Congress Faces Uphill Battle Over Rs 199 Crore Tax Demand

The Congress party’s appeal against a substantial income tax demand of Rs 199 crore has been dismissed by the Income Tax Appellate Tribunal (ITAT). This decision marks a significant setback for the party, which has been embroiled in this tax dispute since the 2018-19 fiscal year. The ITAT’s ruling underscores the importance of adhering to tax regulations and deadlines, as the Congress party’s late filing and cash donation violations played a pivotal role in the tribunal’s decision.

Late Filing and Cash Donation Violations

The crux of the issue lies in the Congress party’s delayed filing of its income tax return. The party submitted its return on February 2, 2019, well past the December 31, 2018 deadline. In this return, Congress declared nil income while claiming an exemption of Rs 199.15 crore. However, during a scrutiny process in September 2019, the Assessing Officer discovered that the party had accepted cash donations totaling Rs 14.49 lakh. Many of these donations exceeded the legal limit of Rs 2,000 per donor, which mandates that amounts above this threshold must be transacted through banking channels such as cheques or bank transfers.

Tax Authorities Deny Exemption Claim

Due to these discrepancies, tax was levied on the entire amount claimed by Congress. The party’s subsequent request for exemption was denied by the Income Tax Department in 2021. This decision was later upheld by the Commissioner of Income Tax (Appeals) in March 2023, further complicating Congress’s efforts to secure relief.

Appellate Tribunal’s Final Verdict

In a bid to overturn these decisions, Congress approached the Appellate Tribunal seeking interim relief. However, their plea was rejected last year, and now with the tribunal’s latest ruling, it appears that Congress will have to comply with the tax demand. This case highlights the critical need for political entities to maintain transparency and compliance with financial regulations to avoid such legal entanglements.