Massive setback for Congress; HC dumps plea against income tax re-assessment for 2014-17
The Delhi High Court dismissed the Congress party's plea challenging the initiation of reassessment proceedings by the Income Tax department for the years 2014-15, 2015-16, and 2016-17. The court upheld the IT department's authority, citing substantial evidence of unaccounted transactions and disbursements
FollowThe Delhi High Court delivered its verdict on Friday, dismissing the plea filed by the Congress party challenging the initiation of reassessment proceedings by the Income Tax (IT) department. Justices Yashwant Varma and Purushaindra Kumar Kaurav, presiding over the bench, pronounced, "We dismiss the writ petitions."
Following a hearing on March 20, the high court reserved its order on the Congress' pleas against the tax reassessment proceedings for the assessment years 2014-15, 2015-16, and 2016-17. Senior advocate Abhishek Singhvi, representing the Congress party, argued that the tax reassessment proceedings were time-barred, contending that the IT department could only review assessments for a maximum of six years.
Contrarily, the IT department maintained that there was no breach of statutory provisions and cited material evidence suggesting an "escaped" income of over ₹520 crore by the party. The court's decision follows a recent press conference by the Congress, where they accused the Narendra Modi government of financially crippling the party in the lead-up to the Lok Sabha elections.
The court emphasized that while it sees no grounds to interfere with the assessment proceedings at this late stage, it remains open to the question of whether the delay in commencing the proceedings would impact the assessment itself. Additionally, the bench acknowledged the income tax authorities' gathering of substantial evidence, warranting further scrutiny of Congress' income under the Income Tax Act.
The evidence presented includes detailed references to unaccounted transactions related to the 2019 Lok Sabha Elections and the 2018 and 2013 Madhya Pradesh Assembly Elections. Moreover, the material suggests disbursements made to candidates participating in upcoming elections, alongside payments allegedly made to MPs, MLAs, and candidates.
The court noted that the assessment period must be completed by March 31, 2024, considering the date of satisfaction as the starting point for the reckoning of this period. The verdict was reserved on March 20, with Senior Advocate Abhishek Manu Singhvi and Advocate Zoheb Hossain presenting arguments for the tax authorities and the Indian National Congress, respectively.
Singhvi argued that the tax authorities' actions were time-barred, citing a limitation of six assessment years. Responding to the court's inquiry regarding the alleged escaped income by Congress, Hossain indicated an amount of approximately Rs 520 crore based on seized material.
Additionally, Congress has filed fresh pleas contesting tax re-assessment for four other years, yet to be listed before the High Court. Previously, the court upheld an ITAT order, refusing to stay a demand notice for recovery of outstanding tax exceeding Rs 100 crore for the assessment year 2018-19. However, Congress was granted liberty to submit a fresh application for stay before the ITAT, considering recent developments, including the recovery of Rs. 65.94 crores by tax authorities through bank draft encashment.
