​BBC India on Radar for Long, Was Defiant Despite Various Notices over Transfer Pricing: I-T Sleuths

As income tax (I-T) sleuths reached the BBC India offices on Tuesday, amid the controversy over BBC’s documentary on PM Narendra Modi and the Gujarat riots, sources revealed that the organisation has been on the I-T radar for long over violation of the transfer pricing clause. “The Income Tax Authorities are currently at the BBC offices in New Delhi and Mumbai and we are fully cooperating. We hope to have this situation resolved as soon as possible," BBC said in its response.

BBC India, which operates on behalf of BBC London, produces television software and other news material on behalf of the parent company. Sources in the I-T department confirmed to CNN-News18 that only two offices of BBC India were surveyed – one in Mumbai and other in Delhi. Investigation against BBC is being done by the Director General (Mumbai) of the I-T department.

I-T sleuths reveal that the clause of transfer pricing is invoked when the department finds that a particular organization is billing less to the parent organization compared to the market pricing and at the same time, the associated organization is not “keeping an arm’s length".

On the issue of transfer pricing, BBC India has received various notices from the I-T department in the past, however, the organization has been defiant, said the sleuths.

‘SURVEY, NOT A SEARCH OR RAID’

I-T sleuths specifically highlighted that Tuesday’s action was a survey under section 133A of the Income Tax Act and not a search or a raid. Under the section, a survey can be conducted only during business hours and no valuables can be seized.

However, in case, during a survey, the department finds adequate evidence and tax-evaded valuables, a survey can be converted into a search/raid. A raid/search is conducted under section 132 of the Income Tax Act.

Sources reveal that some mobile phones and laptops of senior BBC officials were taken for some time and released after copying data.

A former I-T official told CNN-News18 that the onus of proving violation under transfer pricing lies on the department and is usually a tough task. In most cases of transfer pricing, the department comes back empty-handed at the appeal level.

The survey after the controversial documentary has given the opposition more ammunition, amid their allegations “over the use of Indian agencies to muzzle those criticising the government".

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