Fresh setback for Congress as it receives ₹1,700 Crore I-T notice ahead of Lok Sabha elections
- In Reports
- 01:09 PM, Mar 29, 2024
- Myind Staff
The Income Tax department has issued a notice of around Rs 1,700 crore to the Congress party, worsening its financial worries in anticipation of the pivotal 2024 Lok Sabha elections.
The development follows the rejection by the Delhi High Court of the party's plea challenging reassessment proceedings for four assessment years.
The new demand relates to assessment years 2017-18 to 2020-21 and encompasses penalties and interest. According to a report by TOI, the Congress party is now awaiting reassessment for three other assessment years, which is expected to be completed by the stipulated deadline.
Congress lawyer and Rajya Sabha MP Vivek Tankha claimed that the party received the fresh notice of nearly Rs 1,700 crore without essential accompanying documents.
Tankha asserted, "The government seemed more inclined to issue a demand notice rather than provide us with reasons for reassessment," as quoted by TOI. He added, "This illustrates how the main opposition party is being financially suffocated, especially during the Lok Sabha elections."
The Delhi High Court dismissed petitions filed by the Congress challenging the commencement of tax reassessment proceedings spanning four years by tax authorities. Justices Yashwant Varma and Purushaindra Kumar Kaurav, who formed the bench, stated that they rejected the pleas in accordance with their previous decision to refrain from intervening in the reopening of reassessment for an additional year.
The case revolved around assessment years from 2017 to 2021. In a previous petition dismissed the week before, the Congress party had challenged the commencement of reassessment proceedings relating to assessment years 2014-15 to 2016-17.
The High Court dismissed the plea, stating that the tax authority had prima facie collected "substantial and concrete" evidence necessitating further examination. The tax department accused that approximately Rs 520 crore had evaded assessment during these three years.
Furthermore, the department disclosed that searches carried out on entities, including those allegedly associated with Karnataka deputy chief minister D K Shivakumar and a Surat-based company, had revealed cash transactions involving the Congress. These transactions were cited as violations, rendering the party ineligible for the tax exemption granted to political parties.
In the absence of exemption, parties are considered as "association of persons" and are required to pay taxes on their reported income. Furthermore, the cash transactions are incorporated into their total income.
Image source: Hindustan Times
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