Frozen Bank Accounts: Congress Gets Temporary Relief, Withdrawals to be Cleared by ITAT

Congress Bank Accounts Frozen: Ajay Maken, senior leader of the Indian National Congress (INC) on Friday alleged that the party's bank accounts were frozen by the Income Tax (IT) Department, adding that the Youth Congress party's bank account was also frozen. The Congress, however, has been provided interim relief until the next hearing, and can operate its accounts with a lien on the account, said the party's member of Parliament Vivek Tankha. In the period, any withdrawals will be decided by ITAT. The hearing for the interim relief will be held on Wednesday.

“We got information yesterday that banks are not honouring the cheque we are issuing. On further investigation, we got to know that the Youth Congress bank accounts have been frozen,” the All-India Congress Committee (AICC) treasurer Ajay Maken said in a press conference earlier today.

"Just two weeks before (Lok Sabha) elections when the Opposition's accounts are frozen, it is equivalent to freezing the democracy...," Maken, who is also a member of the Congress Working Committee (CWC), said.

"Right now, we (the Congress) don't have any money to spend, to pay electricity bills, to pay salaries to our employees. Everything will be impacted, not only (Bharat Jodo) Nyay Yatra but all political activities will be impacted," he further said.

The Indian Youth Congress held protests in Delhi against the Bharatiya Janata Party (BJP) government for freezing the bank accounts of Congress and over the Electoral Bonds.

Meanwhile, Pawan Khera, a core member of the Congress Working Committee, took to social media platform 'X', and wrote in a post, "After targeting and freezing the accounts of  INC and IYC, it is now the turn of Delhi Pradesh Congress Committee.

Rs 115 Crores to Be Recovered From Congress Accounts

A demand of around Rs 135 crore is outstanding in the case of Indian National Congress (INC) for AY 2018-19. This includes demand of Rs 103 crore on account of assessment and interest of Rs 32 crore(approximately).

The case assessment u/s 143(3) of the Income Tax Act, 1961 was completed on 6 July 2021, disallowing exemption u/s 13A, as provisions of section 13A(d) were not complied with and the return of income was also filed late.

Thereafter, in stay proceedings before the AO, the Congress Party was requested to pay 20 percent of the total demand (i.e. Rs. 21 crore approximately) as per extant procedure. However, an amount of Rs 78 lakh only was paid. Since the INC failed to pay 20 percent of the outstanding demand, a letter was issued asking it to pay the balance demand of Rs 104 crore. The appeal filed by the INC before CIT(A) was later dismissed. 

Consequently, a second appeal was filed by the INC before ITAT in May 2023. Though no petition of stay of demand was filed before the ITAT or any other judicial authority, subsequently, Rs1.72 crore was paid by the INC in October 2023.

At present, recovery to the tune of Rs 115 crore has to be effected by withdrawing money from various bank accounts of the INC.

In proceedings before the ITAT on 16 February 2024, it was informed by the Income Tax Department that the recovery made by withdrawing money from accounts is a routine recovery measure. Operation or activity of the accounts has not been stopped. Further, INC has many more accounts for its activities, a fact which was taken note of by the ITAT.