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NEW DELHI: Delhi high court on Wednesday refused to intervene in tax recovery proceedings against Congress and said its problems are “to a large extent of its own making”. Declining to tinker with an order of the Income Tax Appellate Tribunal (ITAT), a bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav noted, “The petitioner appears to have fallen into deep slumber and stood reawakened only in Jan 2023 when a notice of demand came to be raised… ITAT, in our considered opinion, was consequently justified in rejecting the allegation of the action being either motivated or actuated by mala fides.”
ITAT, for its part, had declined to stay a notice issued by the income tax department to Congress for recovery of outstanding tax of more than Rs 100 crore. Taking note of adjournments taken by Congress before ITAT, high court observed said an “assessee in default can neither be permitted nor expected to adopt such a casual or lackadaisical approach while faced with a tax demand which had remained outstanding right from 2021, and in respect of which no protective measures were sought or adopted for almost two years between 2021 and 2023”.
It, however, permitted Congress to approach ITAT with a fresh plea seeking a stay, bringing to its notice the change in circumstances, including that an amount of Rs 65.9 crore has already been recovered by the I-T department following encashment of bank drafts.”An application, if so moved, may be considered by ITAT with due expedition,” the HC directed, noting that Rs 65.9 crore translates to roughly 48% of the outstanding demand, and this changed circumstance is an aspect that would merit ITAT’s consideration in case Congress chooses to move a fresh application for stay.
The assessing officer had raised a tax demand of more than Rs 100 crore for assessment year 2018-19 when the income was assessed to be more than Rs 199 crore. The HC noted that after the Commissioner of Income Tax (Appeals) dismissed Congress’s appeal against the demand order on March 28, 2023, the petitioner moved an appeal before ITAT on May 24, 2023 and a stay application was filed only on Feb 14, 2024. “This would clearly appear to suggest that the petitioner has been far from vigilant and clearly lax in pursuing the legal remedies which were otherwise available,” the HC pointed out.
ITAT, for its part, had declined to stay a notice issued by the income tax department to Congress for recovery of outstanding tax of more than Rs 100 crore. Taking note of adjournments taken by Congress before ITAT, high court observed said an “assessee in default can neither be permitted nor expected to adopt such a casual or lackadaisical approach while faced with a tax demand which had remained outstanding right from 2021, and in respect of which no protective measures were sought or adopted for almost two years between 2021 and 2023”.
It, however, permitted Congress to approach ITAT with a fresh plea seeking a stay, bringing to its notice the change in circumstances, including that an amount of Rs 65.9 crore has already been recovered by the I-T department following encashment of bank drafts.”An application, if so moved, may be considered by ITAT with due expedition,” the HC directed, noting that Rs 65.9 crore translates to roughly 48% of the outstanding demand, and this changed circumstance is an aspect that would merit ITAT’s consideration in case Congress chooses to move a fresh application for stay.
The assessing officer had raised a tax demand of more than Rs 100 crore for assessment year 2018-19 when the income was assessed to be more than Rs 199 crore. The HC noted that after the Commissioner of Income Tax (Appeals) dismissed Congress’s appeal against the demand order on March 28, 2023, the petitioner moved an appeal before ITAT on May 24, 2023 and a stay application was filed only on Feb 14, 2024. “This would clearly appear to suggest that the petitioner has been far from vigilant and clearly lax in pursuing the legal remedies which were otherwise available,” the HC pointed out.
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