Delhi HC rejects Congress plea in tax penalty case
The Delhi High Court on Wednesday rejected the Congress's plea to halt the income tax demand notice for the recovery of Rs. 105 crore in outstanding taxes. The decision comes days after the Income Tax Appellate Tribunal (ITAT) denied the party's application for a stay on the Income Tax Department's February 13 notice, which initiated recovery proceedings. Justice Yashwant Varma, who led the high court bench, found no reason to intervene in the order.
Why does this story matter?
The charge against Congress is that it failed to pay income tax dues for the assessment year 2018-19. Initial dues were Rs. 103 crore, with Rs. 32 crore in interest for late payment. In 2021, the dues were reassessed at Rs. 105 crore. Congress then appealed to the Commissioner of Appeals but did not pay the mandatory 20% tax. As the case progressed, the party made some payments but didn't contest the amount of tax owed.
What did HC bench rule
The bench comprising Justice Varma and Justice Purushaindra Kumar Kaurav said, "While we find no ground to interfere with the order impugned, we dispose of the writ petition." The court also granted permission to the Congress to approach the ITAT again by way of a fresh stay application. It also suggested the petitioner detail its appeal before the tribunal with all the changes in circumstances noticed by it in the HC.
I-T department seized Congress's 4 main bank accounts
On February 16, the department seized the party's four main bank accounts. At the time, the Congress alleged that the department had frozen Rs. 115 crore in its bank accounts following a tax demand of Rs. 210 crore as dues and penalties for the assessment year 2018-19. While there was no official comment from the I-T department regarding its action, reports stated that "it was a routine process against anyone who has not paid income tax dues for years."
'Rs. 65 crore removed from party's accounts'
Days later, Congress Treasurer Ajay Maken claimed that the department had removed Rs. 65 crore from three of the party's accounts, despite the ITAT hearing a petition challenging the claim. Calling the action "undemocratic," Maken questioned, "Does the BJP pay Income Tax? No. Why...is the Congress facing...demand of Rs. 210 crores?" Maken said the funds were generated through grassroots efforts, including crowd financing and membership drives by the Indian Youth Congress and the National Students' Union of India.
