The Income Tax Appellate Tribunal has reserved its order on the plea filed by the Congress seeking a stay against the Income Tax Department’s proceedings of recovery and freezing of the party’s bank accounts. This comes after the IT Department recovered ₹65 crore from the accounts of the Indian National Congress, out of the total outstanding tax dues of ₹115 crore. The Congress has condemned this action as “undemocratic,” especially considering that the case pertaining to their returns for previous years is still sub judice.
On February 14, the IT Department issued notices to four bankers of 11 branches of the All India Congress Committee (AICC), Youth Congress, and NSUI. Subsequently, the main bank accounts of the Congress were frozen over an Income Tax demand of ₹210 crore. However, the Income Tax Appellate Tribunal later allowed the party to operate these accounts pending a further hearing, providing a significant relief as the freeze had impacted all political activities.
The Congress approached the IT Appellate Tribunal (ITAT) against the tax recovery and filed a complaint, arguing that the Income Tax Department had encashed balances lying with the banks without waiting for the outcome of the scheduled hearing before the bench. The Congress appealed that further proceedings by the department should be halted until the stay application is disposed of.
During the proceedings on February 22, the Congress emphasized that failure to grant a stay would place the party under severe financial strain, especially with the 2024 Lok Sabha Elections looming. However, the Income Tax Department countered this argument, asserting that the recovery and freezing of accounts were routine proceedings and not politically motivated propaganda.
Furthermore, the IT Department criticized the Congress for its alleged failure to pay income tax dues for several years, stating that their conduct was not acceptable. In response, the Congress accused the BJP-led Centre of engaging in “financial terrorism” and accused the government of “looting” funds from its accounts to economically weaken the party ahead of the Lok Sabha polls.
Congress leaders, including Jairam Ramesh, K C Venugopal, and Ajay Maken, held a press conference at the AICC headquarters, where they denounced what they termed as “tax terrorism attacks” orchestrated against the party. They also accused the ruling party of attempting to undermine democracy and steer the country towards a “dictatorship raj.”
The standoff between the Congress and the IT Department underscores the intense political polarization surrounding tax matters and financial regulations in India. As the legal battle continues, it remains to be seen how the Income Tax Appellate Tribunal will adjudicate on the Congress’s plea and whether it will grant a stay against the Income Tax Department’s recovery proceedings.