In a major setback for Congress president Sonia Gandhi and her son Rahul, the Delhi High Court cleared an Income Tax Department investigation in the National Herald case.

"We are not inclined to entertain your writ petition. It is better you withdraw it and approach the income tax assessing officer," a bench of Justices S Muralidhar and Chander Shekhar said.

In 2012, BJP MP Subramanian Swamy filed a private criminal complaint accusing the Gandhis and others of conspiring to cheat and misappropriate funds by paying just Rs 50 lakh to acquire a company worth more than Rs 2,000 crore. 

During the hearing on Friday, the court said that the company has not moved the assessing officer raising its grievances, so it should first approach the IT department and submit its documents. In case it is still not satisfied, the company can move the court thereafter, the bench added.

Sensing the mood of the bench, senior advocate Abhishek Manu Singhvi, appearing for the firm, withdrew the petition which was allowed by the court that termed it "dismissed as withdrawn".

Young Indian (YI) had approached the high court seeking a direction to stay the IT proceedings and quashing of re- assessment notices issued against it with regard to the National Herald misappropriation of assets case. The company was issued notices regarding the assessment year 2011-12.

The counsel for the Income Tax Department opposed the petition, saying the firm has not moved the assessing officer and hence its plea was not maintainable.

BJP MP Subramanian Swamy had accused that the Gandhis and others conspired to cheat and misappropriate funds by paying just Rs 50 lakh, through which YI had obtained the right to recover Rs 90.25 crore which the Associate Journals Limited (AJL) owed to the Congress party.

The Gandhis and other accused -- Motilal Vora, Oscar Fernandes, Suman Dubey and Sam Pitroda -- have denied the allegations levelled against them. The trial court had summoned them as accused persons, besides Young India on June 26, 2014.

On December 7, 2015 the high court had rejected their pleas for quashing the summons issued against them by the trial court in the case.

On December 19, 2015, it had granted bail to Sonia, Rahul, Vora, Fernandes and Dubey, who had appeared before it pursuant to summons. Pitroda was granted bail on February 20, 2016 when he had appeared in the court.

The Congress President and the Vice President, Vora (AICC treasurer), Fernandes (AICC general secretary), Dubey and Pitroda were summoned for the alleged offences of dishonest misappropriation of property, criminal breach of trust and cheating read with criminal conspiracy of the IPC.

The IT departments move to issue notices followed its probe on Swamys complaint alleging that the Gandhis had misappropriated AJLs assets while transferring their shares to the newly formed Young India.

According to IT records, 83.3 per cent of Young Indian was held by Sonia and Rahul, 15.5 per cent by Vohra and the remaining 1.2 per cent by Fernandes.