No relief for Congress in Rs 199 crore tax case: Tribunal says no exemption; flags late filing, cash donation violations

Time of India

22-07-2025

NEW DELHI: The Income Tax Appellate Tribunal (ITAT) has dismissed an appeal by Congress, upholding a Rs 199.15 crore tax demand. In a detailed order issued on Monday, a two-member bench ruled that Congress failed to meet key conditions required for availing the exemption, Bar and Bench reported.
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"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 noted.
The party had claimed exemption under Section 13A of the Income Tax Act for the assessment year 2018–19.
The exemption is granted to political parties despite filing its return after the statutory deadline and accepting cash donations in violation of legal limits.
The Congress filed its income tax return on February 2, 2019, over a month after the extended deadline of December 31, 2018, under Section 139(1) for that financial year.
The return declared nil income after claiming Rs 199.15 crore as exempt under Section 13A.
However, under Section 139(4B) of the Act, political parties must file their returns within the "due date" to qualify for this exemption. The ITAT rejected Congress' argument that a belated return, like those permitted for charitable trusts under Section 12A, should suffice.
Beyond the filing lapse, the assessment also flagged cash donations totalling Rs 14.49 lakh, each exceeding the permissible limit of Rs 2,000. The tribunal found the Congress in breach of this provision, stating: "Donation in excess of Rs 2,000 received in cash violates the provisions of clause (d) of the first proviso to Section 13A of the Act."