Congress Loses Rs 199 Crore Tax Appeal Over Late Filing, Cash Donations: ITAT Rules

The Income Tax Appellate Tribunal (ITAT) has dismissed its appeal against a tax demand of ₹199.15 crore. The tribunal upheld previous rulings, citing late filing of income tax returns and violations of cash donation rules as grounds for denying exemption.

The tax dispute stems from the assessment year 2018-19, during which the Congress filed its income tax return on February 2, 2019—more than a month after the deadline of December 31, 2018. The party declared zero income but sought an exemption on ₹199.15 crore in receipts.

However, during scrutiny, the Income Tax Department found that the Congress had received ₹14.49 lakh in cash donations, many of which exceeded the legal limit of ₹2,000 per donor. Under Indian tax laws, any donation above ₹2,000 must be made via banking channels like cheque, draft, or electronic transfer.

Due to these violations, the assessing officer rejected the exemption claim and levied tax on the full amount. The department’s decision was upheld by the Commissioner of Income Tax (Appeals) in March 2023. The Congress had then approached the ITAT, which refused to grant interim relief last year and has now dismissed the appeal altogether."

“The assessee's return filed on 2.02.2019 is not within the 'due' date to make it eligible for the impugned exemption,” the tribunal observed in its ruling. This ruling could add to the financial pressure on the Congress ahead of upcoming state and national elections, as it may be forced to pay the entire ₹199 crore tax liability from its party funds.
 

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