Setback for Ramdev as Delhi High Court directs Patanjali to cooperate with IT officials in special auditing

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In a setback to Ramdev Patanjali, a Delhi High Court bench has directed the Ayurveda company founded by controversial yoga guru to cooperate with Income Tax authorities for special auditing.

Ramdev
File photo

Patanjali Ayurveda Ltd had challenged Assessment Officer’s decision to order special audit for assessment year (AY) 2010-2011. It had argued that the AO was trying to take “scrutiny through special auditor as an easy route to escape his primary duty to examine the books and the returns and complete the assessments, in time.”

The High Court bench comprising Justices S Ravindra Bhat and Prateek Jalan, according to LiveLaw website, said, “The assessee is directed to co-operate with the Special Auditor. The period during which the interim order operated shall be excluded for the purpose of calculation the period for completion of such special audit. The writ petition is dismissed, subject to the above observations.”

It added, “Undoubtedly, the AO has a duty to apply his (or her) mind and not fall back upon the provision of special audit in all routine cases. However, when the AO does feel that information is not forthcoming in a timely manner (as appears to have occurred in this case) her choices are limited – to let go of the stage of inquiry, and complete the assessment, or, disallow what is considered appropriate. The AO quite correctly felt that the latter course would not be appropriate; he therefore, ordered special audit, which was quite reasonable…”

In August this year, Patanjali had come under scanner after it emerged that it pumped in Rs 325 crore in companies that have zero operations. The company was accused of accused of creating shell companies with zero operations, prompting many to demand for investigation in ‘shady transactions.’

Ramdev has often faced criticism for enjoying the support of the Centre’s Narendra Modi government. His critics have alleged that the controversial baba received hundreds of acres of land across India because of his proximity to Prime Minister Narendra Modi and the BJP top brass. The action by the Income Tax department is being seen as a sign of diminishing powers of the Modi government at the Centre.

Bureaucrats have grown in confidence to act against irregularities particularly after the BJP suffered electoral setbacks in Madhya Pradesh, Rajasthan and Chhattisgarh.

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