Income Tax Appellate Tribunal rejects Congress' appeal against tax demand on ₹199 crore income

The Hindu

2 days ago

The Income Tax Appellate Tribunal on Tuesday (July 22, 2025) has rejected the Indian National Congress' appeal against an income tax demand on an income of ₹199.15 crore, saying that the party filed its returns past the deadline for availing of exemptions due to political parties, and that it also violated cash donation limits.
'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 ITAT said in its order.
According to the order, the Congress filed its income tax return for the financial year 2017-18 on February 2, 2019. As per the Income Tax Act, 1961, political parties are allowed a later deadline for filing their returns. For the financial year 2017-18, that deadline was December 31, 2018.
In its return, the Congress had declared nil income for 2017-18 after claiming an exemption of ₹199.15 crore under Section 13A of the Income Tax Act, 1961. However, the ITAT ruled that, since the return was filed late, it was not eligible for this exemption.
In addition, the assessing officer also found that the Congress had received ₹14.49 lakh as cash donations, which exceeded the limit of ₹2,000 per individual. According to changes made to the Income Tax Act made through the Finance Act 2017, political parties can receive donations above ₹2,000 only through formal banking channels, not cash.
Overall, the party's declared total receipts of ₹199.15 crore against expenses of ₹197.43 crore, thereby showing a surplus of ₹1.71 crore. However, the Income Tax Department's assessment order on July 6, 2021, denied that the income could be exempted from tax, making the full receipt amount taxable.
The Commissioner of Income Tax (Appeals) then upheld this decision on March 28, 2023, following which the Congress approached the Appellate Tribunal.