Delhi High Court to hear on Tuesday plea by Congress in tax recovery case

New Delhi, Mar 11 (PTI) The Delhi High Court on Monday said it would hear on March 12 a petition by the Congress challenging an order by the Income Tax Appellate Tribunal refusing to grant stay on a notice issued by the tax department for recovery of outstanding tax of more than Rs 105 crore.

The matter was listed before a bench of justices Yashwant Varma and Purushaindra Kumar Kaurav.

It said it would hear the matter on March 12 as the court needs to go through the documents.

In the morning, the matter was mentioned by senior advocate Vivek Tankha before a bench of Acting Chief Justice Manmohan and Justice Tushar Rao Gedela which agreed to list the case for hearing during the day itself if the petition was in order.

Tankha said it was an urgent matter as the accounts of the political party have been frozen.

The Congress approached the high court after the Income Tax Appellate Tribunal (ITAT) on March 8 dismissed the party's application seeking a stay on the February 13 notice of the Income Tax Department initiating recovery proceedings against it.

The assessing officer had raised a tax demand of more than Rs 105 crore for the assessment year 2018-19 when the income was assessed to be more than Rs 199 crore.

Before the ITAT, the counsel for the Congress had stressed upon the hardship created for the assessee -- a national political party -- in view of the forthcoming Lok Sabha elections.

The counsel had contended that the initiation of the recovery proceedings under section 226 (3) of the Income Tax Act on February 13 are so timed that the assessee would not be left with enough resources to contest the parliamentary elections.

Attributing malice to the action of the assessing officer in exercising his power of recovery under the Income Tax Act, the counsel had submitted that the intention was not merely to recover the outstanding demand but to bring the activities of the assessee to a standstill as it would not be able to meet out even the basic maintenance and establishment expenditure.

The counsel for the Income Tax Department had countered the submissions, saying that the party was unnecessarily attributing motives to the action of the assessing officer who has proceeded in accordance with and according to the due process of law.

The tribunal had dismissed the stay application saying that "… we do not find that the recovery notice under Section 226(3) of the Act issued by the assessing officer on February 13, 2024 is lacking in bona fides, so as to require us to intervene".

The party has earlier said the I-T tribunal order freezing its funds was "an attack on democracy" as it had come ahead of the Lok Sabha elections.