I-T sleuths freeze Congress bank accounts, tribunal unfreezes

New Delhi: The Congress' main bank accounts were frozen on Friday over an income-tax demand of Rs 210 crore, but in relief to the party, which said the move had impacted all political activity, an I-T appellate tribunal later allowed it to operate them pending a further hearing next week. The tax tribunal, however, told the Congress that there will be a Rs 115 crores lien on the bank account.

Party leader Vivek Tankha, who appeared before the tribunal against the order, said he told the tribunal that the Congress will not be able to participate in the "festival of elections" if its accounts remain frozen.

The tribunal will hear the matter next Wednesday before a final decision is taken on the matter. In effect, the Congress will be allowed to operate its accounts but will have to keep a minimum balance of Rs 115 crore.

Congress treasurer Ajay Maken, who had earlier addressed a press conference to announce that the income-tax authorities had frozen its accounts, said the tribunal has put a lien of Rs 115 crore on its accounts and the party has been allowed to spend over and above that.

"On our petition, the income-tax department and the income-tax appellate tribunal (ITAT) said that we have to ensure that Rs 115 crore have to be kept in the banks. This Rs 115 crore is the lien marked in the bank accounts," Maken said while detailing the tribunal order.

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

"This means that Rs 115 crore have been frozen. This Rs 115 crore is much more than we have in our current accounts," he added.

The Congress treasurer had earlier said the freezing of its accounts on "flimsy grounds" had affected all political activity of the party barely two weeks before the general election was announced.

The accounts, including those of the Indian Youth Congress, were frozen on an income-tax demand of Rs 210 crore for 2018-19, an election year, Maken said.

According to him, the party filed its I-T returns for the concerned year a few days late and that is why this action was taken.

The matter, he said, also pertains to 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. Maken also said the I-T authorities' orders freezing the accounts had come on Wednesday.

While Maken said four main bank accounts were frozen, sources later put the number at nine. The party was unable to use even the funds received under its crowdfunding scheme, Maken said at the press conference.

Several party leaders, including party president Mallikarjun Kharge and former party chief Rahul Gandhi, expressed their outrage and alleged that the government's move was an attack on democracy.

Terming the government "power drunk" for freezing the accounts of India's largest Opposition party just before the Lok Sabha elections, Kharge said in his post on X that it was a "deep assault" on democracy.

The unconstitutional money collected by the BJP will be utilised by them for elections, but the money collected by the Congress through crowdfunding shall be sealed, the party president said.

"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," the Congress president said.

"Don't be afraid Modi ji, the Congress is not the name of the power of money but of the power of people... We have never bowed before dictatorship, nor will we ever bow down," Gandhi said.

"Every Congress worker will fight tooth and nail to protect India's democracy," he added, using the hashtag "#DemocracyUnderAttack".

"Not just the Congress party's accounts, but India's democracy has been frozen," Congress’s organisational general secretary K.C. Venugopal said.

Pointing out that the government's dictatorial attitude came barely a month before the 2024 elections, Venugopal made a reference to the Supreme Court scrapping the electoral bond scheme for political funding on Thursday.

"When one avenue to tilt the balance was struck down by the courts yesterday, the government has chosen a new route now."

"The BJP has hoarded over Rs 6,500 crore through the illegal electoral bond scandal, which remains untouched, but the earnest donations of ordinary INC workers and supporters are frozen," he said on X, adding that the party will fight "this new assault on democracy tooth and nail."

The BJP rubbished as a lie the Congress' allegation that the government was behind the income-tax department freezing its bank accounts, claiming that the more it is defeated in polls, the more belligerent it has become in "showering abuses" on Prime Minister Narendra Modi and the ruling party.

Speaking to reporters, BJP leader and former Union minister Ravi Shankar Prasad said the I-T action was a routine process as the Congress had not followed due procedure in either filing taxes or adhering to rules and regulations regarding appeal.

"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," he said.