The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has upheld a tax demand of approximately ₹199.15 crore on the Indian National Congress (INC) for Assessment Year 2018–19, denying it the crucial exemption under Section 13A of the Income Tax Act.
The bench of Satbeer Singh Godara (Judicial Member) and M. Balaganesh (Accountant Member) has observed that the exemption, meant for registered political parties, was disallowed on two major grounds — late filing of the income tax return and alleged violation of the Rs. 2,000 cash donation cap.
The Indian National Congress (All India Congress Committee) appealed against the order of the Commissioner of Income Tax (Appeals) which had upheld the assessment made by the Deputy Commissioner of Income Tax, Central Circle-19, New Delhi. The assessment order dated July 6, 2021, had denied the party the benefit of Section 13A exemption and determined its total taxable income at ₹199,15,26,560, leading to a consequential demand that included substantial interest and penalty amounts.
The Congress contended that the return was filed within the broader deadline under Section 139(4) and thus should qualify for the exemption. The sum received in cash was labeled as “voluntary contributions” and not “donations,” and hence should not fall under the ₹2,000 cap. The party maintained complete records and identified donors, satisfying the law’s transparency objective.
According to the Tribunal’s findings and the assessment order, two primary violations were cited:
- Delayed Filing of Return of Income:
The INC filed its return on February 2, 2019. However, the tax department argued that this was beyond the extended deadline of December 31, 2018, for political parties. Citing the second proviso to Section 13A and Section 139(4B), the department contended that timely filing is mandatory for claiming exemption. The Tribunal agreed, holding that failure to file the return on time disqualified the party from availing the benefit. - Violation of Cash Donation Limit under Section 13A(d):
The department highlighted that INC received ₹14,49,000 in cash donations, with individual amounts exceeding ₹2,000, which violated the post-2018 amendment to Section 13A(d). The Tribunal held that even though the contributors were identified and PAN details were furnished, the receipt of donations in cash above the permissible limit constituted a direct breach of the law.
The Tribunal emphasized that compliance with all conditions under Section 13A, including timely return filing and adherence to donation limits, is mandatory and non-negotiable. Mere furnishing of donor details does not cure the defect of accepting cash donations beyond the statutory limit. The exemption under Section 13A is a special provision and must be construed strictly.
Case Details
Case Title: Indian National Congress Versus DCIT
Case No.: ITA No.1609/Del/2023
Date: 21.07.2025
Counsel For Appellant: P.C. Sen, Sr. Adv.
Counsel For Respondent: Zoheb Hossain
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