ITAT Reserves Ruling On Congress Plea To Stay IT Department's Tax Demand

The Income Tax Appellate Tribunal on Thursday reserved its orders in a plea filed by the Indian National Congress, seeking a stay on an income tax demand of Rs 210 crore.

Arguing for Congress, senior advocate and party leader Vivek Tankha requested the court to grant a mechanical stay on the proceedings. He argued that the demand has been raised right before the 2024 general elections and if it is enforced, then it will lead to acute financial hardship for the party.

"All I'm asking for is a stay; my kitty is very low," argued Tankha.

If a stay is not granted in such a depleted position, then it will make sure that Congress will not be able to contest the coming election on a level playing field. "We are here not only to protect the assessee (Congress), we're here to protect our democracy," Tankha said.

Appearing for the Income Tax Department, lawyer Zoheb Hossain rejected Congress's stance that the tax demand was raised right on the eve of the elections.

"This is a demand that we have been trying to recover since 2021. Congress cannot take advantage of its own wrong, as it did not pay nor did it challenge the 2021 order for three years," Hossain said.

Hossain also argued that a mechanical stay cannot be granted by the tribunal as it goes against a Supreme Court judgement that highlighted that an appellate tax tribunal's power of stay cannot be exercised in a routine manner.

On Feb. 16, the Indian National Congress said that its bank accounts were frozen over an income tax demand of Rs 210 crore.

Congress Treasurer Ajay Maken, who had earlier addressed a press conference to announce that Income Tax authorities had frozen its accounts, said the tribunal has put a lien of Rs 115 crore on its accounts and the party has been allowed to spend over and above that.

This means that Rs 115 crore has been frozen. This amount is much more than the party has in its current accounts, Maken said.

It is Congress's contention that this move will not allow it to participate in the "festival of elections" if its accounts remain frozen.

However, during the last hearing before the ITAT on Feb. 21, the tax department informed the tribunal that Congress is financially sound and the tax demand will not cause any kind of hardship to the party.

In contrast, Congress had contended that the department was not following due process and the tax demand would hamper its election campaign.