New Delhi: The Delhi High Court dealt a big blow to the Congress’ pre-election preparations on Friday by rejecting its petitions contesting the Income-Tax Department's reassessment proceedings. Justices Yashwant Varma and Purushaindra Kumar Kaurav delivered the verdict, highlighting that substantial evidence necessitates further scrutiny. The court noted the party's late challenge to the proceedings, filed just days before the assessment's scheduled completion on March 31, 2024.
The High Court said while the notice was issued to the party by the I-T Department on March 7, 2023, the satisfaction note by the assessing officer (AO) appeared to have been provided to the petitioner on June 28 and 30, 2023.
The court said the statutory time-frames mandate assessment to be completed within 12 months from the time when the books of accounts or material are handed over to the AO of the non-searched person.
This would mean that in the present case and taking the date of handing over or record of satisfaction as constituting the date from which that period is liable to be reckoned, the assessment is liable to be completed by March 31, 2024, the bench said.
The court, however, left open the question as to whether the delay in commencement of proceedings would be fatal to the assessment.
It said on a prima facie examination, it is evident that the authorities appear to have collated substantial and concrete evidence warranting further scrutiny and examination under the I-T Act.
The Congress had contested the initiation of proceedings under Section 153C of the Income Tax Act for the assessment years 2014-15 to 2016-17, arguing a limitation period of six assessment years. The I-T department, however, asserted there was no violation of any statutory provision by the tax authority and that as per the material recovered, the “escaped” income of the party is more than Rs 520 crore.
The High Court, in its judgment, said the material which is taken note of in the satisfaction note referred to unaccounted transactions with respect to the Lok Sabha Elections 2019, Madhya Pradesh assembly elections 2018 and MP assembly polls 2013. It underscored the party's failure to discredit the material forming the basis for reassessment.
Earlier, the court declined to intervene in the Income Tax Appellate Tribunal's decision not to stay a notice for the recovery of over Rs 100 crore in outstanding taxes from the Congress. The tax demand arose from an assessment year where the income surpassed Rs 199 crore.
