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I-T dept withdraws ₹65cr from5 Congress accounts as ‘recovery’
Registered political parties are exempted from paying tax on specified income such as voluntary contributions, house property
New Delhi: Income Tax authorities have 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 accounts of the country’s principal Opposition party in a case related to a delay in filing IT returns for assessment year (AY) 2018-19.
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 they have to file IT returns annually.
“Yesterday, the Income Tax Department mandated banks to transfer over ₹65 crores from @INCIndia, IYC, and NSUI accounts to the government— ₹5 crores from IYC and NSUI, and ₹60.25 crores from INC, marking a concerning move by the BJP Government,” Congress treasurer Ajay Maken posted on X.
The finance ministry did not respond to a query on this matter.
A government official familiar with the matter, who spoke on condition of anonymity, said: “Laws are not different for political entities and common citizens. These are routine procedures of the Income-Tax Department to recover dues. The case pertains to tax dues of financial year 2017-18. The assessee had enough time to act as per the law.”
Maken also questioned why the Congress is facing the IT demand of ₹210 crores. “Is it common for national political parties to pay income tax? No. Does the BJP pay income tax? No Why then is the Congress party facing an unprecedented demand of ₹210 crores?” he added.
Tax officials said 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.
IT officials have attached ₹17.64 crores from the party’s current account in Bank of Baroda, KG Marg branch, ₹41.85 crores are frozen from Union Bank of India’s CP branch and ₹74 lakhs from a PNB branch. And ₹5 crore has been attached from IYC and NSUI accounts.
“We tried RTGS (electronic bank transfer) payment. But it failed as banks have been instructed to not allow any payment from our accounts,” added Maken.
A lien is a sort of a hold on an amount that is owed. In this case, the Income Tax department has a lien of ₹115 crore on the Congress’s accounts that was put through two letters sent by the department the managers of Bank of Baroda and State Bank of India on Tuesday.
The Congress’s legal representatives appeared before the IT tribunal for the second hearing on the tax dispute, but Congress leaders said the tribunal will sit again on Thursday as the hearing remained incomplete.
Congress member Vivek Tankha, a Rajya Sabha MP, had said last Friday that the Congress showed around ₹198 crore as revenue in 2018-19 and ₹197 crore as expenditure and also termed the tax demand “disproportionate”. The Congress had said it was unable to operate its accounts on February 13 and 14 — and that this was lifted after it approached the Income Tax Appellate Tribunal (ITAT) on February 14. Tankha said he was told by ITAT that there would be no freeze, but that there was a lien.
