Set Back to Indian National Congress: Delhi HC confirms Recovery of Outstanding Income Tax Demand Over Rs. 100 Crore

The Delhi High Court upheld the Income Tax Appellate Tribunal’s ( ITAT ) decision today, confirming the recovery of outstanding income taxes demand exceeding Rs. 100 crores for the assessment year 2018-19. The court refused to grant stay on recovery notice.  A division bench consisting of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav pronounced the verdict, stating, “We find no ground to interfere with the order.” The court, however, granted the Congress party the liberty to approach the ITAT again if there were any changes in circumstances. Senior Advocate Vivek Tankha represented the Indian National Congress, while Advocate Zoheb Hossain appeared for the income tax authorities. During the proceedings, the court remarked on the handling of the matter, noting that there appeared to be a lack of action from the Congress side since 2021, reported Livelaw.

The dispute arose from the denial of tax exemption claimed by Congress under Section 13A of the Income Tax Act,1961, based on the timing of their income declaration and receipt of donations exceeding the prescribed limit. The New Delhi Bench of ITAT ruled that ( ITR ) filing by due date under Section 139 of the Income Tax Act is mandatory for political parties to claim exemption under Section 13A of the Income Tax Act, 1961. The Two-Member Bench concluded that the income tax authorities did not err in denying the exemption claimed under Section 13A of the Income Tax Act. They found that the applicant failed to establish a strong prima facie case against the interpretation of Section 13A adopted by the Revenue.

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