The Congress could face an existential crisis as the Income Tax Department is likely to ask the party to cough up nearly two times the amount of money than its total net worth of nearly Rs 1,430 crore.
The Congress on Friday said it has been served income tax demand notices for five assessment years worth Rs 1,823 crore, and it was still to serve a demand notice for three more assessment years.
Sources told News18 that the total amount recoverable from the Congress post the serving of the balance demand notices before March 31 could cross Rs 2,500 crore. This could pose the biggest challenge yet to Congress as the party’s total net worth is almost Rs 1,430 crore. In its latest IT return for Assessment Year 2023-24, the Congress had said it had a corpus of nearly Rs 657 crore, net assets to the tune of Rs 340 crore and cash and cash equivalents to the tune of Rs 388 crore — totalling about Rs 1,430 crore.
In a nutshell, the Congress may not be able to pay such an amount of Rs 2,500 crore even after going broke, as it is much more than its net worth. The IT Department does give an option to the assessee to pay 20 per cent of the demanded amount to stay the recovery.
“The Congress party has got no relief from the Delhi High Court regarding the re-assessment of their returns for seven years. Their petitions were rejected earlier this week. This was the reason Congress did a press conference chaired by Sonia Gandhi last week as they feared a huge demand notice for these seven years,” a government source told News18.
Congress will now be moving the Supreme Court to stop the moves of the IT Department. So far, Congress has received IT demand notices for financial years 1993-1994, 2016-17, 2017-18, 2018-19 and 2019-2020. The heaviest demand is for 2018-19 for Rs 918 crore. This was also the election year for the 2019 Lok Sabha elections in the country.
The IT Department is going to serve three more demand notices upon the Congress in the coming days for assessment years 2014-15, 2015-16 and 2020-21. This entire action is coming after the IT Department claims to have recovered “incriminating material” during raids on two corporates in 2019 about cash payments to the Congress to the tune of Rs 520 crore.
The IT Department has made a case that Congress, hence, cannot claim exemption from paying Income Tax on its income under Section 13 (A) of the Income Tax Act as provisions stand violated. The IT Department has already recovered Rs 135 crore from the Congress bank accounts for violations in IT Returns for the assessment year 2018-19.
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