New Delhi The Congress on Thursday fielded its top three leaders, party president Mallikarjun Kharge and former presidents Sonia Gandhi and Rahul Gandhi, to launch a frontal attack on Prime Minister Narendra Modi and his administration, accusing the government of virtually freezing the main opposition party’s bank accounts weeks before the general elections.
In the first joint press conference addressed by the three, the leaders alleged there was no level playing field before the polls because the Congress was unable to operate its accounts. They also disclosed that in addition to the ongoing tax dispute between the Income Tax (I-T) department over the assessment year (AY) 2018-19, the party received a fresh notice on March 14 over alleged discrepancies in AY 1994-95, when the late Sitaram Kesri was the party treasurer.
“A systematic effort is underway by the PM to cripple Congress financially,” said Sonia Gandhi. Rahul Gandhi echoed her. “This is a criminal action on the Congress by the PM and the home minister. This type of activity doesn’t happen without them in today’s India,” he said.
Read more: Congress releases third list of Lok Sabha candidates, 56 names included
{{/usCountry}}Read more: Congress releases third list of Lok Sabha candidates, 56 names included
{{/usCountry}}The Congress leadership said that they were unable to book flights for its leaders or advertisement spaces due to the shortage of funds.
Kharge contrasted the Congress’s inability to operate its account to the ruling Bharatiya Janata Party (BJP) “amassing huge resources through electoral bonds and other means”. “This can’t be called a free and fair election.... In the 75 years of India’s democratic system, no other party has amassed so much money (as the BJP). For the first time, the government is making money from various ways. ...if you want an impartial election, our party’s account should be freed. BJP has never paid any income tax. We are waiting for the final decision of the law,” he said.
In her statement, Sonia Gandhi said the issues taken up were “extremely serious”.
“This issue affects not just the Congress, but impacts our democracy most fundamentally. A systematic effort is underway by the PM to cripple the INC financially. Funds from the public are frozen and money from our accounts is being taken away forcibly. However, even under these most challenging circumstances, we are doing our very best to maintain the effectiveness of our poll campaigning,” she added.
Read more: In letter to Kharge, Anand Sharma takes a stand against Congress’s caste census push
Registered political parties are exempted from paying tax on specified income such as voluntary contributions, house property, income from other sources and capital gains, under section 13A of the Income Tax Act. But this exemption is subject to a set of stipulations, including maintenance of books of account, records of each contribution of more than ₹20,000 and audit reports by a chartered accountant Additionally, political parties must not receive donation of more than ₹2,000 otherwise than by way of cheque, demand draft or through bank account. Parties must also furnish their verified return of income for the previous year
The Congress's claim of full exemption was rejected on two grounds. One, the party did not submit its return of income within the time limit and two, the Congress received cash donations to the tune of ₹14.49 lakh in excess of ₹2,000. The Congress has rejected the allegation, saying it submitted returns within the stipulated time and the money received was from party legislators and office-bearers, and therefore could not be construed as “donations” under the IT Act.
I-T authorities have already attached ₹65 crore from five bank accounts of the Congress and its youth and students’ wings against the lien of ₹115 crore placed by the tax department on the party’s accounts in a case related to a delay in filing I-T returns for AY 2018-19. A lien is a sort of a hold on an amount that is owed. In this case, the lien was put through two letters sent by the department to the managers of Bank of Baroda and State Bank of India last month.
Read more: ‘Hurts everyone…’: Congress leader Salman Khurshid complains to ECI against BJP ads
The Congress has appealed the order in the Income Tax Appellate Tribunal and the Delhi high court unsuccessfully. The party now plans to go to the Supreme Court.
Tax officials say the case pertains to the Congress’s tax dues of assessment year (AY) 2018-19. The initial due to the tax department was ₹103 crore, and ₹32 crore was added to this on account of interest. The tax due was reassessed at ₹105 crore on July 6, 2021.
After this, the tax officials said, the Congress appealed before the Commissioner, Appeals but did not pay the mandatory 20% of the tax due to initiate the appeal. It paid only ₹78 lakh, prompting the commissioner to dismiss the plea. The Congress, the officials added, then appealed Commissioner, Appeals again in May 2023, and in October, paid ₹1.72 crore. They pointed out that the Congress has not applied for any stay on the tax demand in its appeal.
On Thursday, the Congress said it got a fresh notice over I-T discrepancies in 1994-95. “Last week, we got a notice for Sitaram Kesari’s term. Now, they will freeze more funds. Every political party is exempted from I-T. Why is the Congress targeted?” treasurer Ajay Maken asked.
Maken alleged that the party had received a donation of ₹199 crore in 2017-18, but after seven years, on 13th February 2024, ₹210.25 crore was marked as lien, the party’s bank accounts were virtually sealed, and later, ₹115.32 crore was forcibly confiscated.
The lien was marked in such a way, that it not only sealed ₹210 crore, but also prevented Congress from using its deposited amounts of ₹285 crores. This virtually crippled the finances of the party, its leaders alleged.
Rahul Gandhi appealed to the Election Commission to intervene. “The idea that India is a democracy is a lie. This is being orchestrated to cripple us in this election. Even if our bank accounts are unfrozen, huge damage has been done. It is ridiculous. It is the duty of all institutions to protect democracy. You are being robbed of a democratic asset, democratic architecture. This is criminal action by PM on Congress.”
”The is a punishment on our entire financial identity. There are institutions to protect our democratic framework. But the EC has not said, “wait a minute, you have frozen the bank account of the largest opposition party.” We have already lost a month. We are unable to prepare for our election,” said Rahul Gandhi
In a statement issued later, the Congress blamed the government.
“The BJP has looted the donations given to the Congress party by the common public by freezing our accounts ...No political party, including the BJP, pays income tax, yet the Congress party’s 11 bank accounts were frozen. Why?”
The BJP rejected the criticism.
BJP president JP Nadda said the Congress’s top leadership ranted against democracy and institutions because the party was going to be rejected by the people in the upcoming elections. “They are conveniently blaming their irrelevance on ‘financial troubles’. In reality, their bankruptcy is moral and intellectual, not financial. Instead of correcting their own errors, Congress is blaming authorities for their troubles,” Nadda said in a post on X, formerly Twitter.
Senior BJP leader Ravi Shankar Prasad said the Congress party’s calling the freezing of its accounts to an assault on democracy was misplaced and it had “shamed Indian democracy globally.” “In utter desperation of imminent defeat the Congress party at the highest level sought to create an alibi today,” he said.
Prasad said there is a provision in the IT Act, 13 (a) that says party is exempted from paying income tax, but they have to file their returns and cite details of the donors. “If this is not filed every year with a certified auditor’s report; you lose the exemption...Sections 220 and 221 also give details of the collection and recovery (of dues,” he said.
Singling out Rahul Gandhi, the former union minister also said, “Our gentle advice to the Congress, we wish you well, the more you allow Rahul Gandhi to speak: the more you are losing ground in the country” he said.