NEW DELHI: After an income tax demand of Rs 1,823 crore as of Friday, Congress received three more notices Saturday, taking the total demand on the party to Rs 3,567 crore, an “astronomical figure” that is bound to complicate the party’s political operations during the Lok Sabha elections.
The latest demands of over Rs 1,744 crore pertain to 2014-15 (Rs 663.05 crore), 2015-16 (Rs 663.89 crore) and 2016-17 (Rs 417.31). The total demand is more than two-and-a-half times the cash and assets disclosed – over Rs 1,385 crore – by the party at the end of March 2023.
In a sign of the urgency in the opposition party, Congress has approached Supreme Court against a Rs 135 crore recovery notice issued by income tax dept, and sought to club the matter with a special leave petition filed in 2016, which relates to a 1994-95 case in which the department recently raised a Rs 53 crore demand.
I-T dept is likely to contest the clubbing of the cases when it comes up for hearing Monday, arguing the two are separate and Congress has jumped the queue and not gone to commissioner (appeals).
Tax demands of Rs 3,567cr in 3 days ‘brazenly compromised’ to target BJP’s rival: Congress
In the earlier special leave petition (SLP) filed in SC, the original demand was around Rs 26 crore, which was reduced to Rs 11-12 crore during the appeals stage, which has now crossed the Rs 50 crore mark after adding interest.
“This is height of insanity. A demand of tax on Congress of an astronomical figure of Rs 3,567.3 crore in last 3 days. This is in addition to Rs 135 crore already recovered from Congress bank accounts recently. BJP must thank and felicitate select officers of the revenue dept for their studious & loyal adherence to the BJP mission of ‘Congress Mukt Bharat’,” Congress MP and lawyer Vivek Tankha said.
Calling the I-T demands as “brazenly compromised” to target a political rival of BJP, he said tax has been levied on “third-party entries” of some diaries seized during so-called raids, while similar entries in Birla-Sahara diaries featuring the names of PM Modi and former MP CM Shivraj Chauhan were not recognised as valid entries. “It is a case of targeting Congress party on the eve of elections. Where is the level playing field for opposition parties? It raises questions of fairness on the present election process,” Tankha said.
The demand for assessment year 1994-95 was raised as the exemption available to political parties under Section 13(A) of the Income Tax Act had been cancelled by the department, like the Rs 135 crore case relating to assessment year 2018-19. In 2018-19, Congress party had not only failed to file the return by the extended deadline of Dec 2018, but the tax department has argued that there were cash donations of over Rs 2,000, which is not permitted under law.
In the latest set of notices following reassessment of income for seven years (assessment years 2014-15 to 2020-21), the demand includes tax & interest, govt sources explained.
Apart from evidence of widespread use of cash receipts and payments, something that was found during raids in MP, Gujarat, Karnataka and Andhra Pradesh, there were multiple sets of documents and electronic evidence that the I-T authorities have relied upon during the reassessment proceedings. “In one of the cases, the department had information of cash being present in a location, which was found to be true as Rs 10 crore was recovered,” a source said.
Delhi HC had dismissed writ petitions against the reassessment action, taking note of seizures during tax searches.
