NEW DELHI, FEBRUARY 14: The Income Tax Department on Tuesday conducted survey operations at the BBC’s offices in Delhi and Mumbai as part of an investigation into alleged tax evasion, officials said.
The action, which led to a sharp political debate with the ruling BJP accusing the BBC of “venomous reporting” and the Opposition slamming the move, comes weeks after the broadcaster aired a two-part documentary, India: The Modi Question.
The survey is being carried out to investigate issues related to international taxation and transfer pricing of BBC subsidiary companies, officials said. BBC had been served notices in the past but was “defiant and non-compliant” and had significantly diverted its profits, they alleged.
The Department is looking at documents related to the business operations of the London-headquartered broadcaster and its Indian arms, they said.
The BBC said it is fully cooperating with tax authorities.
“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 press office of the BBC said on Twitter.
The synchronised surprise action began at 11 a.m. with Income Tax officials reaching the BBC offices in Delhi and in Mumbai. BBC staffers were asked to keep their phones at a particular spot inside the premises and cooperate, officials said.
According to I-T 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 un-related parties which are controlled by a common entity.
As news spread, curious onlookers and media crews were seen outside the BBC office at central Delhi’s Kasturba Gandhi Marg. In Mumbai, the office is at 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 raid residences and other locations of its promoters or directors.
The Supreme Court last week 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.
The Editors Guild of India said it was “deeply concerned” about the Income Tax surveys and termed it continuation of a trend of using Government agencies to intimidate and harass media outlets critical of the ruling establishment.
In a statement, 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.
The BJP, in its reaction, accused the BBC of unleashing “venomous” reporting against India, and alleged that its propaganda and the Congress’ agenda go together.
BJP’s national spokesperson Gaurav Bhatia rejected the Congress’ criticism of the I-T action and said the Government agency should be allowed to do its job.
He termed the BJP the “most corrupt” organisation in the world and said the Congress should remember that then Prime Minister Indira Gandhi had also banned the broadcaster.
Congress general secretary Jairam Ramesh used a Hindi idiom to attack the Government, saying “Vinash Kale, Vipreet Buddhi” (When doom approaches, a person’s intellect works against his interest).
“Here we are demanding JPC on the Adani issue but the Government is after the BBC. Vinash Kale ,Viprit Buddhi” Ramesh said.
“Since agencies doing these Valentine Day ‘Surveys’ how about @IncomeTaxIndia, @SEBI_India & @dir_ed conduct one on govt’s most valued sweetheart Mr. A?” was Trinamool Congress MP Mahua Moitra’s response to the I-T move.
The CPI (M) hit out at the Centre over IT “raids” and questioned if India remains the “mother of democracy”.
“First ban BBC documentaries. No JPC/enquiry into Adani exposures. Now IT raids on BBC offices! India: ‘Mother of democracy’?” party general secretary Sitaram Yechury said in a tweet.
CPI MP Binoy Viswam described the I-T action as an attempt of a “frightened government” to “strangle” the voice of truth.
“Raid on BBC! They call it survey! This survey is killing spree of a frightened govt. to strangle the voice of truth. World is witnessing it. When Modi preside over G-20, they will ask about India’s record on freedom of press. Can he reply truth fully?” Viswam said in a tweet.
In a statement, former Jammu & Kashmir Chief Minister Mehbooba Mufti said, “The gloves are off and there is a price one pays for fighting for truth.”
The BJP hit back by labelling the BBC the “most corrupt” corporation in the world. “Its propaganda and Congress’ agenda go together”, said the party. “The Congress should remember that former Prime Minister Indira Gandhi banned the BBC.”
The Income Tax Act empowers officials to enter any premises of the assessee, such as residences, shops, factories or offices for a search and seizure operation. Surveys, which are conducted under Section 133A of the Income Tax Act, take place only on business premises. Surveys start during normal business hours, whereas searches can be conducted at any time of the day. During surveys, I-T officials look into documents such as books of accounts, bank accounts, cash, stock and non-valuable documents.
According to reports, the employees of the broadcasting corporation were asked not to use their computer systems and phones, including their personal ones. Reports quoting sources said the employees working in the afternoon shift at the BBC’s Delhi office were asked to work from home, while those present in the office were asked to leave early.
A BBC employee based in New Delhi told AFP that the tax raid was in progress and that officials were “confiscating all phones”.
Another BBC staffer based in Mumbai confirmed the broadcaster’s office in India’s commercial hub was also being raided.
An official at the scene said: “There is Government procedure happening inside the office”, declining to disclose their Department. Meanwhile, the Income Tax Department could not be reached for comment by AFP.
Last month, the broadcaster aired a two-part documentary alleging that Hindu nationalist Modi ordered police to turn a blind eye to sectarian riots in Gujarat State, where he was premier at the time. The violence left at least 1,000 people dead, most of them minority Muslims.
India’s Government blocked videos and tweets sharing links to the documentary, using emergency powers under its Information Technology laws. Government Adviser Kanchan Gupta had slammed the documentary as “hostile propaganda and anti-India garbage”.
University student groups later organized viewings of the documentary despite campus bans, defying Government efforts to stop its spread. Police arrested two dozen students at the prestigious Delhi University after stopping a screening there in late January.
‘Fully cooperating’, says BBC
Meanwhile, The BBC said on Tuesday that it is “fully cooperating” with the Income Tax authorities and hoped that the situation will be resolved “as soon as possible”.
The UK-headquartered public broadcaster did not give further details of what has been described as “surveys” by the I-T Department. “The Income Tax Authorities are currently at the BBC offices in New Delhi and Mumbai and we are fully cooperating”, a BBC spokesperson said in a statement.
“We hope to have this situation resolved as soon as possible”, the spokesperson said.
The documentary also triggered coordinated Indian diaspora protests at BBC offices across different UK cities at the end of last month. Earlier, The UK Government responded in the House of Commons to the protests by insisting the BBC as a media organisation was “independent in its outlet” and reiterating its commitment to enhancing ties with India.
Press freedom
Press freedom in the world’s biggest democracy has suffered during Modi’s tenure, rights activists say. India has fallen 10 spots to 150 out of 180 countries in the World Press Freedom Index, compiled by Reporters Without Borders, since he took office in 2014. Critical reporters, particularly women, say they are subjected to relentless campaigns of online abuse.
Media outlets, international rights groups and foreign charities have also found themselves subjected to scrutiny by India’s tax authorities and financial crimes investigators. Late Catholic nun Mother Teresa’s charity last year found itself temporarily starved of funds after the Home Ministry refused to renew its licence to receive foreign donations. Amnesty International announced it was halting operations in India after the Government froze its bank accounts in 2020, following raids on its offices.
In 2021, Indian tax authorities raided a prominent newspaper and a TV channel that had been critical of the Government’s handling of the Coronavirus pandemic, triggering accusations of intimidation.
‘Campaign of violence’
The 2002 riots in Gujarat began after 59 Hindu pilgrims were killed in a fire on a train. Thirty-one Muslims were convicted of criminal conspiracy and murder over that incident. The BBC documentary cited a previously classified British Foreign Ministry report quoting unnamed sources saying that Modi met senior police officers and “ordered them not to intervene” in the anti-Muslim violence by right-wing Hindu groups that followed.
The violence was “politically motivated” and the aim “was to purge Muslims from Hindu areas”, the Foreign Ministry report said. The “systematic campaign of violence has all the hallmarks of ethnic cleansing” and was impossible “without the climate of impunity created by the State Government…Narendra Modi is directly responsible”, it concluded.
Modi, who ran Gujarat from 2001 until his election as Prime Minister in 2014, was briefly subject to a travel ban by the United States over the violence. A special investigative team appointed by India’s Supreme Court to probe the roles of Modi and others in the violence said in 2012 it did not find any evidence to prosecute the then Chief Minister.
(Agencies)
