Congress Faces Financial Blow as Income Tax Department Issues Rs 1,700 Crore Demand Notice
New Delhi, 29th March 2024: Rahul Gandhi responded to the Income Tax Department’s notice to Congress on Friday, stating, “When the government changes, action will be taken against those who indulge in ‘democratic hijacking’. The action will be such that no one will dare to do this again. This is my guarantee.”
He made these remarks while employing the hashtag #BJPTaxTerrorism on the social media platform X. The Income Tax Department issued a fresh demand notice to Congress for Rs 1,700 crore. Sources indicate that this demand notice covers the period from 2017-18 to 2020-21 and encompasses penalties along with interest.
The latest notice comes as a blow to Congress, which is facing a financial crunch ahead of the Lok Sabha elections. Just a day earlier, on March 28, the Delhi High Court dismissed Congress’ plea regarding tax assessment.
Following the receipt of the notice, Congress convened a press conference on Friday afternoon. Ajay Maken asserted, “Yesterday, we received notices to pay Rs 1,823 crore from the Income Tax Department. This pertains to five years of taxes. They are conducting assessments for three additional years.” He revealed that the notice includes a demand of Rs 35 crore dating back to the time of Sitaram Kesari. “Considering the criteria for which Congress has received penalty notices, BJP should also be charged Rs 4,600 crore,” he stated.
Maken further highlighted that in the fiscal year 2017-18, the Income Tax Department imposed fines of Rs 135 crore on Congress for violations worth Rs 14 lakh. In the same period, BJP received approximately Rs 42 crore in donations from 1,297 individuals.
“Income Tax has turned a blind eye to these violations; they only target Congress. BJP should be fined Rs 4,600 crore,” he asserted. He emphasized the necessity for the department to assess all of BJP’s donations using the same parameters applied to Congress. “Congress has been asked to pay Rs 1,823 crore. This is an unequal playing field. If the rules are equal for everyone, then BJP should be charged Rs 4,600 crore.”
The Delhi High Court had remarked that there were numerous transactions in the accounts of Congress. The party had filed a petition against the initiation of income tax reassessment proceedings for four years (2017-18, 2018-19, 2019-20, and 2020-21). Justices Yashwant Varma and Purushendra Kaurav’s bench, while dismissing the petition on March 28, noted that there were numerous transactions in Congress’ accounts, providing ample evidence for tax assessment action. Previously, Congress had challenged the assessment proceedings for 2014-15 to 2016-17, but the petition was also dismissed by the court. Three earlier petitions had faced similar dismissal.
On March 25, the court dismissed three more petitions by Congress, citing that the party had opted to appeal in court shortly before the assessment’s completion and at the final stage of the proceedings. On March 8, the court upheld the order of the Income Tax Appellate Tribunal (ITAT), which had declined to stay the demand notice issued to Congress for the recovery of taxes exceeding Rs 100 crore for 2018-19. With the imposition of a Rs 200 crore penalty by the Income Tax Department and the freezing of its accounts, Congress is already grappling with a funds shortage. In the absence of relief from the High Court, speculations are rife that the party may approach the Supreme Court. The Income Tax Department had previously recovered nearly Rs 135 crore from Congress’ accounts for the assessment of taxes for 2018-19.
