The Congress party has taken its case to the Delhi High Court after the Income Tax Appellate Tribunal (ITAT) declined to suspend the demand notice issued by the Income Tax (IT) department. The demand notice seeks the recovery of over ₹105 crores as outstanding tax from the Congress party.

The issue was brought before a bench consisting of Acting Chief Justice Manmohan and Justice Tushar Rao Gedela. Subsequently, the Court granted permission for the matter to be listed for hearing today.

Senior Advocate Vivek Tankha brought up the matter, stating that the accounts of the Congress party have been frozen. He further mentioned that the party's application for a stay was turned down by the Income Tax Appellate Tribunal last week.

Tankha argued, "This is the peak time for elections. If we do not have the money, how will we fight? ITAT had protected us but now that is gone."

The Court stipulated that if the petition is deemed in order by 11:30 AM, the matter will be listed for the day's proceedings. The Income Tax (IT) department had previously issued a notice to the Congress party for the recovery of ₹105 crores as outstanding tax for the assessment year 2018-19. In a ruling issued on March 8, 2024, the Income Tax Appellate Tribunal (ITAT) determined that the IT authorities had not committed any errors in rejecting the income tax exemption sought by the Congress party.

The ITAT further stated that the Congress party failed to establish a strong prima facie case against the denial of exemption by the IT authorities.

In July 2021, the IT authorities declined the Congress party's declaration of nil income and demanded over ₹105 crores as tax. The demand was based on two grounds: first, that the return had been filed beyond the prescribed time period, and second, that the party had received "donations" totaling ₹14,49,000 from various individuals, each exceeding ₹2,000.

The controversy erupted in February 2024 when the Congress party claimed that its bank accounts were frozen by the IT Department because the cheques it issued were not being honored. The Congress challenged the IT department's proceedings before the Income Tax Appellate Tribunal (ITAT), alleging that the recovery proceedings initiated on February 13 were aimed at creating hardships for the party, particularly in light of the upcoming parliamentary elections. This dispute arose after the IT authorities declined the Congress party's declaration of nil income and demanded over ₹105 crores in taxes, citing violations of Section 13A of the Income Tax Act, which allows political parties to claim exemptions from tax under certain conditions.