Left parties receive notices from Income Tax department for tax violations

A PTI report courting sources said that the department has asked them to pay “dues” of ₹11 crore.

The Income-Tax department in July 2022 served a notice to CPI(M) withdrawing the tax exemption of the Communist Party of India (Marxist) for the year 2016-17 and taxed the Left party ₹15.59 crore for not declaring a bank account in its tax returns for the year. File | Photo Credit: The Hindu

The Communist Party of India (CPI) reportedly has been served a notice by the Income-Tax department for violation of its procedures after two of its State units were found using old Permanent Account Number (PAN) cards for filing income-tax returns.

A PTI report courting sources said that the department has asked them to pay “dues” of ₹11 crore. Though a top CPI leader stated that the notice does not mention any sum. He further said that the party is consulting its lawyers to challenge the notice.

The Income-Tax department in July 2022 served a notice to CPI(M) withdrawing the tax exemption of the Communist Party of India (Marxist) for the year 2016-17 and taxed the Left party ₹15.59 crore for not declaring a bank account in its tax returns for the year.

The sources said the CPI(M) had received a notice under Section 148A of the Income Tax Act for assessment year 2016-17 on the ground that it was maintaining a bank account but had not declared it in column 13(b) when it filed its tax returns.

However, the department passed an order under section 148A(d) of Act, rejecting the party’s submission, and reopened the case by issuing a notice under section 148.

The CPI(M) has claimed that it had filed its income tax returns in compliance with the notice and submitted various submissions from time to time, and that not mentioning the bank account was an “oversight” on its part.

The Left party received a show-cause notice last year, proposing to disallow the claim of exemption made under Section 13A of the Act. It had requested for extension of time, which was not granted.

The sources said the I-T department has passed a final order and levied a tax of ₹15.59 crore on the CPI(M) for 2016-17.

They added that the CPI(M) has filed a writ petition against the order in the Delhi High Court and the matter is sub-judice. The court has issued a notice to the I-T department and directed it not to take any precipitate action, the sources said.

With inputs from PTI