Recoveries have been made against the entire outstanding demand of Rs 135 crore for the assessment year 2018–19, which resulted from late return filing and noncompliance with certain Income Tax Act provisions by Congress.
According to sources, the income tax department has so far been able to retrieve about Rs 115 crore of dues from the bank accounts of the Indian National Congress (INC) against the total outstanding demand of Rs 135 crore for the assessment year 2018–19. This demand stems from the non-compliance of specific Act sections and the late filing of returns.
Currently, money has been taken out of several INC bank accounts totaling Rs 115 crore in recovery. The IT Department informed the Income Tax Appellate Tribunal (ITAT) during proceedings on February 16, 2024, that the recovery of funds from accounts is a standard recovery measure.
Sources clarified, nevertheless, that INC’s accounts are still active and operational. The ITAT noted that INC has a great deal more accounts for its operations.
Income Tax Appellate Tribunal has now scheduled the hearing for February 21, 2024.
For the assessment year 2018–19, the demand of Rs 135 crore against INC includes interest of about Rs 32 crore and Rs 103 crore for assessment. The evaluation was conducted on INC’s Rs 199 crore in revenue for the year.
On July 6, 2021, the scrutiny assessment under Section 143(3) of the IT Act—which involved a thorough review of INC’s return to verify a number of claims and deductions—was finished. The Section 13A exemption was not granted in the assessment. Section 13A exempts from taxation any income received by a political party from capital gains, real estate, and other sources.
Due to late filing of the return and non-compliance with Section 13A(d) of the Income Tax Act, which states that any income a political party receives from voluntary contributions or any interest, dividend, or rent from its assets is not included in the party’s total income for taxation, the assessment by the income tax department disallowed INC’s exemption.
Following that, INC was asked to pay 20% of the entire demand, or Rs 21 crore, in stay proceedings before the Assessing Officer. However, INC only contributed Rs 78 lakh, and a tax demand was then made for the remaining amount.
In May 2023, the Indian National Congress filed an appeal with the ITAT.
About Rs 37.5 crore of the Rs 115 crore that the income tax department has recovered so far comes from its Bank of Baroda account, while the remaining Rs 22 crore, Rs 55 crore, Rs 74 lakh, and Rs 7 lakh come from Union Bank, State Bank of India, and Canara Bank. According to sources, all of these recoveries took place between February 13 and 15, 2024.
The Income Tax Appellate Tribunal made it clear that the Congress party was not restricted from accessing its bank accounts in response to Congress Treasurer Ajay Maken’s claim that the party’s bank accounts were frozen. Representing the Congress party before the Delhi tribunal bench was Rajya Sabha MP and attorney Vivek Tankha, who contended that the party’s participation in the forthcoming Lok Sabha elections would be impeded by the frozen accounts.
We found out yesterday that the checks we are writing are not being honored by the banks. We discovered after conducting additional research that the bank accounts of the Youth Congress have been frozen. Additionally, the Congress party’s accounts have been taken. Income Tax demanded a recovery of ₹210 crore from the Congress and the Youth Congress. Our accounts’ funds, which were obtained through crowdsourcing, have been placed on hold. It’s like freezing democracy to freeze an opposition party’s accounts just weeks before the Lok Sabha elections are announced, Maken continued.
