I-T department de-freezes Congress bank accounts after party argues it was frozen on ‘flimsy grounds’

Vivek Tankha said that he appeared before the ITAT and it ordered that the party could operate its accounts with a lien of the department.

BySouth First Desk

Published Feb 16, 2024 | 4:18 PM ⚊UpdatedFeb 16, 2024 | 6:46 PM

Congress account frozen

Ajay Maken addressing a press conference.

Hours after freezing the main bank accounts of the Congress, the Income Tax (IT) department allowed the grand old party to operate its accounts on Friday, 16 February.

Congress Rajya Sabha MP Vivek Tankha said that he appeared before the Income Tax Appellant Authority (ITAT) in Delhi, and after hearing his arguments, the agency ordered that the party could operate its accounts with a lien of the department.

“I said that we have a very good case on hand. We have filed all the taxes on time. It has been misconceived, and only for that reason we can’t be punished disproportionately,” said Tankha, describing his meeting with ITAT.

The tribunal will hear the matter next Wednesday before a final decision is taken on the matter.

Meanwhile, DMK leader and Lok Sabha MP Kanimozhi on Friday strongly criticised the freezing of the bank accounts, claiming it reflects BJP’s fear of engaging in the electoral process democratically.

The account freezing

Tankha said he told the tribunal that the Congress would not be able to participate in the “festival of elections” in case its accounts remain frozen.

Earlier in the day, Congress treasurer Ajay Maken had announced that the IT department froze the Congress’ main bank accounts on “flimsy grounds”.

He said that the freezing affected all political activity of the party barely two weeks before general elections were announced.

“The party is unable to use even the funds received under its crowdfunding scheme”, Maken said at a press conference and alleged that democracy was in danger in the country.

Maken said four main bank accounts were frozen. Sources later put the number at nine.

The revocation of the bank account freezing comes amidst the Congress uproar claiming that if any accounts were to be frozen, it was that of the BJP for earning massive amounts of funds through “unconstitutional” electoral bonds.

The tribunal order

Maken said the tribunal has put a lien of ₹115 crore on its accounts and the party has been allowed to spend over and above that.

Maken, who said democracy was in danger in the country, detailed the tribunal’s order.

“On our petition, Income Tax Department and the Income Tax Appellate Tribunal (ITAT) has said that we have to ensure that ₹115 crore have to be kept in the Banks. This ₹115 crore is the lien marked in the Bank Accounts,” he said.

“We can spend an amount over and above that,” he said in a post on X using the hashtag “#DemocracyFrozen”.

“This means that ₹115 crores have been frozen. This ₹115 crore is much more than we have in our Current Accounts,” he explained.

According to him, the party filed its Income Tax returns for the concerned year a few days late and that is why this action. The matter, he said, also pertains to a discrepancy in cash receipts of ₹14.4 lakh given to the party by its MLAs and MPs as donations made from their salaries.

The party was unable to use even the funds received under its crowdfunding scheme, Maken said at the press conference.

Also Read: Transparency is hallmark of ECI, say poll panel after SC verdict on electoral bonds

Questions the action

The accounts, including that of the Indian Youth Congress, were frozen on an Income Tax demand of ₹210 crore for 2018-19, an election year, Maken said.

According to him, the reason for the action was the party filing its Income Tax return for the concerned year a few days late. He said the IT authorities’ orders freezing the accounts had come on Wednesday.

“For the first time in the country’s history, accounts of the principal Opposition party have been frozen by the tax authorities on flimsy grounds, barely two weeks before the announcement of general elections,” Maken told reporters.

Congress president Mallikarjun Kharge said in a post on X, “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,” he added.

Warns of protest

They would utilise the unconstitutional money collected by the BJP for elections, but the money collected by the Congress through crowdfunding shall be sealed, the party president said.

“That is why I have said 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,” the Congress president said.

He said they would take to the streets and wage a strong fight against this autocracy.

Echoing the party chief, Maken appealed to the judiciary to save democracy as it was in danger and said the country is headed towards “one-party democracy”.

He said the party has already appealed to the Income Tax appellate authority and hoped for justice. The party will otherwise make an appeal before the judiciary, Maken said.

‘Reflects fear of BJP’

“I strongly condemn the freezing of the Congress and Youth Congress bank accounts mere weeks before the elections in India, the largest democracy. This action unmistakably reflects a fear of the BJP engaging in the electoral process democratically,” Kanimozhi said in a post on social media platform X.

Meanwhile, addressing a public meeting at Ottapidaram in her Thoothukudi constituency on Thursday, she said the opposition INDIA bloc will win the upcoming Lok Sabha polls.

“India will lose if BJP retains power. Their victory is this country’s loss,” she remarked.

Though the BJP is now claiming it would win over 400 seats in the hustings, “we have to be confident that there will be a regime change,” she said and referred to the saffron party’s loss in recent state elections including Karnataka and Himachal Pradesh.

She also pointed out that the BJP received over ₹6,000 crore in electoral bonds, as revealed in RTIs.

On Thursday, the Supreme Court scrapped the Union government’s electoral bonds scheme of anonymous political funding, calling it “unconstitutional” and ordering disclosure of the bond’s donors, amounts and recipients by 13 March.

(With PTI inputs)

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