Major financial blow to Congress as tribunal rejects appeal against Rs 199 crore tax demand
The Congress had appealed against an income tax demand related to the financial year 2017–18. The party filed its return on February 2, 2019 -- well beyond the due date of December 31, 2018 -- and declared nil income after claiming an exemption of Rs 199.15 crore under Section 13A of the Income Tax Act.
New Delhi: In a major financial blow to the Congress party, the Income Tax Appellate Tribunal (ITAT) on Tuesday rejected its appeal against an income tax demand of Rs 199.15 crore, ruling that the party was ineligible for tax exemption due to late filing of returns and violations of cash donation limits prescribed under the Income Tax Act.
"We thus conclude that the assessee’s return filed on 02.02.2019 is not within the 'due' date to make it eligible for the impugned exemption," the ITAT said.
Congress' appeal against income tax demand
The Congress had appealed against an income tax demand related to the financial year 2017–18. The party filed its return on February 2, 2019 -- well beyond the due date of December 31, 2018 -- and declared nil income after claiming an exemption of Rs 199.15 crore under Section 13A of the Income Tax Act.
The ITAT ruled that the late filing made the party ineligible for the exemption. Upon scrutiny, it was also found that the party had received Rs 14.49 lakh in cash donations, violating the limit of Rs 2,000 per donor imposed by the Finance Act, 2017.
Assessment history
The party had reported total receipts of Rs 199.15 crore and expenditure of Rs 197.43 crore, resulting in a surplus of Rs 1.71 crore.
The Income Tax Department passed its assessment order on July 6, 2021, denying the exemption. The Commissioner of Income Tax (Appeals) upheld the order on March 28, 2023. The Congress then approached the ITAT, which has now rejected the plea.