congress-vs-it-department-high-stakes-showdown-in-delhi-court-tomorrow

The Delhi High Court will hear a plea by the Indian National Congress (INC) on Tuesday, seeking a stay on the Income Tax notice for recovery of over Rs 105 crore in outstanding taxes.

This comes after the Income Tax Appellate Tribunal (ITAT) dismissed the Congress Party's plea for a stay against the recovery proceedings and freezing of their bank accounts. The ITAT bench ruled that the application lacked merit, prompting the Congress to move the high court for relief.

In response to the Congress's plea, the bench of Justice Yashwant Verma and Justice Purushaindra Kumar Kaurav listed the matter for a detailed hearing on Tuesday.

The ITAT's dismissal of the Congress's plea was based on the grounds that the recovery notice issued by the Income Tax Department was not lacking in bona fides. The bench emphasized that each application for a stay must be decided on its own facts and circumstances.

Furthermore, the bench noted that despite the rejection of the appeal by the CIT (Appeals) in March 2023, no recovery action was initiated by the assessing officer until February 13, 2024.

The bench highlighted the Congress's failure to demonstrate eagerness to settle the issue, citing multiple instances of adjournments during appeal hearings.

Senior Advocate Vivek Tankha, representing the Congress, argued that the timing of the recovery proceedings, just before the parliamentary elections, would severely impact the party's financial standing. 

Tankha alleged malice on the part of the assessing officer, accusing them of intending to bring the party's activities to a standstill.

On the other hand, the Income Tax Department defended its actions, asserting that the recovery proceedings were routine and not politically motivated. The department highlighted the Congress's non-compliance with payment requests and emphasized the need for treating the party as a normal assessee.

Meanwhile, the Income Tax Department has already recovered Rs 65 crore from the Congress's accounts out of the total outstanding tax dues of Rs 115 crore.

The Congress has appealed against this recovery, seeking a stay on further proceedings until the disposal of their plea before the high court. The outcome of the hearing on Tuesday will be keenly watched, given its potential implications for the Congress Party ahead of the elections.