India’s I-T department freezes Congress’ bank accounts

India’s income tax (I-T) department froze the main bank accounts of the opposition Congress party before a tribunal reinstated them on Friday pending further hearing next week.

Speaking to reporters in New Delhi, party treasurer Ajay Maken said the I-T department had frozen the accounts, including that of the Indian Youth Congress, over a tax demand of ₹210 crore ($25.3 million) for 2018-19. 

“For the first time in the country’s history, accounts of the principal opposition party have been frozen by tax authorities on flimsy grounds, barely two weeks before the announcement of the general election,” he said.

The action was reportedly taken after the party filed its I-T return for the year concerned a few days late. The orders freezing the accounts had come on Wednesday, following which the party approached the tribunal.

Congress leader Vivek Tankha, who appeared before the tribunal, said the party was now allowed to operate its bank accounts. 

The tribunal will hear the matter on Wednesday before a final decision is taken, the Press Trust of India reported.

Later, in a post on X (formerly Twitter), Maken said, “On our petition, I-T department and the I-T appellate tribunal (ITAT) has said that we have to ensure that ₹115 crore ($13.9 million) have to be kept in the banks. This ₹115 crore is the lien marked in the bank accounts. We can spend an amount over and above that.”

“This means that ₹115 crore has been frozen. This ₹115 crore is much more than we have in our current accounts,” he added.

The I-T department said a total of ₹115 crore has to be recovered from the Congress, NDTV reported. 

An email sent to a spokesperson of the Central Board of Direct Taxes (CBDT) remained unanswered.

Congress president Mallikarjun Kharge said in a post on X, “Power drunk Modi Government has frozen the accounts of the country’s largest Opposition party – the Indian National Congress – just before the Lok Sabha elections.”

“This is a deep assault on India’s democracy,” he added. 

“The unconstitutional money collected by the BJP would be utilized by them for elections, but the money collected by Congress through crowdfunding shall be sealed,” Kharge added.

“That is why I have said that there won’t be any elections in the future. We appeal to the Judiciary to save the multi-party system in this country and protect India’s Democracy,” the Congress president further said.

The tax department’s action comes close after the Supreme Court scrapped the electoral bond scheme, a political funding tool that allowed anonymous donations to parties, calling it a violation of freedom of speech and expression enshrined in the Constitution.

Nearly 61% of the BJP’s overall ₹2,120 crore ($255 million) contributions in fiscal 2023 came from electoral bonds, the party’s annual audited report submitted to the Election Commission showed. 

The Congress, on the other hand, earned ₹171 crore ($20.6 million) from electoral bonds in the same period.