Income Tax tribunal dismisses Congress’s plea challenging Rs 199 crore tax demand

The Income Tax Appellate Tribunal (ITAT) has dismissed the Congress party's appeal against a tax demand of Rs 199.15 crore for the assessment year 2018-19, citing non-compliance with filing timelines and statutory conditions under Section 13A of the Income Tax Act.

The bench, comprising judicial member Satbeer Godara and accountant member M Balaganesh, on July 21 ruled that the party's income tax return, filed on February 2, 2019, did not qualify for exemption as it was submitted after the deadline.

“We thus conclude that the assessee’s return filed on 02.02.2019 is not within the ‘due’ date to make it eligible for the impugned exemption,” the Tribunal stated in its order.

The Congress had declared nil income in its belated return after claiming exemption of Rs 199.15 crore under Section 13A.

However, as per law, the deadline for filing the return for the assessment year 2018-19 was December 31, 2018. The ITAT held that the exemption provision under Section 13A strictly mandates compliance with this deadline.

The Tribunal observed that when it comes to interpreting an exemption under a tax law, the law must be followed strictly.

The Delhi High Court had already said this in its judgment dated March 23, 2016, in the Congress party's own case for the year 1994–95. The Supreme Court also confirmed this in its landmark 2018 judgment where it held that exemption claims in tax matters must be interpreted strictly, not liberally.

“We thus conclude that given the fact that the assessee has been held to have violated section 13A 3rd proviso in not filing its return within the prescribed ‘due’ date, its impugned netting claim also deserves to be declined in very terms…Ordered accordingly,” the order read.