Kolkata: On a day when the Congress party said that it had been served a notice of Rs 1,823 crore by the Income Tax department for alleged discrepancies in tax returns for previous years, The Wire has learnt that two Left parties – the Communist Party of India and the Communist Party of India (Marxist) have also been subjected to similar action.
CPI: ‘Rs 11 crore’
The Communist Party of India or CPI has received an income tax notice to pay alleged dues of Rs 11 crore. The reason cited is that the party used an “old PAN card.”
The left party is looking to challenge the notice in court.
CPI(M): ‘Rs 15.59 crore’
The Communist Party of India (Marxist) or CPI(M) has noted that its tax exemption was withdrawn for the financial year of 2016-17. A source at the party said it received a notice under Section 148A for the assessment year 2016-17 on the ground that “the assessee is maintaining a bank account, but the assessee has not declared this bank account in column 13(b) of the Income Tax return filed.”
The Section 148 deals with notice over income that has escaped assessment.
The party noted that it filed the financial statements at the central committee-level and that not listing that particular bank account was an oversight.
The department rejected the submission on July 29, 2022, and reopened the case, issuing notice under Section 148.
While the party says that it made “various submissions from time to time” in compliance with the notice, it received a show-cause notice on May 13, 2023, proposing that the claim of exemption it made under Section 13A be disallowed. The I-T department further sought Rs 22,66,30,516 from the party and CPI(M) asked to submit the reply against this show cause notice by May 17, 2023 – in four day’s time.
On May 16, CPI(M) sought an extension of time till May 29 saying that it needed to gather facts to submit its detailed reply. But by May 23, the department passed the final order stating that CPI(M) had not filed a response and levied a tax of Rs 15.59 crores for the financial year of 2016-2017.
The party has since moved the Delhi high court, which says sources, has hauled up the I-T department over its claim that it did not receive the party’s request for extension of time.
Sources note that extensions in such cases are routinely given. The court directed that till the I-T department responds on the next date, in July, the party need not pay the tax amount.
“This is just for one assessment year – 2016-17. The dispensation could do it for every year,” sources confirmed.
While CPI(M)’s tax imbroglio started in 2022 and is ongoing, the notices received by the Congress and CPI appear even more precisely timed ahead of the Lok Sabha polls. In the meantime, the CPI(M) became the only political party that went to court, among other civil society petitioners against the opaque electoral bond system – a case which culminated in the Supreme Court striking the scheme down as unconstitutional and ordering a full disclosure of funds received.
“There is no evidence to prove that this is a concerted effort to affect the opposition but it cannot be mere coincidence!” CPI(M) sources told The Wire.
The three parties – Congress, CPI and CPI(M) – are part of the opposition INDIA bloc which has recently been galvanised to action against the arrest of bloc member Aam Aadmi Party convener and Delhi chief minister Arvind Kejriwal’s arrest over the liquor excise case.
Kejriwal was arrested by the Enforcement Directorate, one of the three central agencies which activists and opposition parties allege are being misused rampantly by the Narendra Modi government to weaken critics. The Income Tax department and the Central Bureau of Investigation are the two others.
Congress president Mallikarjun Kharge asked on X earlier today (March 29), “Who is pressurising the Income Tax Department to act in this unjustified manner only against the Opposition?”
Kharge has alleged that the ruling Bharatiya Janata Party has a pending penalty of “Rs 4,600 crore” which it has ostensibly been exempted from paying.
This, “[d]espite the fact that public information of the Election Commission clearly shows that, 1297 people have deposited Rs 42 Cr to BJP in 2017-18 without mentioning their name and addresses. Congress was fined Rs 135 Cr for Rs 14 lakh deposits and its account was frozen. But in the last 7 years, this penalty to BJP, amounts to a whopping Rs 4,600 Cr!” Kharge wrote.
