Fresh tax demand likely on ‘unaccounted’ Rs 520 cr by IT Department for More trouble for Congress

The Income Tax department may make a fresh tax demand from Congress on ‘unaccounted transactions’ worth Rs 523-plus crore between 2014-2021, The Indian Express reported on Wednesday. The grand old party is already facing a tax demand of Rs 135 crore, which has been frozen in its bank accounts by the tax department.     

In its order dated March 22, the HC rejected Congress’ petition challenging the tax re-assessment proceedings for three consecutive years from 2014 to 2017 initiated against the party by the Income Tax Department. 

The court said there was a specific reference to unaccounted transactions pertaining to AYs (assessment years) 2014-15, 2015-16, and 2016-17. “The chart correlates with the material which stands noticed and forms part of the Satisfaction Note. More importantly, the amounts identified as relevant to the AYs‘ in question ex facie meet the prerequisites set out in the Fourth Proviso to Section 153A. We also take into consideration the indubitable fact that the cumulative figure attributed to income which has allegedly escaped assessment would stand at approximately INR 520 crores.” 

The Congress had contested the re-assessment proceedings, claiming the tax department was “barred by limitation” as they could have gone back to a maximum of six assessment years. The tax department, however, stated that there was no violation of any statutory provision by the tax authority. It also said that as per the materials seized, the alleged ‘escaped’ income by the Congress is over Rs 520 crore.

Earlier this month, the Delhi HC upheld the Income Tax Appellate Tribunal (ITAT) order, rejecting Congress’s application for a stay on a tax department notice for recovery of dues of more than Rs 100 crore. “We find no ground to interfere with the (impugned) order,” a division bench said.

Last week, the Congress attacked the Centre for I-T dept’s actions against the party and its bank accounts. Former party chief Rahul Gandhi said all party bank accounts had been frozen. “We can do no campaign work, we cannot support our workers, we cannot support our candidates. Our leaders cannot travel from one part of the country to the other. We’re unable to put out our ads,” he at a press conference along with Sonia Gandhi and Mallikarjun Kharge.

Recently, the Congress suffered a setback when the Delhi High Court noted that the tax department appeared to have “substantial and concrete evidence” regarding unaccounted transactions worth Rs 520 crore involving the party. These transactions were largely made during the Lok Sabha elections in 2019 and the Madhya Pradesh assembly elections in 2013 and 2018. 

The dubious transactions of Rs 523.87 crore were detected during I-T raids conducted prior to the 2019 Lok Sabha elections.

Congress Rajya Sabha MP V K Tankha, who is a senior lawyer, told the national daily that the party apprehended that a hefty penalty and interest would now be added to the Rs 523.87 crore for calculation of fresh tax demand. “Not satisfied with crippling us by withdrawing the lien amount of Rs 135 crore on the eve of general elections, a bigger setback is expected, thus crippling us further. But what is left to cripple?” Tankha told The Indian Express.

(This story has not been edited by News Mania staff and is published from a Syndicate Feeds)