The IT department had issued notice to the Congress party for recovery of ₹105 crore in outstanding tax for the assessment year 2018-19.
The IT authorities had in July 2021 rejected the declaration of nil income by the Congress and demanded over ₹105 crore in tax.
The demand was raised on the ground that the return had been filed beyond the prescribed time period and also that the party has received “donations” of ₹14,49,000 from various persons, each being in excess of ₹2,000.
This was stated to be in violation of Section 13A of the Income Tax Act, which allows a political party to claim exemption from tax in certain cases.
The Congress challenged the IT department’s the proceedings before the ITAT, alleging that recovery proceedings initiated on February 13 were aimed at creating hardships to the party in view of the upcoming parliamentary elections.
In an order passed on March 8, 2024, the ITAT ruled that the IT authorities had not made any error in denying the income tax exemption claimed by the Congress.
It further said that Congress was unable to make out a strong prima facie case against such a denial of exemption by the IT authorities.
In a detailed judgement passed on March 8, the ITAT opined that Congress was required to furnish its return of income by ‘due date’.
This led to the present plea before the High Court.
Source: Barandbench
