NEW DELHI, Nov 12 (TOI) : The Income Tax Settlement Commission has levied a penalty of nearly Rs 57 crore on Congress spokesman Abhishek Manu Singhvi after the Rajya Sabha MP failed to furnish documents supporting his claims of expenditure for running his office.

The Settlement Commission, which is a dispute resolution entity which a taxpayer can approach once, rejected Singhvi's plea for immunity from prosecution, while levying penalty at 100% of the tax attributable to income for assessment years 2010-11 to 2012-13. Singhvi had approached the panel on his own.

"The very operation of the order of the Settlement Commission (SC), being bandied around, has been stayed by the high court. Thus, in law, no order exists and none is operative," Amit Bhandari, an authorized representative of Singhvi, said in a statement.

The Jodhpur income tax commissioner, who looked into the case, found high cash withdrawals from Singhvi's accounts, which ranged from around Rs 7 crore to Rs 32 crore. The noted lawyer said these were for paying fees to legal assistants, some of which involved cash payments, said sources.

During financial year 2010-11, the tax department — which raised concerns over the genuineness of the claims — noticed expenses of over Rs 16 crore under this head, but no lists were given. The department also noticed that a majority of the payments were made between January and March. In 2011, for instance, there were over 18,000 vouchers of which 1,200 were dated March 31. "The amount of expenses claimed for the assessment year is quite unreasonable for a senior professional lawyer," the tax department claimed before the Settlement Commission.

Singhvi could not produce the vouchers for this period arguing that termites, which attacked his counsel Mayank Gupta's office, had chomped off the records. The tax department, sources said, argued that this was a ploy not to produce the papers.

Similarly, for assessment year 2012-13, the Congress spokesperson had claimed fee and subscription of around Rs 75 lakh, fee for legal assistance of around Rs 8 crore and spending related to books and journals of another Rs 75 lakh. Another Rs 1.5 crore was claimed as expenses for printing and stationery. While he submitted a list of names and cheque details of several persons to whom payments were made, most of the summons issued by the tax department were returned and records relating to a "negligible" amount could be confirmed.

Similarly, Singhvi claimed that he had purchased laptops worth Rs 5 crore, on which he claimed Rs 1.5 crore as depreciation benefit. The tax department estimated that based on average cost of Rs 40,000 for a laptop, the lawyer would have purchased 1,250 laptops for 14 advocates and professionals hired by him.

Singhvi offered to pay tax on 75% of the gross professional fee, besides withdrawing the Rs 1.5 crore depreciation claimed on laptops. The tax department argued that senior Supreme Court lawyers disclose 95% of their gross professional fee for tax.

The Settlement Commission ruled that for the three assessment years, the tax department should levy tax on 90% of the gross professional receipts after allowing 10% as reasonable expenses against professional expenditure, said a source.

On Tuesday, Singhvi's office said the "Settlement Commission has added over Rs 91.95 crore to his declared professional income over a three-year period and slapped a penalty of Rs 56.67 crore".

Commenting on Singhvi's behalf, Bhandari said there was no issue regarding wrongful receipts as "100% receipts are admittedly by cheque. Even the allegation (wrongly) made is only of inflated expenses claimed."

The Settlement Commission order was received by Singhvi in the last week of September after which he approached the Jodhpur bench of Rajasthan HC which stayed the order passed on September 11.