gang on the 385 page Order of Income Tax Appellate Tribunal (ITAT). The Income Tax finding of huge tax evasion by NDTV is now upheld by the ITAT, exposing the Rs.903 crore tax evasion and money laundering. While you may think that this is a long post, we urge you to read this as it shows how diligently the ITAT has examined the claims and arrived at its conclusions. NDTV is not the first to try and use layering to hide the source of investment and it won’t be the last. By reading this post, you will get an appreciation for what the current government is up against when it goes after tax evaders.

The ITAT in its judicial order dated 14.07.2017 in the case of the NDTV for assessment year 2009-10, while dismissing the NDTV’s appeal as non-maintainable, has held that the assessing officer rightly made the assessment order by assuming jurisdiction u/s 144 of the Act.

Claim of Prannoy Roy & NDTV: Both NDTV & its promoter has commitment of integrity & transparency & high ethical value. NDTV official communication December 26, 2016:

“Not one rupee has ever been siphoned from NDTV by anyone or its promoters, as you allege. Rigorous and regular audits conducted by top global firms establish this, the most recent of which were carried out every year and are published and circulated widely. In addition, NDTV has conducted forensic audits of the highest standards. These audits are part of our commitment to exemplary corporate governance, but of course, their findings contradict your wild and groundless accusations. Too bad.”

Prannoy Roy statement on 9th June 2017 during the Press Club Event: “This is not about NDTV. This is a signal to all of us. We can fix you even if you haven’t done anything”.

Real truth: Dr. Prannoy Roy made all efforts to hide financial details of his foreign subsidiary companies used for money laundering of Rs.11OO crores so that tax fraud had remained undetected and had also lied to shareholders of NDTV and regulatory authorities- Income Tax, SEBI, etc. The ITAT in its judicial order dated 14.07.2017 in the case of the NDTV for the assessment year 2009-10, while dismissing the NDTV’s appeal as non-maintainable, has held that the assessing officer rightly made the assessment order by assuming jurisdiction u/s 144 of the Act. The tribunal examining the claim of the NDTV that it had obtained approval u/s 212(8) of Companies Act, 1956 for not disclosing the financial details of foreign subsidiary companies along with the annual report of the NDTV filed before income Tax Authority has held as under:

“To our utter surprise, the approval of the Ministry of Corporate Affairs was granted to assessee only on 03.07.2009 but in Directors’ Report dated 30.04.2009 Chairman of the company Dr. Prannoy Roy has disclosed to all the regulatory authorities such as SEBI and stock exchanges that approval how it has already been granted by the Ministry of Corporate Affairs. In fact, the application for such approval was made only on 08.05.2009.” (Para 41 at page 100)

The ITAT took serious note of the false and fraudulent declaration made by Prannoy Roy in Directors’ Report for the year 2008-09:

“It is unfortunate that before making an application for exemption the assessee has disclosed in its one of the most important statements i.e. Directors’ Report, the company has announced that it has been granted approval even when there was no application made to the concerned authority and with such a blatant violation of law involving the fiscal and corporate liability of the assessee to go unnoticed so far. However, the tribunal in the present case except expressing anguish cannot cross the limits laid down by the law. It is for other regulatory and supervisory agencies to get alarmed with such an act. In view of these glaring facts, we do not have any hesitation to say that the conduct of the assessee shows that assessee had never an intention to disclose the details of its subsidiary companies and its financial transactions to its stakeholders and to regulatory authorities including the income tax authorities.” (Para 43 at page 101)

NDTV official communication March 30, 2017
Claim of Prannoy Roy and NDTV: The allegation of money laundering of US $150 million by Income Tax Department is a “witch-hunt” based on “same old” false accusations and politically motivated.
“Two of the world’s most respected companies ~ GE and NBC – are being accused of “money-laundering” and “name-lending.” The case may go to the Indian Supreme Court shortly. The case is a result of a series of fabrications and lies by a shady and secretive group called PGurus. Widely known as PhoneyGurus.

  1. This entire issue relates to a blatantly false case.
  2. In 2008, GE (USA) invested $150 million in NDTV through their media subsidiary NBC(USA).
  3. Six years later, in 2014, the Income Tax Department of India – without any evidence at all called this investment a “SHAM transaction”, thereby accusing GE and NBC of being “fronts” or “name-lenders” for “money-laundering”.
  4. The Income Tax Department is in effect accusing the CEOs of GE and NBC of a crime for which, under US law, they will go to jail, if convicted. The CEOs involved in the deal are Jeff Immelt (CEO of GE who has met PM Modi on several occasions, including recently) and Jeff Zucker (former CEO of NBC and now President of CNN).
  5. This capricious behaviour by the IT department is damaging for India and deeply harms the reputation of our country internationally at a time when we are trying to pitch India as an ideal place to do business.
  6. For the Income Tax Department to call some of the world ‘s most respected business leader like Mr. Immelt and Mr. Zucker ‘money launderers’ amounts to what is widely known as “Tax Terrorism”.
  7. On this baseless accusation, NDTV is being continuously harassed as part of a concerted effort to silence an Indian media house that has always stood and fought for independent journalism – despite repeated threats and intimidation.
  8. NDTV has appealed against the case, It has not been heard for two-and-a-half years as the income tax authorities have asked for no less than 20 adjournments. Since the first hearing, NDTV has not asked for a single adjournment. It suits the tax department to have this case drag on since it has no evidence of its wild and unsubstantiated allegations
  9. The Enforcement Directorate (which is still investigating the case) clearly told the Delhi High Court that while complaints against NDTV have been received, the allegations were not supported by even prima facie material.
  10. NDTV remains committed to fighting the attempts to suppress independent media in India.”

Prannoy Roy statement on 9th June 2017 during the Press Club: “I commit to you here that NDTV, Radhika (his wife) and I have never touched one rupee of black money, never engaged in bribery”.

Real truth: Examining the findings of the Assessing officer and Dispute Resolution Panel (DRP), a body consisting of three senior commissioners, that NDTV had introduced its own black money of Rs. 642.54 crores (US$150 million) using its paper subsidiary company in the Netherlands through a complex web of transactions, the ITAT has confirmed the decision of Assessing Office and has also highlighted the role of Prannoy Roy, Radhika Roy and their top global audit firm PWC in the money laundering of Rs. 642.54 crores. The relevant part of the decision of ITAT is extracted below:

“On analysis of the financial statement of the NNIH, it is apparent that this company does not have any substance but was merely created for the purpose of issue of above shares of Rs. 642 crore from USBV and taking away the dividend from it to the assessee’s group company which is 100% owned by the assessee.” (Para 103 at page 300)

  1. Further, commenting upon the justification for huge premium of Rs. 642.54 crore on a share capital of Rs. 6 lakh only, the ITAT recorded:
    “on the issue of the premium of the shares, the assessee has merely done lip service… No rationale were produced before us for distribution of the dividend by producing the board meeting of NNIH to exhibit the business consideration behind declaration of dividend of Rs. 643 crore only to NDTV Group subsidiary and not also to USBV holding 31% share in that company.”(Para 103 at page 300 & 301)
  2. On the issue of repeated reference made by NDTV to the investment by the GE group, the ITAT remarked:
    “It is vehemently claimed by the assessee that investor that investor in NNIH is GE Group. However, on looking at the structure of the investments in this company, it is part of the NBCU group of which 80% stake is held by the GE Group. There is no reference of the amount invested in the USBV by the GE Group for making investments in the USBV. No details has been placed by the assessee before us or before lower authorities except stating that the investor company is part of GE Group and that group has made investment in this company which is turn invested in NNIH… In any case credibility and genuineness of the investments cannot be solely determined by showing the names but only by showing the substances of the transactions… It is apparent that transaction entered into by the parties lacks substances and therefore, whoever is the party and howsoever credible it is, heavier burden is cast on them to explain the purpose and rationale of so called investment”.(Para 105 at page 303 & 304)
  3. Referring to the agreements created between the parties and the conduct of the parties, the ITAT has observed:
    “…these agreements were merely created/ executed for executing the financial transaction. The form of the transaction on reading of the agreement shows that two groups coming together for development of the business but the substance of the transaction is to pass money from one group to another group by creating complex holding subsidiary structure, lengthy and complex agreement which were never acted upon. The investment decision by the investor was taken without any valuation report, due diligence report i.e. financial and legal both, and the exit decision was also taken by investor without getting its assets fairly valued. It is really unbelievable in the corporate world that an investor behaves in that manner. It can only happen in case the investor is not concerned with what happens with the money he invests but only interested in completing pre-conceived financial transaction” (Para 107 at page 308)
  4. The comments of the highest fact finding authority i.e. ITAT on corporate structure of NDTV consisting of numerous foreign subsidiaries are:
    “In the present case, according to us it is a clear cut case of “abuse of organization form/ legal form and without reasonable business purpose and therefore, no fault can be found with the order of the Assessing officer/ DRP in charging to tax Rs. 642 crores by re-characterizing the conditions according to its economic substance and imposing the tax on the actual controlling Indian entity. In the present case we do not have any doubt that the transaction used principally as a device for the distribution/ diversion of sum to the Indian entity on review of all the facts and circumstances surrounding the present transaction. In the present case the beneficial owner of the money is the assessee.” (Para 108 at page 312)
    “… The creation of a subsidiary in a particular jurisdiction has to have a business case. It is a matter of common knowledge that Netherland was classified as one of the low tax jurisdiction. Netherland at that particular time had too generous tax exemption of dividend received, no beneficial owner test for withholding tax on dividends, not putting details of trust on public record, does not require company accounts or beneficial ownership to be publicly available and does not maintain company ownership details in official records. Netherland jurisdiction also known for “virtually no substance requirement” in the form that holding does not have employees which can also be run through trust and management services in Netherland…. In the investor company, the equity share capital was also held through the entity from Bermuda jurisdiction, which is also similar jurisdiction for tax purposes as Netherland.” (Para 113 at page 321)
  5. Emphasizing the onus was upon NDTV to furnish complete evidence, the Tribunal observed:
    “While discharging its onus as it is the primary responsibility of the assessee to fully disclose all parts of a transaction when taxability of a transaction is being tested. The assessee cannot show part of the picture without disclosing the complete movie, which comprises of the series of transactions without explaining each step and business rationale behind that.” (Para 113 at page 322)
  6. Observing that the revenue had proved that the money had come back to the assessee through a series of liquidations and mergers of foreign paper subsidiary companies, the ITAT took cognizance of the fact that the money trail proved by the revenue could not be controverted by the assessee.
    “No doubt when it comes to taxing the real owner or beneficial owner of the financial transaction higher burden is cast on the revenue and therefore, revenue is duty bound to prove the money trail. According to us the revenue has established that the money has come back to the assessee… money trail established by the Revenue could not be controverted by the assessee. This money trail stares so glaringly on the various complex structures created by the assessee that without proving any substance one cannot reach to any other conclusion but to the conclusion that series of the transactions entered into by the assessee were to transfer Rs. 642 crores from the investor company or the owner of the investor company to the assessee.”  (Para 109 at page 313)
  7. On the assessee’s reply before the ITAT to the emails forming part of show cause notice for penalty issued by the assessing officer on 15.06.2016, the ITAT had the following to say:
    “… it is apparent that emails are not denied that the executives of the assessee are recipient, sender, and part of the correspondence. The assessee  has strategically avoided commenting on the content of the email… Had these mails were inappropriate/ false evidence assessee would have denied them vehemently? Instead, the assessee has asked AO to establish the genuineness, authenticity, and sources of the evidence without denying it. According to us, there is no occasion to establish the genuineness, authenticity and sources of the evidences unless assessee denies them. It shows that assessee is trying to avoid answers to the these evidences.” (Para 111 at page 315)
  8. The ITAT has taken note of the importance of the the conversations between Dr. Prannoy Roy and Mr. Vivek Mehra of PWC(through emails exchanged barely 2 days before the signing of the agreement which were reproduced by the ITAT in its order as extracted below) and these emails have proved personal involvement of Dr. Prannoy Roy in money laundering of Rs. 642.54 crore:

    Mr. Vivek Mehra (PWC) to Dr. Prannoy Roy & Others: We must not mention that NDTV is receiving the 150 m as dividend or otherwise. If asked a question what will the money be used for ??? We need to decide how to answer this question carefully. (Para 111 at page 317)
    Dr. Prannoy Roy to Mr. Vivek Mehra (PWC): if possible, it is important that the press release should make clear that the money comes in to NDTV and does not stay in Networks. (Para 111 at page 317)
    It has been agreed that management control will always remain with NDTV Ltd. (Para 111 at page 319)
    Mr. Vivek Mehra (PWC) to Dr. Prannoy Ray & Others: Appreciate your problems but honestly the problem could become worse if we give a handle to the tax authorities.”(Para 111 at page 319)
  9. Rejecting the argument of NDTV that the money was routed through banking channels, the ITAT observed:
    “During the course of hearing before us the revenue has produced the money trail as well as certain emails, which were not at all denied by the assessee. Therefore in our view the assessee has submitted scanty details and also tried to hide certain facts by not denying or owning the emails exchanged. Further it is too naive to accept in the facts and circumstances of the case that any transaction carried out through banking channel should be believed as genuine. In fact the money mostly rout through banking channels only and for these transactions only various sections of the income tax act are incorporated dehorn the banking transactions such as section 69, 68 etc. It is only the banking transactions through which the tax evaders bring their unaccounted money into the books by creating or dealing with the entities/ persons without substance.” (Para 117 at page 325 & 326)
  10. On the above facts and circumstances, the ITAT which is the highest fact finding authority confirmed the addition of Rs. 642.54 crore made by the assessing officer and already confirmed by the DRP. The concluding observations of the Tribunal are:
    “In view of the above facts and circumstances and for the reasons given by us we are of the opinion that Id Assessing Officer has correctly made the addition of Rs. 6425422000/- by invoking section 69A of the Act on account of money transferred by M|s. Universal Studio International BV which was routed to the coffers of the assessee by entering into series of mergers and liquidation by payment of dividend, loans without any obligation for repayment. Hence, we do not find any infirmity in the order of Id Assessing Officer as well as Id DRP and hence the additions of Rs. 642.54 cores in the hands of the assessee u/s 69A is confirmed” (Para 118 at page 326)

Summary of Order of Income Tax Appellate Tribunal (ITAT) in case of NDTV A.Y. 2009-10

  • In the year 2009, Ministry of Corporate Affairs was hand in glove with Prannoy Roy in his conscious efforts to hide financial information of the foreign shell companies floated and used for money laundering of Rs. 642.54 crores: The ITAT has confirmed the finding of Income Tax Department that Prannoy Roy had made conscious and deliberate efforts to hide financial details of foreign paper subsidiary companies of NDTV by not attaching audited profit loss account, balance sheet and annual report of these foreign shell companies along with annual eport of the NDTV. The ITAT has further held that Prannoy Roy before making an application to Ministry of Corporate Affairs on 08.OS.2009 seeking exemption to the NDTV for not making disclosure of financials of foreign shell companies fraudulently misinformed both share holders and other regulatory authorities on 30.04.2009 that the Ministry of Corporate Affairs had already granted the exemptions to the NDTV. In a nutshell Prannoy Roy was sure that Ministry of Corporate Affairs will grant such exceptional exemption to NDTV even before approaching to the Ministry. In fact the Income Tax Tribunal has observed “it is for other regulatory and supervisory agencies to get alarmed with such an act. In view of these glaring facts, we do not have any hesitation to say that the conduct of the assessee shows that assessee had never an intention to disclose the details of its subsidiary companies and its financial transactions to its stakeholders and to regulatory authorities including the income tax authorities.”
  • The ITAT has confirmed the findings of Income Tax Department that NDTV Group had laundered its own black money of Rs. 642.54 crores using foreign paper companies.
  • The ITAT has also held that Prannoy Roy was personally involved in tax evasion and money laundering of Rs. 642.54 crores.
  • It is pertinent to mention here that as per result of investigation of income Tax Department, the NDTV and its promoters had laundered black money of Rs. 1,100 cores during A.Y. 2007-Off to 2000.10 out of which finding of black money of Rs. 642.54 crores and its laundering during A.Y. 2009-10 has been confirmed by the ITAT in case of NDTV. The other A.Ys. 2007-08 and 2008-09 involving similar issue of money laundering using foreign shell companies totaling to Rs. 450 crores are pending for adjudication. The finding of ITAT for A.Y. 2009-10 would be most relevant and applicable to other pending assessment years involving taxation of the black money of Rs. 450 crores.
  • ITAT has taken note of role of PWC in the scheme of tax evasion of Rs. 642.54 crores detected by Income Tax Department and confirmed by it. It is pertinent to mention here that PWC was involved in several other financial scandals like Satyam Computer.
  • The Order of ITAT has answered the entire allegation raised by Prannoy Roy against investigating agencies and Government of India as summarized in the enclosed note.

To conclude, it is important to understand that irrespective of whether it is money laundering, sham transaction or round tripping etc., one conclusion can be derived from DRP and ITAT orders, and will definitely hold all tests right up to the Supreme Court. This is the fact that there is premeditated tax evasion/ tax fraud by Prannoy Roy and his team. As has been detailed diligently, painstakingly and with amazing perseverance been unearthed by the Income Tax Department, it was found that much before the execution of the deal/ agreement with NBCU (GE Company), Prannoy Roy and his team along with PWC had deliberately devised a complex structure of dummy / shell companies across the world with no substance to bring USD 150 million(642 crores) into India without detection by tax authorities and ED etc. This fact has also been admitted by the CEO K. V. L Narayan Rao in his statement to the Tax Department and is further evident in the email trails gathered as evidence by the Tax Department.

Now over to the Enforcement Directorate (ED) to take up PMLA matters against NDTV and also the personal company of Prannoy Roy i.e. RRPR Holding (P) Ltd. In addition, Principal Commissioner of Income Tax should now take up criminal prosecution of Prannoy Roy and others under section 276C of the Income Tax Act 1961.

Mr. Prannoy Roy, do you have any answers except the joke – that You and your wife have not touched black money in your life?

We are a team of focused individuals with expertise in at least one of the following fields viz. Journalism, Technology, Economics, Politics, Sports & Business. We are factual, accurate and unbiased.
Team PGurus


  1. NDTV may be renamed as New Deceptive TeleVision. In the name of freedom, they wanted free from trial after defrauding the nation, they want freedom from trial for the crimes committed and they want freedom to do anything-commit fraud, hide truth, change facts, destroy evidence, debug IT department and abuse all government functionaries.

  2. Prannoy Roy and NDTV have been preaching honesty and questioning politicians and others alike. Burkha Dutt now jumped off the sinking ship. Every one of them needs to be brought to book including Vikram Chandra, Nidhi, and all others.

    • PGurus can merely function as a Thermometer, to tell the Doctor that the patient has a fever. For justice, there are courts and that is where this is being played out.


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