The Income Tax Department on Tuesday conducted survey operations at the offices of the British Broadcasting Corporation (BBC) in Delhi and Mumbai as part of an investigation into alleged tax evasion by the foreign broadcaster. The move comes weeks after the London-headquartered broadcaster aired a two-part controversial documentary “India: The Modi Question”.
The survey is aimed at investigating issues related to international taxation and transfer pricing of BBC subsidiary companies, officials said. Earlier the BBC had been served notices but it was “defiant and non-compliant” and had significantly diverted its profits, they alleged.
The department is scrutinising documents related to the business operations of the British broadcaster and its Indian arms, they said.
The BBC said it is fully cooperating with tax authorities. Taking to Twitter, the press office of the BBC said, “The Income Tax authorities are currently at the offices in New Delhi and Mumbai and we are fully cooperating. We hope to have this situation resolved as soon as possible.”
The Income Tax officials launched the synchronised action at 11 am in Delhi and Mumbai and asked the BBC staffers to keep their phones at a particular spot inside the premises and cooperate, officials said.
According to Income Tax rules, transfer pricing “generally refers to prices of transactions between associated enterprises which may take place under conditions differing from those taking place between independent enterprises. It refers to the value attached to transfers of goods, services and technology between related entities”.
It also refers to the value attached to transfers between unrelated parties which are controlled by a common entity. Following the news reports on the development, curious onlookers and media crews thronged the BBC office at Kasturba Gandhi Marg in Connaught Place in the national Capital. In Mumbai, the BBC office is located in the upscale Santa Cruz area.
As part of a survey, the Income Tax department only covers the business premises of a company and does not search residences and other locations of its promoters or directors.
Last week, the Supreme Court dismissed a plea seeking to impose a complete ban on the BBC in India in the wake of the controversial documentary, terming the petition “entirely misconceived” and “absolutely meritless”.
On January 21, the Government issued directions to block multiple YouTube videos and Twitter posts sharing links to the documentary.
Reacting to the development, the Editors Guild of India said it was “deeply concerned” about the Income Tax surveys and termed it a continuation of a trend of using Government agencies to intimidate media outlets critical of the ruling establishment.
The Guild said great care and sensitivity should be shown in all such investigations so as to not undermine the rights of journalists and media organisations.
