Delhi High Court rejected the plea by Congress against the Income Tax Appalate Tribunal (ITAT) Order. The high court on Tuesday had reserved verdict on Congress party's plea for stay on notice issued by the Income-Tax department to Congress party for the recovery of more than Rs 105 crores as outstanding tax.


While hearing the case the high court had said that the matter was badly handled by the Congress party and it appears that someone in the party office has been asleep since 2021.


The high court had orally remarked that there does not appear to be any fundamental infirmity with the Income Tax Appellate Tribunal (ITAT) order rejecting Congress' stay appeal.


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A bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav heard the case.


The Congress had moved Delhi High Court challenging ITAT order dismissing its plea seeking stay on the recovery of outstanding tax for the assessment year 2018-19.


Last week, the ITAT dismissed the plea by Congress saying that its intervention in not needed at this stage in the case.


On Monday, Senior Advocate and Congress MP Vivek Tankha mentioned the case before the division bench headed by Acting Chief Justice Manmohan which allowed urgent listing of the matter in the high court.


The total amount with interest that the I-T department seeks is now nearly at Rs 135 crore. The I-T department had issued notice to the Congress party for recovery of Rs105 crore in outstanding tax for the assessment year 2018-19.


In July 2021, the I-T department rejected the declaration of nill income by the Congress party and demanded Rs 105 crore in tax.


This demand was raised on the ground that the party filed return after the prescribed time period. The I-T department also found that the party has received donations worth more tha Rs 14 lakhs from indivisuals, which was in excess of Rs 2,000.


Thus, party violated Section 13A of the Income Tax Act, which allows a political party to claim exemption from tax.


While appealing in the high court, Tankha said that Congress's accounts have been frozen and their stay application was rejected by the ITAT. He urged the court that this is the peak time for elections. He said that ITAT had protected the party, but now that is gone.


In February, the Congress party found itself embroiled in a legal tussle with the Income Tax Department ahead of the Lok Sabha Elections 2024.


On February 16, the Congress treasurer Ajay Maken alleged that the I-T Department has frozen four of its bank accounts and has demanded Rs 210 crore in connection with the party's income tax returns in 2018-19. Maken said that 2018-2019 was the election year, and the deadline to submit account details was December 31, 2019. The Congress party was late by 40-45 days.


Following this, the party moved to the ITAT with an appeal against the freezing of its bank accounts and seeking a stay on the IT Department’s action.


After the first ITAT hearing, Congress trasurer Ajay Maken said that the Income Tax Department and the ITAT have lifted the freeze on its bank accounts but has said that the party has to ensure that Rs 115 crores are kept in the banks as lien. The ITAT allowed the Congress party to spend amounts over and above Rs 115 crores. But, the Congress party claimed that it has much less than Rs 115 crores on their current account.


The Congress also said that the I-T Department also initiated a recovery process by withdrawing the available Rs 65.8 crores from the Congress's bank accounts. The Congress claimed that they are being wrongly targeted by the I-T Department and said that no national party pays Income Tax.