I-T action against Congress time-barred on March 31: Report

New Delhi: Amid rising debate over the timing of the tax authorities action against the Congress party, official sources said the income tax assessment proceedings are “time-barred” under the laws and thus the notices must have been served on or before March 31.

According to section 149 of the Income Tax Act, the Income Tax Department can send notice to a taxpayer within seven years from the last date of the respective financial year. The statutory time limit in this case of Congress Party’s tax assessment is March 31, 2024.

Sources said the income tax assessments of Congress party were reopened for seven years following searches by the tax authorities conducted in April 2019. Official sources claim that incriminating materials have been seized during the search operations that indicate “extensive use of cash” by the Congress party in the electoral process.

Under section 13A of the Income Tax Act, all political parties, including the Indian National Congress, are exempted from paying income tax, subject to fulfillment of certain mandatory conditions.

Tax demands have been raised against the Congress party due to violation of the conditions for tax exemptions. The demands pertain to assessment year 2014-15 to 2020-21.

The Congress party had challenged the demands in the Delhi High Court, which dismissed it and allowed the Income Tax Department to complete the reassessments.

A source familiar with the tax disputes noted that the Congress party has been given several opportunities to reply to notices. “All the evidences available with the Department were given to INC (Indian National Congress),” a source said.

Justifying the tax authorities action, the source said: “As per the law it is very much in the domain of the Department to consider all the evidences available before the initiation of reassessment proceedings as well as the evidences collected during the reassessment proceedings while making any additions subject to following the principle of natural justice.”