The Enforcement Directorate (ED) has been questioning Congress MP Rahul Gandhi for three days (13 June-15 June) in linkage with a money-laundering investigation into the matters of the National Herald newspaper.

On Monday (June 20), Rahul Gandhi will be questioned once more, whereas his mother Sonia Gandhi will also be questioned on June 23. The agency had previously interrogated Congress politicians Mallikarjun Kharge & Pawan Bansal.

What exactly is the situation?

The ED case is based on a trial court order that authorised the Income Tax Department to investigate the affairs of the National Herald newspaper and as well as conduct a tax assessment of Sonia and Rahul. A petition was filed by BJP MP Subramanian Swamy in 2013 tends to result in the order.

On December 19, 2015, the trial court granted Sonia and Rahul bail in the case.

Sonia, Rahul, and others have been accused of misappropriating funds by paying Rs 50 lakh to Young Indian (YI) to acquire the right to recover Rs 90.25 crore that AJL owed to the Congress, according to Swamy’s complaint before the trial court.

What Is The Case With National Herald?

In 1938, Jawaharlal Nehru founded The National Herald. It was printed by AJL, a Section 25 corporation that is typically a non-profit organisation.

The Urdu Qaumi Awaz and the Hindi Navjeevan were also published by AJL.The company owns prime real estate in Delhi, Mumbai, Lucknow, Patna, and Panchkula, among other cities.

AJL lost money and stopped issuing in April 2008 due to overstaffing and due to a lack of revenue.

After the newspaper’s publication was halted, AJL’s income came primarily from the sale of various properties it owned. 5A Herald House, Bahadurshah Zafar Marg, New Delhi was one of its key properties.

Meanwhile, the company received unsecured, interest-free loans from All India Congress Committee (AICC), the apex body of the Indian National Congress, for a few years up to 2010.

What happened after that?

AJL’s mortgage debt have risen to Rs 90.21 crore by the end of 2010. AJL’s management appears to be making no initiative to repay the AICC amidst owning property that is said to be worth much more than the amount of its debt.

AICC redistributed its debt to YI on December 28, 2010, with over two months before YI paid AICC anything. In fact, YI didn’t even have a bank account at the time.

According to the IT investigation, YI opened its office at AJL-owned Herald House in 2010 without any agreement or payment of rent to AJL.

The IT Department has even cast doubt on the alleged loan from Congress to AJL, claiming that there is no proof of it outside of AJL’s books.

“The loan entry amount of Rs 90.21 crore was set to ensure that the amount was just enough to allot 99 percent share of AJL to the Appellant (YI),” according to the IT receipt to the IT Appellate Tribunal.

What is the current state of the IT case?

Rahul had previously been issued a notice by the IT Department for allegedly concealing information about his designation as a director of Young Indian.

According to the report, Rahul’s shares in Young Indian generated a revenue of Rs 154 crore, although only Rs 68 lakh had been assessed previously.

It sent roughly comparable notices to Sonia and Fernandes while attempting to reopen the assessment in order to determine the “fair market value” of the shares.

Rahul, Sonia, and Fernandes disputed this, claiming that no earning had escaped assessment and that all facts had been disclosed.

One of the main arguments against the reassessment was that YI had applied for and received exemption under the Section 12A of the Income Tax Act on May 9, 2011, as a Section 25 company.

However, on October 26, 2017, the CIT(E) decided to cancel the registration granted to YI u/s 12A on the grounds that YI had engaged in no genuine charitable activities, either in continuation of its objects or otherwise.

The IT Tribunal upheld the cancellation. The IT Appellate Tribunal ordered the IT Department to conduct additional investigations into the matter on March 31, 2022, while also dismissing some of the department’s tax demands against YI.

A Relief For Rahul and Sonia Gandhi

The Enforcement Directorate (ED) on Thursday (June 16) granted Congress leader Gandhi’s request to be relieved from questioning in the National Herald case. On June 20, he will appear before the central agency for further questioning.

The development comes just hours after Gandhi requested that questioning be postponed due to his mother, Congress interim chairperson Sonia Gandhi’s, health.

Since Monday (June 13), Rahul Gandhi was being investigated by the ED for about 30 hours.

Rahul Gandhi was interrogated for nearly ten hours on Wednesday, with an hour break. On Tuesday, the Wayanad Congress MP was interrogated for nearly eight hours.