The Congress appears to have fallen into deep slumber and stood reawakened only in January 2023 when a notice of demand came to be raised, the Delhi high court remarked on Wednesday as it refused to stay a notice issued by the Income Tax (I-T) department to the party for recovery of over ₹105 crore outstanding tax for assessment year 2018-19.

Taking note of the change in circumstances, including the I-T department already having recovered ₹65.94 crore from the Congress following encashment of bank drafts, the court granted liberty to the party to approach the Income Tax Appellate Tribunal (ITAT) with a fresh stay application.

A bench led by justice Yashwant Varma said the problems that beset the Congress were, to a large extent, of its own making and added that the ITAT was justified in rejecting the allegation of the action being either motivated or actuated by mala fides.

The court noted that the party despite issuance of the first demand notice in July 2021 and rejection of its application for stay in October that year, took no steps to either securitise the outstanding amount or seek appropriate interim protection.

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“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 bench, also comprising justice Purushaindra Kumar Kaurav, said.

“As we read the impugned order, what ultimately appears to have weighed upon the ITAT is of the petitioner having firstly been remiss in taking peremptory steps in respect of a demand which had remained outstanding right from 2021. It failed to abide by the conditions which had been imposed by the AO (assessing officer) while considering its application under Section 220(6) of the [I-T] Act,” the bench said. “The petitioner appears to have fallen into deep slumber and stood reawakened only in January 2023 when a notice of demand came to be raised.”

The party’s appeal pertained to the ITAT order dated March 8 that refused to stay the February 13 notice of the I-T department on the recovery of demand, saying the proceedings were not done in an undue haste and the notice was not without merit.

“It would, therefore, be incorrect to accept the submission that the ITAT had failed to apply its judicial mind for the purposes of a prima facie evaluation of the questions which stood posited,” the bench noted.

Senior advocate Vivek Tankha, appearing for the Congress, had submitted that ITAT had erred in upholding the view that there was a failure on the party’s part to comply with the conditions imposed under Section 13A (income tax exemptions for political parties) of the Income Tax Act. The ITAT also failed to consider the issue of financial hardship which was raised by the party, the counsel had argued, urging the court to grant it some protection otherwise the party would collapse.