New Delhi: The Delhi High Court said that Income Tax department had the powers reopening of tax assessment proceedings for the year 2011-12 dismissing petitions by Congress president Rahul Gandhi and former party president Sonia Gandhi challenging to do so in connection with the National Herald case. A plea by Congress leader Oscar Fernandes has been dismissed.

A bench of justices S Ravindra Bhat and AK Chawla said the petitioners could raise the issue with the tax department. Sonia Gandhi and Fernandes are shareholders in Young Indian, and the tax department claims they did not disclose their income from the company. Similarly, the tax department’s claim is that Rahul Gandhi withheld information of his directorship of Young Indian, which would have resulted in him having an income of Rs 154 crore and not about Rs 68 lakh, as was assessed for the year in question.

Appearing for the three, senior advocate P Chidambaram contended that there was no income at all and that there was no tangible evidence for reassessment. He submitted that the disclosure of interest in a not-for-profit company was not necessary.

The IT department’s argument is that the valuation of Young Indian’ shares should be based on its acquisition of Associated Journals Ltd, which publishes National Herald.

According to the IT department, Young India (YI) obtained the right to recover Rs 90.25 crore that the Associated Journals Ltd (AJL) owed to the Congress party for Rs 50 lakh.

However, the court said that the disclosure of the taking over of the shares by the trio should have been given, adding that the acquisition of certain shares or property can lead to income.

Separately, the tax department is pursuing a demand for Rs 249.15 crore of tax from YI for the assessment year 2011-12. The income tax cases against the Congress leaders came after a complaint was filed by Bharatiya Janata Party (BJP) leader Subramanian Swamy before a trial court in connection with the National Herald case.