Big setback for Congress- Congress’ Appeal Against Tax Demand Of Rs 199 Crore Dismissed By Tribunal.

In a setback for the Congress party, the Income Tax Appellate Tribunal (ITAT) has dismissed its appeal against a tax demand of ₹199.15 crore for the assessment year 2018-19.

The tribunal’s decision upholds the tax department’s demand, ruling that the Congress party is not eligible for tax exemption under Section 13A of the Income Tax Act.

This is primarily due to:

Late filing of returns: The Congress filed its income tax return on February 2, 2019, which is over a month after the stipulated deadline of December 31, 2018, for the assessment year 2018-19.

Violation of cash donation limits: The party was found to have received cash donations exceeding the permissible limit of ₹2,000 per individual, which is a violation of legal limits for claiming exemption.

The ITAT emphasized a strict interpretation of the exemption provisions under Section 13A, stating that failing to file the return within the due date results in the denial of the exemption. The tribunal cited previous rulings, including a Delhi High Court judgment in a similar case involving the Congress itself, and a Supreme Court judgment highlighting the need for strict interpretation of tax exemptions.

The Congress had declared nil income after claiming an exemption of ₹199.15 crore under Section 13A. The income tax department’s assessment order denied the exemption, making the full amount taxable, and this decision was upheld by the Commissioner of Income Tax (Appeals) before the Congress approached the Appellate Tribunal.