Delhi HC dismisses Congress’s plea for staying IT recovery notice | Latest News India - Hindustan Times
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Delhi HC dismisses Congress’s plea for staying IT recovery notice

Mar 13, 2024 03:13 PM IST

On March 8, the Income Tax Appellate Tribunal (ITAT) refused to stay the recovery notice, arguing that it was not without merit

The Delhi high court on Wednesday dismissed the Congress’s plea for staying an Income Tax (IT) department notice for the recovery of over 105 crore outstanding tax for the year 2018-19. “We find no ground to interfere with the order impugned,” said a bench of justices Yashwant Varma and Purushaindra Kumar Kaurav.

The court said it found no grounds to interfere. (Getty Images/iStockphoto)
The court said it found no grounds to interfere. (Getty Images/iStockphoto)

On March 8, the Income Tax Appellate Tribunal (ITAT) refused to stay the recovery notice, saying the proceedings were not initiated in undue haste and the notice was not without merit. The tribunal said the IT authorities had not made any error in denying the exemption claimed under the Income Tax Act. The tribunal said the party had not demonstrated its keenness to expeditiously settle the issue.

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The Congress moved the high court seeking quashing of the March 8 order. It argued the authorities adopted coercive measures by recovering outstanding demand and creating undue hardship for the party ahead of the general elections.

Senior advocate Vivek Tankha, who appeared for the Congress, submitted the IT department made it difficult for the party to contest elections. He argued the department, during the pendency of the party’s plea before the ITAT, recovered 48% of the outstanding amount.

Special counsel Zoheb Hussain, who represented the IT department, said the party had no prima facie case. He added a wrong impression was sought to be created that the proceedings began just before the elections. “We have shown that this has been going on since 2021. This is a routine recovery,” he said. He added no financial hardship was being caused as the Congress’s cumulative assets amounted to nearly 1,400 crore.

Hussain submitted the party approached the Commissioner of Income Tax (Appeals) in August 2021 challenging the July 2021 order. He added the assessing officer in October 2021 offered to keep the recovery in abeyance subject to the party depositing 20% of the disputed demand. Hussain submitted that with interest the total demand against the party was 135 crore, out of which 65.9 crore was recovered.

The high court on Tuesday reserved its verdict, observing the Congress was to blame for the February 13 demand notice. The court added the IT department in 2021 offered to keep the recovery proceedings in abeyance subject to the party depositing 20% of the disputed amount. It said the party did nothing to securitise the outstanding demand and instead chose to reject the offer.

“You don’t seem to have made any attempt or effort before the tribunal... even to make an offer to try and settle… Someone in the petitioner’s office went out asleep right from 2021. Did the petitioners take any stand in seeking to securitise? You’re a petitioner who chose to not accept their [IT department] offer way back in 2021..,” the high court told Tankha.

The court criticised the party for seeking repeated adjournments before the ITAT in its plea challenging the July 2021 order for over 105 crore outstanding tax. It said that the matter was badly handled. The court said there was no basic or fundamental infirmity with the ITAT’s March 8 order.

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