I-T action on Congress accounts kicks off row
The Congress said it could not access accounts on Feb 13-14, resolved after approaching the Income Tax Appellate Tribunal (ITAT) on Feb 14.
The Congress on Friday claimed its bank accounts were “frozen” over a pending tax dispute, but said later in the day that they had been “unfrozen”, although tax officials familiar with the matter who asked not to be named insisted that what the Congress termed freezing was the placing of a lien on the accounts, which they added was standard procedure in tax recovery cases.
The Congress said it was unable to operate its accounts on February 13 and 14 -- and that this was lifted after it approached the Income Tax Appellate Tribunal (ITAT) on February 14. According to Congress member Vivek Tankha, a Rajya Sabha MP who represented the party before the tribunal on Friday, he was told by ITAT that there would be no freeze, but that there was a lien. The ITAT will next hear the Congress’s petition in the matter on February 21, he added.
A lien is a sort of a hold on an amount that is owed. In this case, the Income Tax department has a lien of ₹115 crore on the Congress’s accounts that was put through two letters sent by the department the managers of Bank of Baroda and State Bank of India on Tuesday, according to documents shared by party treasurer Ajay Maken on Friday. While Maken said the Congress did not have “ ₹115 crore in any bank account” and that it would have to encash some of its fixed deposits, a lien can be made on both current and savings account deposits as well as fixed deposits.
“We approaches the ITAT this (Friday) afternoon and the arguments were held in the open court between us and the Department of Revenue,” said Tankha. “The tribunal has allowed us to operate our accounts with lien.”
HT reviewed the ITAT order which said the Income-Tax department did not ask banks for freezing transactions in the accounts of assessee but for a lien. “The Revenue does not claim to have issued any order or direction to the concerned bank(s) for freezing the transactions in the bank account(s), but only for a lien on the amount lying in the bank account(s) up to the outstanding tax demand and sought time to file a status report. In the light of the aforesaid, adjourned at the request of the learned representative for the applicant to 21st February, 2024 for arguments on the stay petition,” the order passed by judicial member Anubhav Sharma and vice president GS Pannu said.
The tax officials cited in the first instance said the case pertains to the Congress’s tax dues of assessment year (AY) 2018-19 . The initial due to the tax department was ₹103 crore, and ₹32 crore was added to this on account of interest. The tax due was reassessed at ₹105 crore on July 6, 2021.
After this, the tax officials said, the Congress appealed before the Commissioner (Appeals) but did not pay the mandatory 20% of the tax due to initiate the appeal. It paid only ₹78 lakh, prompting the commissioner to dismiss the plea. The Congress, the officials added, then appealed Commissioner (Appeals) again in May 2023, and in October, paid ₹1.72 crore. They pointed out that the Congress has not applied for any stay on the tax demand in its appeal.
The Congress showed around ₹198 crore as revenue in 2018-19 and ₹197 crore as expenditure, Tankha said in a video uploaded on Friday afternoon, in which he also termed the tax demand “disproportionate”.
The Congress has said that the case relates to a delay of 45 days in filing its income tax return (ITR) in FY18-19 and an alleged cash collection of ₹14 lakhs from its MPs and MLAs — their one month’s salary. It claimed that all 11 accounts including two accounts of its youth wing were frozen.
According to Maken, the party realised this when some cheques issued by the Congress party bounced. “We enquired with the bank and got to know that our accounts have been frozen,” Maken added. The tax officials said that when there is a lien, that amount cannot be used, and that this is what happened in the Congress’s case.
Congress president Mallikarjun Kharge launched a political attack on the BJP. “Intoxicated with power, the Modi government has frozen the accounts of the country’s largest opposition party -- the Indian National Congress -- just before the Lok Sabha elections,” he tweeted.
“This is a deep blow to democracy. The unconstitutional money that BJP has collected will be used in the elections, but the money we have collected through crowdfunding will be sealed. That is why we have said that there will be no elections in future! We appeal to the judiciary to save the multi-party system in this country and secure India’s democracy. We will take to the streets and fight strongly against this injustice and dictatorship,” he added.
Congress leader Rahul Gandhi also hit out at the Prime Minister and said, “Don’t be afraid Modi ji, Congress is not the name of power of money but of power of people. We have never bowed down before dictatorship, nor will we ever bow down. Every Congress worker will fight tooth and nail to protect India’s democracy.”
But the BJP hit back.
“The BJP has nothing to do with it at all. It is a routine I-T process. We condemn the palpable lies being made out by the Congress,” BJP leader Ravi Shankar Prasad told reporters in New Delhi.
