I-T dept surveys offices of Newslaundry, NewsClick

NEW DELHI: The Income Tax department on Friday carried out a “survey operation” at the office of website Newslaundry as part of an investigation into the finances and funding of the organisation, according to four people familiar with the matter who asked not to be named.

The department also carried out a separate survey operation at the office of NewsClick.

One person familiar with the matter said the I-T action came after certain gaps were noticed in the financial statements, as well as irregularities in the foreign investments, received by both the portals. A second person said the department was looking into the sources of funds of current as well as previous promoters of the websites and that it had “sufficient reason” to carry out a survey.

“NewsClick and Newslaundry received Foreign Direct Investment (FDI) at very high premium while their net worth was very low. There are also gaps in the financials of both the companies, which suggest tax evasion but we are verifying the same,” the first person added.

There were no statements from Newslaundry and NewsClick on the I-T action till late evening. HT reached out to Newslaundry CEO Abhinandan Sekhri via text and WhatsApp messages, and sent an e-mail to the company, but there was no response. NewsClick founder Purkaystha didn’t respond to HT’s text query.

While the foreign investment in NewsClick was received in 2018-19, this officer didn’t disclose the period when Newslaundry received such funds from outside India.

According to the Newslaundry website, much of the company’s equity is held by its three co-founders, Sekhri, Roopak Kapoor, and Prashant Sareen, and by an impact fund Omidyar Network (the current managing director and partner of its Indian operations is Roopa Kudva). Madhu Trehan, another co-founder, divested her stake in favour of the other three co-founders.

She did not respond to a text message seeking comment. The I-T department and the finance ministry did not respond to e-mail queries and text messages.

In a survey operation, which is carried out under provisions of Section 133 A of the Income Tax Act, 1961, tax officials cover only the business premises of an assessee and those linked to it and not their residential addresses.

However, tax authorities can seize documents. During a survey, I-T officials look into documents such as books of accounts, bank statements, and details of cash and stock. The I-T teams reached the Newslaundry and NewsClick offices at Sarvodaya Enclave and Saidulajab, respectively, in the morning, and checked the documents till evening while asking those in the office to switch off their phones.

Officials said they have seized documents and electronic communications from both the companies.

As the next step, the survey team will study the finances of the companies and prepare a report for further action, if any, by the concerned assessing officer, so that a formal investigation can be launched under the IT Act , a third person, a government officer explained.

I-T officials had visited the offices of both the portals on June 30 as well and notices were served to the concerned office bearers.