The Income Tax Appellate Tribunal (ITAT) on Friday dismissed an application filed by the Congress party, challenging the Income Tax department notice seeking recovery of more than Rs 105 crore as outstanding tax for the assessment year 2018-19.
The order was passed by the Delhi Bench of Vice President GS Pannu and Judicial Member Anubhav Sharma.
The Bench observed that the IT authorities had not made any error in denying the income tax exemption claimed by Congress, adding that the political party was unable to make out a strong prima facie case against the denial of exemption.
On July 6, 2021, the IT authorities had rejected the declaration of Nil income by the Congress and demanded over Rs 105 crore as tax on the grounds that the return had been filed beyond the prescribed period.
The IT department further said that the political party had received donations of Rs 14,49,000 in cash from various persons, each in excess of Rs 2,000.
This was stated to be in violation of Section 13A of the Income Tax Act, which allowed a political party to claim exemption from tax in certain cases.
Before the ITAT, the Congress alleged that recovery proceedings initiated on February 13 were aimed at creating hardships for the party in view of the forthcoming parliamentary elections.
However, the IT authorities objected to the motive being attributed to the Assessing Officer and submitted that the proceedings have been pending since July 2021.
In the order passed today, the ITAT said the aspect was “quite subjective” and it considered the matter only on merits.