ITAT dismisses Congress’ appeal citing late IT return filing and violations of cash donation limits in 2018–19 financial year.
In a major financial blow to the Indian National Congress, the Income Tax Appellate Tribunal (ITAT) has dismissed the party’s appeal seeking exemption from a ₹199 crore tax demand raised for the financial year 2018–19.
❌ Late Filing, Donation Violations Cited
The tribunal pointed out that the Congress filed its income tax return on February 2, 2019, missing the statutory deadline of December 31, 2018. The return declared nil income but claimed a tax exemption of ₹199.15 crore.
However, scrutiny by the Assessing Officer in September 2019 revealed that the party had accepted ₹14.49 lakh in cash donations, with several individual donations exceeding ₹2,000, the maximum legal limit for anonymous cash contributions.
🧾 Key Findings and Chronology:
- Feb 2, 2019: Congress filed IT return, claiming ₹199.15 crore exemption.
- Sep 2019: IT Dept flagged ₹14.49 lakh in cash donations breaching the ₹2,000 limit.
- 2021: Exemption request officially denied by Income Tax Department.
- Mar 2023: Commissioner of Income Tax (Appeals) upheld the decision.
- 2024: ITAT rejected Congress’ appeal, citing no relief due to non-compliance.
The Income Tax Act mandates that all donations above ₹2,000 must be made through banking channels like cheque or digital transfer to maintain transparency in political funding.
📌 Tribunal’s Stand
“The assessee’s return filed on 2.02.2019 is not within the ‘due’ date to make it eligible for the impugned exemption,”
– Income Tax Appellate Tribunal
The ITAT emphasized that timely filing and strict adherence to donation rules are essential for claiming exemptions under political party income provisions.
⚖️ No Interim Relief Either
Last year, the Congress approached the ITAT seeking interim relief, which was also refused. With the final ruling now in place, the party will have to comply with the ₹199 crore tax liability, unless it chooses to escalate the matter to the High Court or Supreme Court.
📊 Political Implications
This development adds to the Congress party’s ongoing financial and legal hurdles amid the upcoming political landscape. It also puts a spotlight on transparency in political funding and the importance of timely tax compliance by registered parties.
