Counsel for Congress S C Aggarwal on Wednesday told a division bench comprising Justice Arun Kumar and Justice Manmohan Sarin that the party proposed to withdraw the pleas.

The court allowed the withdrawal after I-T department counsel R D Jolly stated that the department had no objection if the party wanted to withdraw the cases.

The department had issued notice to the party under Section 148 of the Income Tax Act on March 9 asking it to explain reasons why it had not filed the tax returns, which was challenged by the party.

The court on March 19 directed the department to place before it a report on income tax returns filed by the party till this year and any action taken report in this regard.

Thedepartment in its action taken report gave a detailed account of the donations received by the party from 1986-87 onwards which had escaped assessment.

"The taxable income has escaped assessment for the failure of the party to furnish full and correct particulars of income," the report stated.

The I-T department started investigation against the party after a petition was filed about two years ago in the High Court seeking prosecution of the then party treasurer Sitaram Kesri and other office bearers for allegedly getting money from abroad in "violation" of Foreign Contribution Regulation Act (FCRA) during 1993-94.

The FCRA cell, however, had stated that there was no violation of FCRA as majority of shareholders of the companies which contributed the money, were owned by NRIs.

The I-T department report said the party in its tax returns for 1993-94 filed in 1996 had claimed exemption under Section 13A of the act stating its income during that year was "nil".

As per the provisions of Section 13a ofthe act, the party had to furnish audited accounts on an all India basis, complete books of accounts and supporting documents in respect of such accounts which would enable the accounting officer to properly deduce the income of the party, the report said.

Besides, the party was supposed to furnish complete list of donors with their names and addresses in respect of all voluntary contributions in excess of Rs 10,000, it said.

It said exemption is available only on the "satisfaction" of these conditions, while the party has shown a total income of Rs 3.16 crore for 1993-94.

"There are reasons to believe that the income has escaped assessment within the meaning of Section 147 of the Act," the report said.

Meanwhile, Congress in a statement said after I-T department gave reasons for issuance of the notice to the party "all requisite details were submitted and for all the eight years the assessment was framed raising nil demand on Indian National Congress."

"Thus, as the cause of grievance wasredressed, the writ (filed by the Congress) became infructous and was withdrawn," the statement said.

The party said it had been requesting the I-T department to furnish the reasons for issuing notices under Section 148 of Income Tax Act which the department was required to supply to it.

"In spite of repeated reminders the reasons were not supplied and the Indian National Congress was forced to approach the High Court," the statement said.The court had directed the I-T department to supply the reasons forthwith, the statement said.