Amid allegations of ‘tax terrorism’ by the Congress, the Income Tax Department on April 1 assured the Supreme Court that no action would be taken against the Indian National Congress over tax demands of ₹3,500 crore.
A bench of Justice B V Nagarathna and Justice Augustine George Masih recorded the statement of Solicitor General Tushar Mehta, “Since the elections are going on, we do not want any problem to arise for any political party… We will not take any drastic steps till then.” Will not pick it up.” On this, the Supreme Court has scheduled the hearing of the case on July 24.
Although, The trouble for the Congress had increased as the new notice from the Income Tax Department increased the tax demand to ₹1,745 crore for assessment year 2014-15 to 2016-17. With the latest notice, the Income Tax Department had demanded a total of Rs 3,567 crore from the Congress. The authorities had ended the tax exemption given to political parties based on a March 2016 Delhi High Court order and imposed tax on the party’s gross receipts.
Congress lawyer AM Singhvi, while challenging the High Court order making gross receipts taxable, had said that “gross receipts are never taxable. Only the total income is taxable. We are a political party, not a profit making organisation.” He also raised the issue of providing tax exemption to political parties under Section 13A of the Income Tax Act.
Mr Mehta said the total was more than ₹3,500 crore of “block assessment” of the last seven years. This did not include ₹135 crore recovered from the party.
He said the department had voluntarily given the “concession” in view of the prevailing circumstances of the elections. He made it clear that Congress was given the exemption despite the fact that the March 2024 tax demands of over ₹3,500 crore were not strictly related to the appeals pending in the Supreme Court.
Posting the case for hearing on merits, the top court recorded in its order that “the issues that have arisen in these appeals are yet to be adjudicated upon, but the statement by the Solicitor General It is said that no coercive action will be taken regarding the Income Tax Department’s demand of approximately ₹3,500 crore. Therefore, the matter will be heard on July 24. ,
