Filing Return By Due Date U/s 139 Is Mandatory For Political Party To Claim Exemption U/s 13A: Delhi ITAT Refuses To Stay Recovery Against Congress Party

While holding the argument that an assessee is entitled to a stay on the recovery proceedings on payment of 20% of the demand during the pendency of appeal before the Tribunal, as too general, the New Delhi ITAT dismisses the stay application of Indian National Congress treating it as meritless. At the same time, on the merits of the matter, the ITAT ruled that compliance with the conditions prescribed in Section 13A regarding furnishing of return by due date as per Section 139 is mandatory for a Political Party in order to be eligible for the claim of exemption u/s 13A of the Income tax Act. This exemption was denied on two grounds, namely: i) that the return of income filed by the assessee on Feb 02, 2019 u/s 139 contravenes the time limit prescribed in the third Proviso to Section 13A; and ii) that clause of the first Proviso to Section 13A was violated since the assessee has received donations of Rs.14,49,000/- in cash from various persons, which was in excess of Rs.2,000/-. The Bench took note of the amendments made in Section 13A by the Finance Act, 2017, and a clarification issued by the CBDT dated 23rd April, 2019 clarifying that the time allowed for filing of return of income as per the newly inserted clause for the trusts was the time allowed to file belated returns under Section 139 of the Act. The “due date” for furnishing a return of income is prescribed in Section 139 read with Explanation thereof, whereas the “time allowed” for furnishing a return of income is prescribed in Section 139 of the Act, which permits filing of the belated returns”, added the Bench.