‘IT penalty of Rs 135 cr on us … For what? Doesn’t IT want democracy to survive?’: Congress

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?

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?

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.