Delhi High Court on Tuesday reserved its order on the Congress plea seeking a stay on the Income Tax notice for recovery of more On March 11, the Congress moved the Delhi High Court challenging the Income Tax Appellate Tribunal (ITAT) order which had dismissed the stay application. During the course of hearing, the Income Tax Department confirmed that they had recovered ₹65 crore from the grand old party's bank accounts of the ₹135 crore demand.
Earlier on March 8, dismissing the Congress’s plea for stay, the tax appellate tribunal had observed that “once the mandatory requirements contained in Section 13A of the Act is violated, there is no discretion with the income tax authorities to give any relaxation in allowing the exemption envisaged". The tribunal said Congress was unable to make out a “strong prima facie case" against the interpretation of Section 13A of the Act as adopted by the income tax department to deny exemption.
The tribunal also clarified that its observations in the March 8 order have been made only for deciding the stay application and shall have no effect on the merits of the case. In July 2021, The IT authorities had rejected the declaration of nil income by the Congress and demanded over ₹105 crores as tax.
The IT department had earlier issued notice to Congress for the recovery of ₹105 crores as outstanding tax for the assessment year 2018-19. The Congress had accused the BJP-led Centre of indulging in "financial terrorism" against it and alleged that the government had "looted" over ₹65 crore from its accounts to economically cripple the party ahead of Lok Sabha polls.
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