Citing tax dues, I-T freezes Congress accounts, party calls it vendetta

While there was no official statement from the I-T department on its action involving Congress bank accounts, official sources maintained “it was a routine process against anyone who has not paid income tax dues for years” and “The I-T department did exactly what it will do to an ordinary citizen if he or she fails to pay income tax dues”.

AICC treasurer Ajay Maken, who told a press conference about the I-T action, later posted on X copies of a letter the I-T department had purportedly written to two banks where the Congress and the Youth Congress have accounts.

He said the letter stated that Rs 135 crore and Rs 75 crore were due from the Congress and directed the banks to “pay to me forthwith any amount due from you to or, held by you, for or on account of Bank Account No… and any other bank account/fixed deposit with your bank in the name of Indian National Congress up to the amount of arrears shown above.”

Maken said, “All our bankers are being sent this… Is this not attaching/seizing/freezing our accounts?”.

Pawan Khera, chairman of the Congress media department, also took to X, posting an I-T letter to a bank, and said, “After targeting and freezing the accounts of @INCIndia & @IYC, it is now the turn of Delhi Pradesh Congress Committee.  @INCDelhi just received this notice from the @IncomeTaxIndia department.”

The Congress said four of its main bank accounts were frozen on Wednesday and Thursday.

Speaking to The Indian Express, Congress Rajya Sabha MP and lawyer Vivek Tankha, who appeared before the ITAT Friday, said the tax dispute had been going on for a couple of years.

Maken told the press that the I-T department had demanded a recovery of Rs 210 crore on the basis of Income Tax returns filed for 2018-19 and the first reason given was that the accounts were submitted after a 45-day delay.

Secondly, there was also a discrepancy in cash receipts of Rs 14.4 lakh given to the party by its MLAs and MPs as donations made from their salaries in 2018-19.

The Congress turned the freezing of accounts into a political issue with the Youth Congress holding street protests. The party has decided to hold demonstrations outside Income Tax department offices across the country Saturday.

Maken said, “We got information two days ago that cheques being issued by us were not being honoured by banks… We don’t have money to pay electricity bills, pay salaries to our employees.”

Tankha, meanwhile, approached the ITAT and appeared before it through video-conferencing. The ITAT allowed the Congress to partly operate its accounts and posted the matter for hearing next Wednesday.

Maken said, “On our petition, the Income Tax department and the ITAT has said that we have to ensure that Rs 115 crore have to be kept in the banks. This 115 crore is the lien marked in the bank accounts. We can spend an amount over and above that. This means that Rs 115 crore have been frozen. This Rs 115 crore is much more than we have in our Current Accounts.”

Tankha said the dispute pertains to assessment in the financial year 2018-19. He put the tax demand figure at Rs 135 crore.

“That assessment was completed with an addition of approximately Rs 102 crore plus interest, which came to Rs 135 crore. And that assessment had been upheld by the Commissioner of Income Tax (Appeals). We appealed against that in the Income Tax Appellate Tribunal in May 2023. It was pending a hearing and the date for final arguments is fixed in April. In between, on February 14, they froze all our bank accounts. Notices were sent to bankers to freeze all the transactions. On that day, we had approximately Rs 210 crore in our accounts,” he said.

Tankha said he told the tribunal that the Congress would not be able to participate in the “festival of elections” if its accounts remained frozen. The tribunal will hear the matter next Wednesday before a final decision is taken on the matter.

Kharge, Rahul Gandhi and several senior leaders expressed outrage over the action of freezing its accounts.

“A power-drunk Modi government has frozen the accounts of the country’s largest Opposition party, the Indian National Congress, just before the Lok Sabha elections. This is a deep assault on India’s democracy. The unconstitutional money collected by the BJP would be utilised by them for elections, but the money collected by us through crowdfunding shall be sealed. That is why, I have said that there won’t be any elections in the future. We appeal to the judiciary to save the multi-party system in this country and protect India’s democracy,” Kharge said.

Rahul Gandhi said, “Don’t be afraid, Modi ji. Congress means the power of people and not the power of money. 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.”

AICC general secretary K C Venugopal said, “Not just the Congress party’s accounts, but India’s democracy has been frozen.”