The Income Tax department’s survey at the British broadcaster BBC revealed that its income in India is not commensurate with the scale of operations in the country, the Central Board of Direct Taxes said on Friday.
In a press release, the tax body also said that officials have found multiple pieces of evidence which indicate that the BBC has not paid tax on certain remittances which have not been disclosed as income in India by the foreign entities of the broadcaster.
The surveys at the Mumbai and Delhi offices of the British broadcaster ended on Thursday night after nearly 60 hours. The searches were conducted less than a month after the BBC released a two-part documentary that examined Prime Minister Narendra Modi’s alleged role in the 2002 riots in Gujarat, in which more than 1,000 people – most of them Muslims – were killed.
Several global media rights advocates and India’s opposition leaders have condemned the searches, saying the timing of the action just weeks after the documentary aired “smacked of intimidation”. On Thursday, the BBC said in a statement that it stands by its colleagues and journalists “who will continue to report without fear or favour”.
However, the government has maintained that there is no connection between the BBC documentary and the Income Tax surveys.
In its press release, the Central Board of Direct Taxes also said that the tax officials had found “several discrepancies and inconsistencies” in documents related to transfer pricing by the BBC.
Transfer pricing refers to the value attached to transfers of goods, services and technology between related entities, according to the Income Tax Department.
“The survey operation has resulted in the unearthing of crucial evidence by way of statement of employees, digital evidence and documents which will be further examined in due course,” the Central Board of Direct Taxes said.
It also added that during the survey, statements of employees who were associated with finance, content development and other production-related functions had been recorded.
“Even though the department exercised due care to record statements of only key personnel, it was observed that dilatory tactics were employed including in the context of producing documents/agreements sought,” the body alleged. “Despite such stance of the group [BBC], the survey operation was conducted in a manner so as to facilitate continued regular media/channel activity.”