In another setback to the Congress party, the Delhi High Court rejected its petitions challenging the Income Tax reassessment proceedings initiated by the Income Tax department for four years. After all seven petitions by Congress have been rejected, Congress party is likely to face a tax demand of more than Rs 520 crores from the Income Tax Department for “unaccounted transactions” between the period 2014-2021.
Last week, the high court rejected three petitions by Congress challenging reassessment proceedings initiated for three years (2014-15, 2015-16 and 2016-17) by the Income Tax department. Congress filed seven writ petitions against tax department, which is seeking to conclude the ongoing reassessment for seven financial years (2013-14 to 2020-21) by March 31. Out of these seven petition, three were dismissed by the high court on Friday and remaining four were rejected today.
A Division Bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav dismissed the petitions noting that it is covered by the High Court's earlier order where three petitions filed by Congress were rejected.
In the previous order, the bench had noted that on a prima facie examination it was evident that the Income Tax department appears to have collated substantial and concrete evidence warranting further scrutiny and examination under the I-T Act.
”We consequently find no justification to interdict the assessment proceedings at this belated stage by invoking our jurisdiction under Article 226 of the Constitution. However and whether the asserted delay in commencement of proceedings would be fatal to the assessment itself is a question that we leave open to be urged at an appropriate juncture,” the court said.
The high court bench noted that the material in Satisfaction Note as drawn by the accessing officer makes detailed references to unaccounted transactions with respect to the Lok Sabha Elections of 2019 and MP Assembly Elections 2018 and 2013. The said note also carries material seeming to suggest payments and contributions made by government departments and corporations, liquor manufacturers, industry entities and individuals to the Congress Party.
According to the court order a person named P V Sunil accepted in his statement to the I-T department that he had paid cash amounts at 24, Akbar Road.
On Friday, the high court rejected three petitions by Congress stating, "the material which is taken note of in the Satisfaction Note makes detailed references to unaccounted transactions with respect to the Lok Sabha Elections 2019, MP Assembly Elections 2018...Assembly Elections 2013. Apart from the above there is specific reference to unaccounted for transactions pertaining to the three AYs‘ in question as would be evident from some of the details that we have chosen to extract hereinabove. The search documents recovered from the MEIL Group appear to indicate unaccounted transfers to the political party during AYs‘ 2017-18 to 2020-21," the order read.
In the Friday order, details in I-T department's 'satisfaction note' have not been revealed completely by the high court, however, there are several references unaccounted cash transactions where funds were allegedly delivered to 24, Akbar Road (Congress headquarters).
The I-T department in its searches on Megha Engineering found 10 diary entries showing cash payments of close to Rs 26 crore to Akbar Road between February 28, 2019, and October 1, 2019. The order has cited many such transactions.
The bench further noted that the material which forms part of the Satisfaction Note also captures details of disbursements made to candidates vying in upcoming elections together with signed receipts. "There is a detailed reference to payments allegedly made to MPs‘/MLAs‘ and candidates. The said note also carries material seeming to suggest payments and contributions made by government departments and corporations, liquor manufacturers, industry entities and individuals to the petitioner," the order read.