- The Delhi High Court has upheld the Income Tax Appellate Tribunal’s decision to dismiss the Congress party’s appeal for a stay on a demand notice issued by the income tax department.
- The demand notice seeks to recover ₹105 crore in outstanding taxes from the Congress party, a ruling that could have profound financial implications for the organization.
- The tax demand stems from an assessment for the financial year 2018-19, during which the party’s income was assessed at over ₹199 crore.
- Initially, the income tax department seized four main bank accounts of the Congress party in February, citing a demand of ₹210 crore for the same assessment year.
- The Delhi High Court’s ruling underscores the importance of compliance with tax regulations and the consequences of non-payment.
In a significant setback for the Indian National Congress, the Delhi High Court has upheld the Income Tax Appellate Tribunal’s decision to dismiss the party’s appeal for a stay on a demand notice issued by the income tax department. The demand notice seeks to recover ₹105 crore in outstanding taxes from the Congress party, a ruling that could have profound financial implications for the organization.
The Congress party’s legal battle began when the Income Tax Appellate Tribunal rejected its application for a stay on the income tax department’s notice, issued on February 13, 2018, initiating recovery proceedings. The tax demand stems from an assessment for the financial year 2018-19, during which the party’s income was assessed at over ₹199 crore.
Initially, the income tax department seized four main bank accounts of the Congress party in February, citing a demand of ₹210 crore for the same assessment year. This move prompted Congress to seek relief from the tribunal, arguing that the freezing of its accounts would impair its ability to meet financial obligations, including bills and salaries.
Despite the Congress’s efforts to challenge the tax demand, the Delhi High Court, led by Justice Yashwant Varma, refused to intervene, stating, “Accordingly, we find no ground to interfere in the order impugned.” This decision reinforces the income tax department’s authority to pursue recovery proceedings against the party.
The dispute over tax dues traces back to July 6, 2021, when the initial tax demand of ₹103 crore was reassessed and increased to ₹105 crore, with an additional ₹32 crore added on account of interest. Despite appeals before the Commissioner, Appeals, Congress failed to comply with the requirement of paying 20% of the tax due to initiate the appeal process fully. Consequently, the Commissioner dismissed the plea.
Undeterred, the Congress pursued further legal recourse, submitting another appeal in May 2023 and eventually paying ₹1.72 crore in October of the same year. However, this payment fell short of the required amount, highlighting the ongoing challenges faced by the party in resolving its tax liabilities.
The Delhi High Court’s ruling underscores the importance of compliance with tax regulations and the consequences of non-payment. For the Congress party, the dismissal of its plea for tax relief signals a pressing need to address its financial obligations and navigate the legal complexities surrounding its tax liabilities.
(With inputs from agencies)
