Congress receives Rs 1700 crore Income Tax notice ahead of 2024 Lok Sabha Elections
The Income Tax department has served Congress party with a notice of approximately Rs 1,700 crore, including penalty and interest, for the assessment years 2017-18 to 2020-21. This notice compounds the party's financial worries, particularly as the crucial 2024 Lok Sabha elections approach
FollowThe Congress party's financial concerns have risen further after the Income Tax department issued a notice of Rs 1,700 crore to the Grand Old Party ahead of the 2024 Lok Sabha elections. The notice, encompassing penalty and interest, spans the assessment years from 2017-18 to 2020-21. This move follows the Delhi High Court's dismissal of the party's petition contesting the reassessment proceedings for four consecutive assessment years.
Congress spokespersons disclosed the issuance of the fresh demand, underscoring the party's distress at the eleventh hour before the crucial national elections. Vivek Tankha, a prominent lawyer and Rajya Sabha MP representing Congress confirmed the receipt of the notices and affirmed the party's intention to pursue legal recourse. Tankha criticized the Income Tax Department's actions as undemocratic and unreasonable.
Tankha further criticized the tax department's handling of the situation, alleging that the notice arrived without essential accompanying documents, particularly assessment orders. He portrayed the move as a financial strangulation of the principal opposition party, particularly untimely given the electoral context.
Earlier, the tax department had already recovered Rs 135 crore from Congress's bank accounts in Delhi, pertaining to tax arrears and interests for the assessment year 2018-19, during which the party was denied exemption due to non-compliance with prescribed conditions.
The Delhi High Court, comprising Justices Yashwant Varma and Purushaindra Kumar Kaurav, declined to intervene in the reassessment proceedings for the period encompassing the years 2017-18 to 2020-21. The bench cited its previous decision and its relevance to the present petition. Notably, the court had previously ruled in favour of the tax department in cases related to assessment years 2014-15 to 2016-17, citing substantial evidence warranting further scrutiny.
The tax department's evidence collection during raids on various entities, including Megha Engineering and aides of former Madhya Pradesh Chief Minister Kamal Nath, allegedly revealed significant cash transactions amounting to over Rs 520 crore, which the court found compelling.
Additionally, the tax department pointed out cash transactions involving Congress during searches on entities allegedly linked to Karnataka Deputy Chief Minister D K Shivakumar and a company in Surat. These transactions were cited as violations impeding the party's eligibility for tax exemption, categorizing them instead as an "association of persons" subject to taxation.
In light of the absence of exemption, political parties such as Congress are obliged to pay taxes on their income and face additional taxation on cash transactions. The latest notice from the Income Tax department has added further strain to Congress's financial predicament, setting a challenging backdrop as the country gears up for pivotal national elections.
