‘IT penalty of Rs 135 cr on us … For what? Doesn’t IT want democracy to survive?’: Congress
Rajya Sabha MP Vivek Tankha who represented the Congress before the Income Tax Appellate Tribunal on Friday after its accounts were frozen says, “If you are choking us completely, then the Congress will be out of elections … I asked whether the IT Department doesn’t want democracy to survive in India.”
In an interview, Tankha talks about the case against the party, what he told the tribunal, and the legal options before the party. (Photo: X/@VTankha)
Senior advocate and Rajya Sabha MP Vivek Tankha appeared before the Income Tax Appellate Tribunal (ITAT) on Friday to argue against the Income Tax Department’s decision to freeze the Congress’s main bank accounts on February 14. In an interview, he talks about the case against the party, what he told the tribunal, and the legal options before the party.
The Congress on Friday announced that Income Tax authorities had frozen its main bank accounts. What is the dispute about?
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There was an assessment for the financial year 2018-’19. That assessment was completed with an addition of approximately Rs 103 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.
What did you tell the Income Tax Appellate Tribunal?
My first argument was that when we have approximately Rs 210 crore in our accounts and the claim is for Rs 135 crore, why should you freeze all the accounts? You cannot freeze more than what we owe you finally, even if we don’t succeed in winning the appeal.
Secondly, I said elections are a festival of democracy. We, the Congress, are one of the largest stakeholders of this festival. And on the eve of the festival, if you are choking us completely, then this stakeholder will be out of that festival. So, I asked whether the IT Department doesn’t want democracy to survive in India.
Thirdly, I said the Congress had an income of approximately Rs 199 crore. We had an approved expenditure of Rs 197.5 crore. We had a surplus of Rs 1.5 crore. So, set aside the entire return and reject everything that I have done and say that the whole thing is taxable, it is a disproportionate action. And for what? They are saying we were 15 days late. In my view, we were not late. My date was till March 31. I filed it in early February. That is the issue. Whether we were late or not. Even if I were late, there is a concept of real income and expenditure without any exemptions. When all that has happened, how can you do this? It is a disproportionate penalty of Rs 135 crore … For what? What have we done? If this is not choking, then what is choking?
Since when has this dispute been going on?
In 2021, there was an order by the Assessment Officer. Then we filed an appeal before the Appellate Commissioner, which was decided in early 2023, against which we filed an appeal before ITAT in May 2023. I told the Tribunal that as an Additional Solicitor General when I used to appear for the Income Tax (Department), Chief Justice (S H) Kapadia would always tell me that an assessee had practically no real opportunity in the first stage and second stage. That is when you are before departmental officers. The first independent opportunity comes only when you come before ITAT. I cited this and told the Tribunal that it is my first independent opportunity for justice.
What did the appellate tribunal say?
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We sought a stay on the order freezing our accounts and sought their de-freezing … told them that we would only maintain a lien. So the Tribunal agreed … We have to maintain a minimum account. They said Rs 115 crore would be the lien. We can operate our accounts. The tribunal will hear the matter next Wednesday before a final decision is taken on the matter.
What does this mean for your daily operations?
On Wednesday, they (the tribunal) will hear the interim application and decide what terms and conditions have to be imposed. That crisis of not being able to operate our accounts is over.
What will be your legal option if the tribunal rules against you?
We will approach the High Court. But we are hopeful that we will get a good order in ITAT. It was very gracious of the Tribunal to have intervened in favour of the assessee and allowed us to operate the bank accounts. We are an over 130-year-old party. And we are one of the biggest stakeholders in the current elections. Can you have the festival of democracy without the Congress?
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The bank accounts were frozen a day before the Supreme Court verdict on electoral bonds …
The government is only getting bad publicity. They are not getting good publicity.
Manoj C G currently serves as the Chief of National Political Bureau at The Indian Express. A veteran journalist with a career spanning nearly two decades, he plays a pivotal role in shaping the publication's coverage of India's political landscape.
Experience & Career: Manoj has built a robust career in political journalism, marked by a transition from wire service reporting to in-depth newspaper analysis.
The Indian Express (2008 – Present): He joined the organization in 2008 and has risen to lead the National Political Bureau, overseeing key political coverage.
Press Trust of India (PTI): Prior to his tenure at The Indian Express, Manoj worked with India’s premier news agency, PTI, honing his skills in breaking news and accurate reporting.
Expertise & Focus Areas: As a seasoned political observer, Manoj focuses on the nuances of governance and party dynamics.
National Politics: extensive reporting on the central government, parliamentary affairs, and national elections.
Political Strategy: Deep analysis of party structures, coalition politics, and the shifting ideologies within the Indian political spectrum.
Bureau Leadership: directing a team of reporters to cover the most critical developments in the nation's capital.
Authoritativeness & Trust: Manoj’s authoritativeness is grounded in his nearly 20 years of field experience and his leadership role at a legacy newspaper. His long-standing association with The Indian Express underscores a reputation for consistency, editorial integrity, and rigorous reporting standards required of a Bureau Chief.
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