IT dept freezes Congress' bank accounts, appellate tribunal de-freezes them later

The Congress' main bank accounts were frozen on Friday over an income tax demand of Rs 210 crore but an I-T appellate tribunal later allowed it to operate them pending a further hearing next week, a huge relief for the party which said the move had impacted all political activity.

Congress treasurer Ajay Maken, who had earlier addressed a press conference to announce that 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.

Party leader Vivek Tankha, who appeared before the tribunal against the order, said he told the tribunal that the Congress would 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.

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.

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 Rs 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 Rs 115 crores have been frozen. This Rs 115 crores is much more than we have in our Current Accounts," he explained.

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 general elections are announced.

The accounts, including that 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 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 Rs 14.4 lakh given to the party by its MLAs and MPs as donations made from their salaries.

He said the IT 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.

Kharge, Gandhi and general secretary (organisation) K C Venugopal spoke out in posts on X.

"Don't be afraid Modi ji, Congress is not the name of 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".

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 that it was a "deep assault" on democracy.

The unconstitutional money collected by the BJP would 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.

"Not just the Congress party's accounts, but India's democracy has been frozen," 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. 6500 crore through the illegal electoral bond scandal, which remain untouched - but the earnest donations of ordinary INC workers and supporters are frozen," he said on X.

He added that the party will fight "this new assault on democracy tooth and nail".

On Thursday, the Supreme Court said the Centre's electoral bonds scheme was "unconstitutional" and ordered the disclosure of the bond's donors, amount and recipients by March 13.