SC Questions Delhi HC Order Asking Congress To Move ITAT For Stay On Tax Demand

The Supreme Court on Monday raised concerns about the Delhi High Court’s decision directing the Congress party to approach the Income Tax Appellate Tribunal for a stay on a tax demand notice of over ₹100 crore.

A bench of Justices BV Nagarathna and N Kotiswar Singh questioned why the high court instructed the Congress to return to the ITAT when it had already appealed against the tribunal’s order. The bench observed, “The high court was not right in not exercising its jurisdiction.”

Despite these concerns, the Supreme Court allowed the ITAT to continue hearing the Congress party’s appeal. Additional Solicitor General N Venkataraman, representing the Income Tax department, informed the court that the recovery of the outstanding amount had already been made, rendering the issue largely academic.

Senior advocate Vivek Tankha, representing the Congress, argued that the high court should have granted an interim stay on the demand notice instead of directing the party to the ITAT.

On March 13, the Delhi High Court had refused to interfere with the ITAT’s order, which declined to stay the Income Tax department’s recovery notice issued on February 13, 2024. The high court, however, allowed the Congress to file a fresh stay application with the ITAT, highlighting that ₹65.94 crore had already been recovered by the department.

The original tax demand, raised by the assessing officer for the assessment year 2018-19, was over ₹100 crore, with the income assessed at more than ₹199 crore. The Congress had argued that the ITAT’s rejection of its stay application was unjustified, but the high court noted that the party had been slow in pursuing its legal remedies.

The Supreme Court has now issued notice to the Income Tax department and clarified that the ongoing special leave petition will not affect the ITAT’s proceedings on the Congress’s plea.

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