The tribunal rejected the party’s claim for tax exemption under Section 13A due to late return filing and violations of cash donation limits, establishing strict compliance requirements for political parties seeking tax benefits.
“All these assessee’s (Congress) vehement submissions fail to evoke our concurrence,” ruled the quorum of judicial member Satbeer Singh Godara and accountant member M Balaganesh.
Referring to a leading Supreme Court judgment and a March 2016 high court ruling, the tribunal in its July 21 ruling held that an exemption mentioned in a tax statute must be “strictly complied with”.
The 50 page ITAT order referring to the two rulings (SC and HC) said “this is for the precise reason that so far as an interpretation of such an exemption provision in a fiscal statute is concerned”, not only the high court has made it clear “that Section 13A has to be strictly complied with” but also the Supreme Court in a 2018 ruling “has settled the issue that it is not liberal but stricter interpretation only in a taxing statute which has to be employed in an exemption claim”.
Dismissing Congress’s appeal, the tribunal held “that being the case and in light of the fact that even Section 139(4B) has stipulated filing of return within the ‘due’ date i.e. required to be furnished u/s 139(1), we are of the considered view that the above former clause in fact restricts any further liberalism herein as clearly incorporating the expression of ‘due’ date”. “Therefore, the moment there is violation of such a ‘due’ date, Section 13A third proviso gets attracted, so as to result in denial of exemption to the party concerned,” the order said.
