Rs 135 Crore Recovered from Congress as Per Income Tax Act Provisions

New Delhi, Mar 29 - In a significant development, the Congress party faced a tax recovery of Rs 135 crore for the assessment year 2018-19, following a decision by the Income Tax Department. This action was based on evidence of extensive cash usage in the electoral process, discovered during search operations conducted in April 2019. The department's findings led to the reopening of assessments for seven consecutive years, from AY 2014-15 to AY 2020-21.

Representative image

The reassessment resulted in a demand raised in 2021, with multiple communications sent to the party to comply. Despite these notices and the rejection of stay applications by the assessee during proceedings, compliance was not met even after 33 months post-assessment order and 10 months following the Commissioner Income Tax Appeal order. This led to the initiation of recovery proceedings under Section 2263 of the Income Tax Act.

Consequently, recovery efforts resulted in the collection of approximately Rs 135 crore in outstanding demands, adhering strictly to the provisions of the Income Tax Act, 1961. This move, however, has sparked controversy, with the Congress labeling it as "tax terrorism" and accusing the BJP-led central government of misusing federal institutions to undermine democracy and diminish the Constitution's value.

Congress president Mallikarjun Kharge and leader Rahul Gandhi have both criticized the government's actions, suggesting a misuse of power to harass the opposition. Despite these allegations, sources within the Tax Department clarified that all procedures were followed correctly, with numerous opportunities provided to Congress for response, particularly regarding observations made by the Delhi High Court.

In addition to this case, another tax demand concerning the assessment year 1994-95 amounting to Rs 53 crore is currently pending before the Supreme Court. This ongoing legal battle highlights a complex intersection of politics and fiscal policy enforcement in India.

The situation underscores not only the rigorous enforcement actions by tax authorities but also raises questions about the political implications of such measures. As this case progresses, it will be closely watched for its impact on both political discourse and tax administration practices in India.