Congress Party's Accounts ‘Frozen’; IT Tribunal Provides Interim Relief

New Delhi: In a move with far-reaching implications, the Income Tax department has frozen the bank accounts of the Indian National Congress (INC) and the Indian Youth Congress (IYC), citing a 45-day delay in filing Income Tax (IT) returns for the fiscal year 2018-19. Congress Treasurer Ajay Maken revealed the development on February 16, 2024, and ignited a fierce debate over the state of democracy in India just weeks before the announcement of elections.

In all, four accounts of the Congress party have been frozen. Maken said the party had approached the Income-Tax Appellate Authority (ITAT) to defreeze their account. Shortly after the press conference, the party said their accounts had been unfrozen. In a video message, Congress leader Vivek Tankha said that the ITAT un-froze the accounts of the Congress party “pending further hearing.”

What Went Down

Maken, while addressing a press conference in New Delhi, characterised the action as a direct assault on democracy itself. He said that the Income Tax department – under the control of the Bharatiya Janata Party-ruled Union government – has frozen its bank accounts and demanded Rs 210 crore as recovery over an alleged 45-day delay in filing returns and cash contributions from its lawmakers.

“It is not a freezing of Congress’ account, but democracy has been frozen. When the announcement for elections is just a month away, they have frozen the account of the principal Opposition party,” he said at the press conference in New Delhi. “Will there be a single-party rule in the country?” he wondered.

Maken emphasised that the funds in question were not from corporate accounts but were collected through online crowdfunding efforts. He highlighted the irony of the situation, with the BJP allegedly benefiting from unconstitutional corporate bonds while freezing the accounts of its political opponents.

Furthermore, Maken shed light on the punitive demand made by the Income Tax department, totalling a staggering Rs 210 crore. He explained that the delay in filing returns was compounded by the unique circumstances of the election year, where the Congress party had significant expenditures, including cash contributions from MPs and MLAs.

“Power drunk Modi Govt 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 ! The UNCONSTITUTIONAL money collected by the BJP would be utilised by them for elections, but the money collected by us through CROWDFUNDING shall be sealed! That is why I have said that there won’t be any elections in the future…We will take to the streets and fight strongly against this autocracy!” Congress President Mallikarjun Kharge echoed Maken's concerns in a post on X (formerly Twitter), 

The timing of the freeze has raised suspicions, coming just a day after the Supreme Court's landmark decision declaring the electoral bond scheme unconstitutional. The scheme, introduced by the Modi government in 2018, allowed for anonymous donations to political parties, sparking widespread criticism over transparency and accountability.