The Delhi High Court on Wednesday upheld an Income Tax Appellate Tribunal order that refused to stay a notice for the recovery of over Rs 105 crore as outstanding tax from the Congress, reported Live Law.
On March 8, the Income Tax Appellate Tribunal dismissed the Congress’ plea to stay the Income Tax Department’s proceedings of freezing the party’s bank accounts in connection with a dispute pertaining to a tax demand.
“We find no ground to interfere with the [impugned] order,” a division bench comprising Justices Yashwant Varma and Purushaindra Kumar Kaurav said on Wednesday.
However, the court allowed the Congress to move the appellate tribunal once again in case of any change in circumstances. The party has to pay Rs 134 crore including interest to the income tax department.
“As we read this order [Income Tax Appellate Tribunal], the petitioner has itself to blame,” the court said on Tuesday, according to Bar and Bench. “The demand is of 2021. It seems you made no efforts to securitise the demand. Someone in petitioner's office [Congress] has remained asleep since 2021.”
The Congress on February 16 had announced that its bank accounts had been frozen on “flimsy grounds” in connection with a tax demand dispute. Congress treasurer Ajay Maken said that the accounts were frozen on an income tax demand of Rs 210 crore for the financial year 2018-’19.
Later in the day, the Income Tax Appellate Tribunal allowed the Congress to operate its bank accounts but ordered it to maintain Rs 115 crore as a lien, effectively freezing these funds.
A lien is a legal claim against the assets of an individual or business accused of having failed to meet tax liabilities.
Maken had said that freezing the accounts of the Opposition party just before the Lok Sabha elections and hampering its political activities was “equivalent to freezing the democracy”.
On February 21, the Congress alleged that the Income Tax Department had ordered Rs 65 crore to be withdrawn from the accounts “undemocratically” even though proceedings are underway before an appellate authority.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!