Income Tax recovers Rs 115 cr from Congress bank accounts, Rs 19 cr pending

Rs 115 cr recovery has been made between February 13-15, 2024.

The income tax department has so far recovered approximately Rs 115 crore from Indian National Congress (INC) bank accounts against the total outstanding demand of Rs 135 crore for assessment year 2018-19 arising on account of non-compliance of certain sections of the Act and late filing of returns, sources said.

“At present, recovery to the tune of Rs 115 crore has been made by withdrawing money from various bank accounts of INC. In proceedings before  Income Tax Appellate Tribunal (ITAT) on February 16, 2024, it was informed by the Income Tax Department that the recovery made by withdrawing money from accounts is a routine recovery measure,” the source told Moneycontrol.

However, sources clarified that the operation or activity of the accounts of INC has not been stopped. INC has many more accounts for its activities, a fact which was taken note of by the ITAT.

The hearing has now been fixed for February 21, 2024, by ITAT.
The demand of Rs 135 crore against INC for assessment year 2018-19 includes Rs 103 crore on account of assessment and interest of Rs 32 crore approximately. The assessment was done on INC’s income of Rs 199 crore for the year, he said.

The scrutiny assessment under Section 143(3) under the Income Tax Act, involving a detailed examination of INC’s return to validate various claims and deductions was completed on July 6, 2021. In the assessment, exemption under Section 13A was disallowed. According to Section 13A, any income of a political party is exempt from tax that is sourced from house property, capital gains, etc.

The assessment by the income tax department disallowed the exemption to INC due to late filing of the return and non-compliance with Section 13A(d) of the Income Tax Act, according to which any income a political party receives from voluntary contributions or any interest, dividend, or rent from its assets is not included in the party's total income for taxation.
Thereafter, in stay proceedings before the Assessing Officer, INC was requested to pay 20 percent of the total demand i.e. Rs 21 crore as per procedure. But INC paid only Rs 78 lakh after which tax demand was issued to pay the balance, he said.

The Indian National Congress filed the appeal in ITAT in May 2023.

Recovery from INC accounts

Out of Rs 115 crore recovered by the income tax department so far, approximately Rs 37.5 crore has been recovered from its Bank of Baroda account, Rs 22 crore from Union Bank, Rs 55 crore from State Bank of India, Rs 74 lakh from Oriental Bank of Commerce and Rs 7 lakh from Canara Bank. All these recoveries have been made between February 13-15, 2024, sources said.