‘Petitioner itself to blame’: Delhi HC rejects Congress’ plea seeking stay on recovery of Rs 105 crore I-T dues

In a setback to the Congress, the Delhi High Court on Wednesday rejected the party’s plea seeking a stay on an order of the Income Tax Appellate Tribunal that denied relief on a demand notice for recovery of Rs 105 crore in Income Tax dues.

A division bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav said there was no reason to interfere with the ITAT order. The total amount due with interest stands at around Rs 135 crore.

The bench noting that proceedings against the party began in 2021 and that someone in the Congress office “went to sleep”. The bench remarked that the entire matter had been handled very poorly by the party.

“As we read this order (ITAT order), the petitioner has itself to blame. The demand is of 2021…It seems you made no efforts to securitise the demand…Someone in petitioner’s office has remained asleep since 2021,” it added.

The demand for outstanding tax dues against the Congress date back to the 2018-2019 Assessment Year. In July 2021, Income Tax authorities had rejected the Congress’ declaration of nil income and issued a demand for Rs 105 crore.

The I-T department said that the return had been filed beyond the prescribed time period and that the party received “donations” of Rs 14,49,000 from various persons, each being in excess of Rs 2,000 and in violation of Section 13A of the Income Tax Act.

The I-T department’s proceedings were challenged in the ITAT where Congress alegged 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 and ordered on March 8 that the party was required to furnish its return of income by due date.

This was followed by the Congress’ petition in nthe High Court which was rejected today. On March 12, the bench observed that this was a spectre created in 2021 and that merely because someone woke up in February 2024, it would not change anything.