NEW DELHI: The Income Tax department has served a notice of around Rs 1,700 crore on Congress party, compounding its financial worries at the stroke of the crucial 2024 Lok Sabha elections, the party claimed hours after Delhi high court turned down its petition challenging the reassessment proceedings for four assessment years.
The fresh demand is for assessment years 2017-18 to 2020-21, and includes penalty and interest.The party now awaits reassessment of its income for three other assessment years, to be completed by Sunday, the cut-off date.
Congress lawyer and Rajya Sabha MP Vivek Tankha, who argued the case in HC seeking stay on the action, confirmed the notices, and said the party will take the legal challenge further as he dubbed the I-T move undemocratic and unreasonable.
Served I-T notice sans key documents: Congress
RS MP and Congress lawyer Vivek Tankha alleged that the fresh I-T notice of nearly Rs 1,700 crore was served on the party on Thursday without key accompanying documents.
“We received the demand notice without assessment orders. The govt appeared keener to serve us with demand rather than issue us reasons for reassessment,” he said, adding, “this is how the main opposition party is being strangled financially, and that too during the Lok Sabha elections”.
The tax department has recovered Rs 135 crore from Congress’s bank accounts in Delhi towards tax arrears and interests for assessment year 2018-19 when the party was denied exemption for failure to meet the prescribed conditions.
On Thursday, a bench of Delhi HC Justices Yashwant Varma and Purushaindra Kumar Kaurav cited its earlier decision and refused to interfere with the opening of reassessment proceedings for another period. The bench said the reasoning given in the earlier verdict will also apply to the latest petition related to assessment years 2017-18 to 2020-21 (financial years 2016-17 to 2019-20).
For three earlier years, the tax department had submitted a detailed list of evidence collected during raids on certain entities, including Megha Engineering of the electoral bond fame and aides of former MP chief minister Kamal Nath, allegedly pointing to cash transactions, which the court relied upon. In these cases, the department had told the court that over Rs 520 crore had escaped assessment.
In its earlier petition heard last week, Congress had challenged initiation of reassessment proceedings for assessment years 2014-15 to 2016-17. HC had rejected the plea noting that the tax authority had prima facie collated “substantial and concrete” evidence warranting further scrutiny and examination. The tax department had argued that around Rs 520 crore had allegedly escaped assessment during these three years.
The department has said that searches on entities including some allegedly linked to Karnataka deputy chief minister D K Shivakumar and a company in Surat had also revealed cash transactions involving Congress, and cited it as one of the violations to allow tax exemption available to political parties.
In the absence of an exemption, the parties are treated as “association of persons” and have to pay tax on the income that they have filed. Besides, the cash transactions will get added to their income.’
The fresh demand is for assessment years 2017-18 to 2020-21, and includes penalty and interest.The party now awaits reassessment of its income for three other assessment years, to be completed by Sunday, the cut-off date.
Congress lawyer and Rajya Sabha MP Vivek Tankha, who argued the case in HC seeking stay on the action, confirmed the notices, and said the party will take the legal challenge further as he dubbed the I-T move undemocratic and unreasonable.
Served I-T notice sans key documents: Congress
RS MP and Congress lawyer Vivek Tankha alleged that the fresh I-T notice of nearly Rs 1,700 crore was served on the party on Thursday without key accompanying documents.
“We received the demand notice without assessment orders. The govt appeared keener to serve us with demand rather than issue us reasons for reassessment,” he said, adding, “this is how the main opposition party is being strangled financially, and that too during the Lok Sabha elections”.
The tax department has recovered Rs 135 crore from Congress’s bank accounts in Delhi towards tax arrears and interests for assessment year 2018-19 when the party was denied exemption for failure to meet the prescribed conditions.
On Thursday, a bench of Delhi HC Justices Yashwant Varma and Purushaindra Kumar Kaurav cited its earlier decision and refused to interfere with the opening of reassessment proceedings for another period. The bench said the reasoning given in the earlier verdict will also apply to the latest petition related to assessment years 2017-18 to 2020-21 (financial years 2016-17 to 2019-20).
For three earlier years, the tax department had submitted a detailed list of evidence collected during raids on certain entities, including Megha Engineering of the electoral bond fame and aides of former MP chief minister Kamal Nath, allegedly pointing to cash transactions, which the court relied upon. In these cases, the department had told the court that over Rs 520 crore had escaped assessment.
In its earlier petition heard last week, Congress had challenged initiation of reassessment proceedings for assessment years 2014-15 to 2016-17. HC had rejected the plea noting that the tax authority had prima facie collated “substantial and concrete” evidence warranting further scrutiny and examination. The tax department had argued that around Rs 520 crore had allegedly escaped assessment during these three years.
The department has said that searches on entities including some allegedly linked to Karnataka deputy chief minister D K Shivakumar and a company in Surat had also revealed cash transactions involving Congress, and cited it as one of the violations to allow tax exemption available to political parties.
In the absence of an exemption, the parties are treated as “association of persons” and have to pay tax on the income that they have filed. Besides, the cash transactions will get added to their income.’
