In a significant setback for the Congress party, the Income Tax Appellate Tribunal (ITAT) has dismissed its appeal against a tax demand for the financial year 2017-18. The case pertains to over Rs 199 crore, which the party claimed as donations exempt from tax. The Income Tax Department, however, issued a notice seeking tax on the amount, citing delays in filing returns.
The Congress had argued that the donations should qualify for exemption under Section 13A of the Income Tax Act, which provides tax relief to political parties on income from voluntary contributions. However, the party failed to file its income tax returns within the prescribed timeline. It ultimately filed its return on February 2, 2019, well past the extended due date of December 31, 2018, for the assessment year 2018-19.
Upholding the tax authorities’ stance, the tribunal ruled that since the return was filed late, the party could not avail the exemption. As a result, the donations of Rs 199.15 crore will be treated as taxable income, and the Congress party is now liable to pay the corresponding tax for that year.
