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Tribunal reserves order on Congress-IT Dept dispute
The development came after IT authorities attached ₹65 crore from five bank accounts of the Congress
New Delhi The Income Tax Appellate Tribunal (ITAT) on Thursday finished hearing the case connected to the tax recovery dispute between the Congress and the tax authorities and reserved its order.
Congress leaders said the ITAT passed an order prohibiting income tax (IT) officials from attaching any additional money from the bank accounts of the Congress. The Opposition party, too, can’t withdraw all the money from its accounts but has to maintain the margin for a lien, the leaders added.
“The ITAT has given a stay -- that means the IT department can’t take away any additional amount from our accounts,” said Congress’s lawyer Vivek Tankha.
The development came after IT authorities 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 IT returns for assessment year (AY) 2018-19.
A lien is a sort of a hold on an amount that is owed. In this case, the IT 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 lien would continue to exist; this means the Congress has to keep ₹50 crore (After the IT department has already taken ₹65 crore) in its accounts.
In a press conference earlier in the day, Congress treasurer Ajay Maken attacked the Bharatiya Janata Party (BJP) government for denying it a “level playing field” in the upcoming general elections and called the action by IT authorities “financial terrorism”.
“The BJP is trying to stop us from fighting the elections. If we can’t operate our accounts, how can we fight the Lok Sabha polls?” asked Maken.
Congress general secretary K.C. Venugopal denounced the actions of the BJP government, accusing them of “financial terrorism” and alleging that they were “stealing the money from the banks.”
The BJP has maintained that it has nothing to do with a routine I-T process.
According to functionaries, Tankha argued that as the appeal was pending and the accounts remained effectively inoperative, the biggest opposition party was not being allowed to fight the general elections.
When IT department argued that the Congress has enough money to fight the polls and has no hardship, Tankha argued that half of its money was in fixed deposits and the Congress was not even able to meet the lien amount.
Tankha, who argued virtually from Singapore, also maintained that while the assessment officer (AO) of the IT department rejected the party’s application, the AOs order was not binding upon the Appellate Tribunal. He pointed out that IT officials have tried to take away the right to move to the appellate authority.
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.
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.
IT officials have attached ₹17.64 crore from the party’s current account in Bank of Baroda, KG Marg branch, ₹41.85 crore are frozen from Union Bank of India’s CP branch and ₹74 lakh from a PNB branch. And ₹5 crore has been attached from IYC and NSUI accounts.
