ITAT's relief to Congress after nine bank accounts 'frozen' claim

Sources said that it was not the accounts that were frozen, but an amount of around Rs 115 crore, which remains attached

A Rs 115 crore income-tax demand on the Congress triggered a political slugfest on Friday.

The Congress initially claimed that its nine bank accounts had been frozen by revenue authorities. 

However, a tax tribunal later unfroze them, and the Congress was allowed to operate them, said the Opposition party.

Contrary to these claims, sources stated that it was not the accounts that were frozen, but an amount of around Rs 115 crore, which remains attached. The Income Tax Appellate Tribunal (ITAT) has scheduled the next hearing for February 21.

In the morning, the party announced that the freezing of its main bank accounts by the I-T authorities had disrupted all political activity. Party leader Vivek Tankha told the ITAT that the Congress would be unable to participate in the “festival of elections” if its accounts remained frozen.

Party treasurer Ajay Maken claimed that the I-T department had frozen the Congress’ main bank accounts on “flimsy grounds”. This action, he said, affected all political activity of the party, just weeks before the general elections were to be announced.

Maken also claimed that the party was unable to use even the funds received under its crowdfunding initiative. Congress president Mallikarjun Kharge posted 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.”

Later the ITAT allowed the Congress to operate accounts with Rs 115 crore as a lien of the Income Tax Department. 

The sources said the case relates to Rs 103 crore original demand from the I-T department for the assessment year of 2018-19.  

The amount was revised to Rs 105 crore in July 2021. Also, Rs 32 crore was added as an interest to the raised demand as the party filed the returns late.

The tax department did not freeze even one bank account of the Congress, the sources stressed.

Maken posted on X the tax notice by the I-T department that warned that if the party failed to make the payment, it shall be deemed to be as “assessee in default in respect of the amount ... and further proceedings may be taken against it for the realisation of the amount”.

The notice added that this would have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his/her powers.

"Is this not attaching, seizing, freezing our accounts?" Maken wondered.

The sources concluded by saying that the Congress would be treated the same way as the common citizen when it comes to recovering income tax demand.