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Income Tax Department had frozen 4 bank accounts, now again Congress

New Delhi: Congress has suffered a setback from the Income Tax Appellate Authority (ITAT). Reason, ITAT on Friday rejected Congress’s petition in which the party had sought a stay on the Income Tax Department’s action on its bank accounts. Actually, the Income Tax Department had frozen four bank accounts related to Congress and Youth Congress. Income Tax Department has sought recovery of Rs 210 crore. That means Congress will have to pay this amount as penalty to the Income Tax Department. The party had appealed against this in the Income Tax Appellate Authority, but this appeal has been rejected.

After the announcement of the authority’s order, senior advocate Vivek Tankha, appearing for the Congress, urged ITAT to keep the order in abeyance for 10 days so that they can file an appeal in the High Court. He said, “Since you have rejected the stay application, which will have far reaching consequences for the party. Can I request the court to keep the order in abeyance for 10 days so that I can approach the High Court?”
However, the appellate tribunal refused to entertain the petition saying it had no jurisdiction to pass such orders. This entire matter is related to the income tax return of 2018-2019. The Income Tax Department has sought recovery of Rs 210 crore from Congress as penalty. According to Maken, there are two reasons for this action. First- We had to give information related to our account to the Income Tax Department by 31 December 2019. At that time returns were submitted 40-45 days late.

Usually people also get late by 10-15 days. The second reason is that 2018-19 was an election year. Congress had spent Rs 199 crore in that election year. Out of that, Rs 14 lakh 40 thousand were deposited by Congress MPs and MLAs as part of their salary. This money was deposited in cash. The Income Tax Department has imposed a penalty of Rs 210 crore on Congress due to receipt of money in cash.
During the hearing, Advocate Tankha argued that contrary to IT’s claim, the political party is constrained for funds, especially as it needs resources to finance its campaign for the upcoming elections. According to Tankha, even if the party contests only 350 seats in the upcoming elections, it may have to bear 50 percent of the expenses of each candidate, which could prove to be a costly affair. According to the Public Representation Act, 1951, a candidate can spend up to Rs 95 lakh in Lok Sabha elections.

On February 21, the IT had argued that the political party had funds worth Rs 657 crore, immovable assets worth Rs 340 crore and cash worth Rs 380 crore. It was further argued that this would not have any impact on the activities of the Congress in the upcoming elections and hence there was no need to put a stop to the demand.
On February 16, Congress treasurer and senior leader Ajay Maken had alleged that four bank accounts of the party and Youth Congress have been frozen by the Income Tax Department and a demand of Rs 210 crore has been made in connection with the income tax return case of 2018-19. . Later that day, Tankha said that ITAT had given Congress permission to operate the bank accounts saying that there would only be a lien on them. However, the IT department argued that it had not issued orders to the banks to freeze transactions in the Congress’ bank account. He had also accused IT of withdrawing Rs 65 crore from the party’s accounts.

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