Setback for Cong: Delhi HC refuses to stay I-T notice for Rs 100 cr tax recovery

New Delhi: The Delhi High Court on Wednesday upheld an order of the Income Tax Appellate Tribunal (ITAT) refusing to stay a notice issued by the Income Tax department to the Congress party for recovery of outstanding tax of more than Rs 100 crore.

A bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav said there was no reason to interfere with the ITAT's March 8 order.

The bench had reserved its order on Tuesday after hearing the submissions on behalf of the Congress and the I-T department.

The Congress approached the high court after ITAT dismissed the party's application seeking a stay on the February 13 notice of the I-T department initiating recovery proceedings against it.

The assessing officer had raised a tax demand of more than Rs 100 crore for the assessment year 2018-19 when the income was assessed to be more than Rs 199 crore.
The counsel for the Congress had urged the court to grant it some protection otherwise the party would collapse.
The I-T department's counsel had informed the court that the original tax demand stood at Rs 102 crore and together with interest it rose to Rs 135.06 crore. He said Rs 65.94 crore stands recovered now.

The tribunal had dismissed the stay application saying, " we do not find that the recovery notice under Section 226(3) of the Act issued by the assessing officer on February 13, 2024 is lacking in bona fides, so as to require us to intervene."

The party had earlier said the I-T tribunal order freezing its funds was "an attack on democracy" as it had come just ahead of the Lok Sabha elections.