Congress Faces Rs 1700 Crore Tax Notice Amidst Election Season
In a significant development, the Income Tax Department has slapped the Congress party with a notice amounting to Rs 1700 crore, encompassing penalties and interest for the assessment years ranging from 2017-18 to 2020-21. The issuance of this notice closely follows the dismissal of the party's appeals by the Delhi High Court, challenging the tax reassessment conducted by the Income Tax Department.
Congress leader Vivek Tankha confirmed the issuance of the notice, indicating the gravity of the situation faced by the party.
Justices Yashwant Varma and Purushaindra Kumar Kaurav, presiding over the bench, stood firm on their decision to reject the pleas of the Congress party, reiterating their stance against intervening in the reassessment for additional years.
This development has come at a critical juncture for the Congress, with the impending election campaign looming large. The party's woes have been further compounded by the freezing of their bank accounts, severely impeding their campaign activities. Rahul Gandhi, in a press conference, lamented the hindrances posed by the frozen accounts, expressing concerns over the party's inability to support its workers, candidates, and undertake essential campaign initiatives. The timing of these events, just two months before the election campaign, has exacerbated the challenges faced by the Congress party.
The Congress leadership has underscored the broader ramifications of these actions, pointing out that notices spanning back to the 90s and six to seven years ago have been received. Despite the relatively trivial quantum of Rs 14 lakh, the imposition of penalties has cast a shadow over the party's financial integrity, endangering its ability to function effectively. Gandhi also criticized the Election Commission for its perceived inaction in addressing these issues.
Delhi High Court Dismissal
The latest blow to the Congress party comes in the form of the Delhi High Court's dismissal of their petitions contesting tax reassessment for four consecutive years. Justices Yashwant Varma and Purushaindra Kumar Kaurav, part of the bench overseeing the case, reiterated their stance against interfering in reassessment proceedings for an additional year. The assessment years in question span from 2017 to 2021.
This setback follows the Congress party's earlier petition challenging reassessment proceedings for assessment years 2014-15 to 2016-17, which was also dismissed by the High Court the previous week.
The High Court justified its decision by emphasizing the substantial and concrete evidence presented by the tax authority, warranting further scrutiny of the Congress party's financial transactions. Allegations of approximately Rs 520 crore evading assessment during these years have been leveled against the party.
Moreover, investigations uncovered cash transactions involving the Congress party, with links to entities associated with prominent figures such as Karnataka deputy chief minister D K Shivakumar and a Surat-based company. These transactions, found to be in violation of tax exemption rules for political parties, have raised serious concerns. Without the benefit of exemption, political parties are categorized as "associations of persons" and are consequently liable to pay taxes on their income, including cash transactions.
Conclusion
The ongoing legal and financial challenges confronting the Congress party have cast a shadow over its prospects, particularly as the country braces for a crucial election season. With bank accounts frozen and hefty tax notices looming large, the party finds itself navigating treacherous waters. The dismissal of their appeals by the Delhi High Court further compounds their woes, underscoring the need for swift and decisive action to address these issues. As the political landscape continues to evolve, the Congress party faces an uphill battle to regain its footing and effectively engage with its supporters and constituents.
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