HC cited recoveries made during a tax raid in 2019 on Megha Engineering and Infrastructure Limited (MEIL) to flag “unaccounted transfers to the political party during assessment years 2017-18 (financial year 2016-17) to 2020-21 (FY2019-20).” MEIL is in news for being one of the largest poll bond donors.
Evidence warrants further scrutiny under I-T Act: HC
We also take into consideration the indubitable fact that the cumulative figure attributed to income, which has allegedly escaped assessment would stand at approximately Rs 520 crore, a bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav said.
“On a prima facie examination, it is evident that the respondents appear to have collated substantial and concrete evidence warranting further scrutiny and examination under Income Tax Act,” Delhi HC said, adding that the tax proceedings are to be completed by March 31. While I-T department had initiated its proceedings last year, the court noted that Congress filed its petitions only two days ago (on March 19). “We consequently find no justification to interdict the assessment proceedings at this belated stage by invoking our jurisdiction under Article 226 of the Constitution,” it said. HC, in its verdict, said the material which was taken note of in the ‘satisfaction note’ referred to unaccounted transactions with respect to Lok Sabha elections 2019, Madhya Pradesh assembly elections 2018 and MP assembly polls 2013.
“The material which forms part of the satisfaction note also captures details of disbursements made to candidates vying in upcoming elections together with signed receipts. There is a detailed reference to payments allegedly made to MPs/MLAs and candidates,” the court said. It added that the note also carried material suggesting payments and contributions made by govt departments and corporations, liquor manufacturers, industry entities and individuals to the petitioner. I-T authorities contended that action was based on searches which were conducted on four individuals in April 2019, including aides of then Madhya Pradesh CM Kamal Nath. Court said on the basis of the material, which was gathered in those searches, the assessing officer also drew corresponding ‘satisfaction notes’ for initiation of proceedings against Congress.
Opposing the move, the party’s counsel submitted that the assessment which was proposed to be undertaken for assessment years (AY) 2014-15, 2015-16 and 2016-17 would be barred by the period of limitation and I-T department could have gone back to a maximum of six assessment years. The counsel contended that assessment under Section 153C of the Act could have at best covered the period of AYs 2017-18 to 2020-21. I-T department, however, maintained that there was no violation of any statutory provision by the tax authority.