Congress Moves Delhi High Court Against ITAT Order Refusing Stay On Recovery Of Outstanding Tax

Indian National Congress has moved the Delhi High Court challenging an order passed by the Income Tax Appellate Tribunal (ITAT) on March 08 dismissing its plea seeking stay on the recovery of outstanding tax for the assessment year 2018-19.

Senior Advocate Vivek Tankha mentioned the matter before Acting Chief Justice Manmohan and Justice Tushar Rao Gedela which allowed urgent listing of the matter for today.

“This is a slightly urgent matter. This is a petition moved by Indian National Congress against ITAT order by which they have frozen our accounts and we have an appeal pending, we moved a stay application,” Tankha said.

About Impugned Order

The assessment of Congress party was completed at an income of Rs.1,99,15,26,560 against nil income declared in its return, thereby resulting in demand of Rs.105,17,29,635.

The difference between the returned and assessed income was solely on account of Congress' claim for exemption under Section 13A of the Income Tax Act, which was denied by the Assessing Officer.

The exemption was denied on two grounds, that the return of income filed by the political party on February 02, 2019, contravened the time limit prescribed and

that clause (d) of the first Proviso to Section 13A was violated since Congress had received donations of Rs.14,49,000 in cash from various persons, which was in excess of Rs.2,000.

Congress thus prayed before the ITAT that pending disposal of its appeal, the recovery of tax demand arising on account of the assessment order dated July 06, 2021, be stayed.

The ITAT dismissed Congress' plea for stay and observed that once the mandatory requirements contained in Section 13A are violated, there is no discretion with the income tax authorities to give any relaxation in allowing the exemption envisaged in the said provision.

It further said that the authorities did not make any error in denying the income tax exemption claimed by the Congress party and that no prima facie case was made against denial for the said exemption.

“The chronology of events, which have been canvassed before us starting from the passing of the assessment order on 6th July, 2021 and culminating with the issuance of notice under section 226(3) of the Act on 13th February, 2024, in our view, does not justify an inference that the recovery proceedings have been done in an undue haste,” the Tribunal had said.