SC Anticipated to Hear Rs 199 Crore Income Tax Exemption Indian National Congress Case on Dec 5

On December 5, 2025, the Supreme Court is likely to hear the Indian National Congress party’s Rs 199 crore Section 13A income tax exemption dispute regarding denial of tax benefits after the party was accused of filing its return late and accepting Rs 2,000 above cash donations.

The Assessing Officer had rejected the exemption on two grounds: first, that the return was not filled within the given time under Section 139(4B) and second, that the party had received cash donations above Rs 2,000 in breach of Section 13A clause (d) of the Income Tax Act.

Congress asked for a stay on this demand, but the tax officer refused because the party did not deposit 20% of the disputed amount. Congress then appealed to the CIT(A), but the appeal was dismissed.

The Congress Party then approached ITAT and filed a stay application. While the appeal was pending, the tax department asked for recovery under Section 226(3), and bank drafts totalling Rs 65.88 crore were obtained and later encashed.

Congress argued before ITAT that the recovery was harsh, especially with elections approaching, and that its case was strong. But the ITAT said the party had delayed earlier steps, taken repeated adjournments, and seemed to have violated Section 13A. So the ITAT refused to grant a stay.

ITAT further rejected the stay application and observed that prima facie violations under Section 13A appeared to exist.

Congress then went to the Delhi High Court. The High Court said the ITAT had properly looked at the issues and given a prima facie view, which is all that is required when deciding a stay. The Court also noted that Congress itself had been slow to act since 2021.

The Court also highlighted that Rs 65.94 crore had already been recovered from the party. So the party could file a new stay application before the ITAT, which must consider the changed situation.

Congress then approached the Supreme Court. On August 20, 2024, the Supreme Court issued notice and clarified that the ongoing case would not stop the ITAT from deciding the main appeal. Later, on September 16, 2025, the Supreme Court fixed December 5, 2025, to hear the dispute about the tax exemption.