Income Tax (I-T) department issues Rs 1700 crore notice to Congress after High Court rejects its reassessment plea

The Income Tax Department issued Rs 1700 crore notice to the Congress party, covering penalty and interest for assessment years from 2017-18 to 2020-21. The notice was served shortly after the Delhi High Court dismissed the party’s appeals challenging the tax reassessment conducted by the I-T department.

Congress leader Vivek Tankha confirmed the development.

Justices Yashwant Varma and Purushaindra Kumar Kaurav’s bench rejected the pleas, adhering to their previous decision against interfering with another year’s reassessment.

This follows the Congress party’s statement regarding frozen bank accounts, hindering campaign activities. Rahul Gandhi stated in a press conference, “All our bank accounts have 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.”

The Congress leader highlighted that this occurred just two months before the election campaign. Notices for periods dating back to the 90s and six to seven years ago were received. Gandhi emphasized that despite a small quantum of Rs 14 lakh, the penalty jeopardizes the party’s entire financial identity. He accused the Election Commission of inaction.

Delhi High Court dismisses appeal

On Thursday, Delhi High Court rejected Congress’ petitions contesting tax reassessment for four years. Justices Yashwant Varma and Purushaindra Kumar Kaurav, part of the bench, maintained their previous stance against interfering in reassessment for an extra year. The case involves assessment years spanning from 2017 to 2021.

The Congress party had challenged reassessment proceedings for assessment years 2014-15 to 2016-17 in a previous petition dismissed the prior week.

The High Court dismissed the plea, stating the tax authority had gathered “substantial and concrete” evidence warranting further scrutiny. The department alleged around Rs 520 crore had evaded assessment during these years.

Furthermore, searches revealed cash transactions involving Congress, linked to entities including those connected to Karnataka deputy chief minister D K Shivakumar and a Surat-based company. These transactions violated tax exemption rules for political parties. Without exemption, parties are treated as “association of persons” and must pay taxes on their income, including cash transactions.

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