New Delhi: Solicitor General Tushar Mehta on Monday submitted before the Supreme Court that the Income Tax department will not take any steps to recover Rs 3,500 crores from the Indian National Congress (INC) till the Lok Sabha elections are over. Mehta stressed that the government will not take any coercive steps so that there is no problem for the political party during the election.

A bench led by Justice B V Nagarathna was hearing a plea by the Indian National Congress against a demand of Rs 3,500 crores from the Income Tax department.

Mehta, representing the Income Tax department, said that there is a demand of approximately Rs 3,500 crore and submitted that the department will not take coercive steps till the elections are over. Senior advocate A M Singhvi, representing the Congress party, said that the court should record Mehta's statement.

The apex court noted that the Congress party sought an urgent hearing of the application since there were several demands in March and recorded in the order that at the beginning of the hearing Mehta submitted that there is no dispute that for several dates in March 2024, demands have been made for approximately Rs 3,500 crores.

The bench noted that the IT department does not wish to precipitate the matter and that no coercive steps will be taken with regard to Rs 3,500 crores approx. The apex court has scheduled the matter for further hearing in July.

The bench, also comprising justice Augustine George Masih, recorded Mehta’s statement that no precipitative action will be taken in the prevailing circumstances till the final adjudication of the matter.

During the hearing, Mehta said that the petitioner is a political party and based upon the 2016 judgment, which is under challenge, “we have raised the demand of Rs 1700 crore”. Citing the upcoming Lok Sabha election, Mehta said, “we would not like any problem to arise for any party and therefore, till the matter is heard after the election, we will not take any action for recovery of Rs 1700 crore."

Senior advocate Abhishek Singhvi, representing the Congress party, appreciated the gesture terming it "gracious". "I am very rarely rendered speechless. By my learned friend's (Mehta) intervention, I have been rendered speechless. Kindly have it in July," he said. Singhvi cited that all demand notices were issued in February and March for different years totalling Rs 3500 crore approximately.

Mehta said that the impugned judgment of the Delhi high court is of March 2016, and based upon the parameters set by it, a tax demand was raised against the party in 2021. Mehta added that they were given an option to pay 20 per cent of that demand but they did not avail and as a result in 2024, we recovered Rs. 135 crore of 2021 demand and based upon the same parameters, now we have issued a demand of Rs 1700 crore approximately.

Mehta stressed that the I-T department has a lot to say on the merit of the issue and they would like to file a reply to the main petition filed against the high court's verdict.

The apex court asked if he meant to keep the demand raised in abeyance. Mehta said, "No, I don't want to keep the demand in abeyance. I am saying that please record my statement that till the matter is heard in the second week of June or whenever, we will not take any coercive steps with regard to the demand raised".

Singhvi pointed out that in March several tax demand notices were issued and the amount is not Rs 1700 crore but about Rs 3500 crore approximately for a block of five years. "At the commencement of the hearing on this application, the solicitor general appearing for the respondent department, submitted that there is no dispute that on several dates in the month of March 2024, demands have been raised as against the appellant herein totalling approximately Rs 3500 crore," the bench noted.

It further recorded, "It is further submitted (by Mehta) that issues which arise in these appeals are yet to be adjudicated upon but having regard to the situations now, the department does not wish to precipitate the matter as much as no coercive steps shall be taken by the respondent department with regard to the aforesaid demand of Rs 3500 crore approximately." The bench has scheduled the Congress party’s plea against different tax demand notices for hearing on July 24, 2024.