No Recovery Of Rs 3,500 Crore Tax Dues From Congress Until Election End: Centre Assures Supreme Court

The central government has assured the Supreme Court that it will not take any measures to recover alleged income tax dues of about Rs 3,500 crore from the Indian National Congress (INC) party until the conclusion of the upcoming general elections.

The assurance was conveyed by Solicitor General of India (SG) Tushar Mehta during a hearing before a bench headed by Justice BV Nagarathna. This undertaking was formalised and documented in the interim order issued by the Court today.

The order explicitly stated that the issues in the appeals are yet to be adjudicated, but the Income Tax Department will avoid taking any concrete steps regarding the tax demand of Rs 3,500 crores. The order stated, “The issues which arise in these appeals are yet to be adjudicated upon but having regard to the situation now, the income tax department does not wish to precipitate the matter and (says) that no coercive steps will be taken with regard to (the tax demand of) ₹3,500 crores approximately. List the matter on the second week of July,” as quoted by the Bar and Bench report.

The Court’s proceedings stemmed from a petition filed by the Congress party challenging the aforementioned income tax demands, which SG Tushar Mehta clarified were rooted in a 2016 judgement.

During the hearing, SG Mehta disclosed that the Congress party had already cleared around ₹134 crore in income tax dues this year. However, a fresh demand of ₹1,700 crores has been raised based on previously established criteria.

Emphasising the sensitivity of the ongoing election process, the Central government’s counsel assured the Court that any actions aimed at recovering the outstanding dues would be postponed until after the Lok Sabha polls. SG Mehta told the Court, “Please have this on the Second week of June… I have much to say on merits,” Mehta stated before the Court.”

This temporary reprieve granted by the central government surprised the legal presentation of Congress. Justice Nagarathna expressed her surprise orally, urging the party not to harbour negative perceptions constantly. Senior Advocate AM Singhvi replied, “I am rendered speechless, and very few times I am.”

Responding to these developments, Singhvi highlighted the financial strain caused by the tax demands. Noting that the Income Tax authorities had already collected ₹135 crores through property attachments during March, Singhvi stated that Congress was a political party, not a profit-making organisation.

The Court recorded SG Mehta’s submissions and adjourned the case until July, acknowledging that the Rs 3,500 crore demand is not directly linked to the ongoing appeals but could be relevant to the latest demands made.

Notably, the Delhi High Court recently dismissed petitions filed by the Congress challenging the Income Tax Department’s decision to reopen assessment proceedings for various assessment years, including 2014–15, 2015–16, 2016–17, 2017–18 along with 2018–19, 2019–20, and 2020–21.