The cash-strapped Congress is facing further difficulties as the Income Tax Department, on 30th March, sent new notices for the assessment years 2014–15 to 2016–17 and asked for pending payments of Rs 1,745 crore. The total demand by the IT department has increased to Rs 3,567 crore after these notices were added with the notice for the assessment years 1994–1995, and 2017–18 to 2020–21.
The new notifications for the assessment years 2014–15 to 2016–17 were received on the evening of 30th March. The new tax notifications, based on sources, are related to 2014–15 (around Rs 663 crore), 2015–16 (approximately Rs 664 crore), and 2016–17 (about Rs 417 crore). They added that political parties are no longer eligible for tax exemptions from the government and are now subject to full collection of taxes.
The sources revealed that “third-party entries” recorded in diaries, taken from some of the Congress’ leaders by investigation agencies during searches, have also been levied against the party. The main opposition party announced on 29th March that the IT department issued letters demanding payment of approximately Rs 1,823 crore. A tax claim for prior years has already resulted in the tax authorities taking out Rs 135 crore from the party’s coffers.
The Congress party reported that the Income Tax department had delivered notifications for five years (Assessment Year 1994-95 and AYs 2017-18 to 2020-21) asking for Rs 1,823 crore. According to media sources, the grand old party has a net worth of over Rs 1,430 crore. In addition, the IT Department handed Congress a notice for Rs 1,800 crore, which included interest and penalties for the fiscal years 2017–18 through 2020–21. This development transpired following the Delhi High Court’s denial of the Congress’ appeals against the department’s tax reassessment procedures.
The Delhi High Court’s bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav stated that the pleas were turned down in accordance with their previous ruling that they would not tamper with the reassessment’s opening for an additional year.
The party had lost a case challenging the IT department’s raids in the Delhi High Court on 22nd March.
Additionally, the Congress party disclosed a total corpus of Rs 657 crore, net assets of around Rs 340 crore and cash equivalents of about Rs 388 crore for a total estimated value of Rs 1,430 crore in its most recent income tax return for AY 2023–2024. The move was prompted by the IT Department’s assertion that it found “incriminating material” during searches on two corporate entities in 2019, which exposed financial payments of approximately Rs 520 crore made to the Congress party.
According to the Income Tax Department, there are inconsistencies in Section 13 (A) of the Income Tax Act that prevent Congress from obtaining an exemption from paying income tax. Due to inaccuracies in IT reports for the assessment year 2018–19, the Income Tax Department has retrieved Rs 135 crore from bank accounts belonging to Congress.
Meanwhile, Congress intends to petition the Supreme Court to stop the IT Department from acting against its accounts. An amount of Rs 918 crore was raised in the demand notices they received for a number of fiscal years, with the greatest demand occurring in 2018–19, the year of the Lok Sabha elections.