Congress' accounts not frozen, only temporary lien to extent of tax dues: Sources

Section 13A says any income a political party receives from voluntary contributions or any interest, dividend, or rent from its assets is not included in the party’s total income for taxation. However, there are conditions to avail of these exemptions, one of them being that it must not have received any donation of more than ₹2,000 in the form of cash.

The I-T Department also held that Congress filed its income tax returns late. And so, on the assessment completed on July 6, 2021, the assessing officer fixed Congress’ income at ₹199 crore, and raised a tax demand of ₹105 crore. This was challenged by Congress with the Commissioner Income Tax-Appeals (CIT(A)). However, the I-T Department claims that instead of paying the requisite 20% of the tax demand when appealing it (which would work out to around ₹21 crore), Congress paid only ₹78 lakh. Subsequently, CIT(A) dismissed Congress’ appeal.

Congress then moved the Income Tax Appellate Tribunal (ITAT) for relief in May 2023, and in October 2023, paid an additional ₹1.72 crore. This appeal is still being heard by the ITAT.

While the ITAT is still hearing the case, sources say Congress’ appeal does not seek a stay on the recovery process; nor has the ITAT ordered such a stay. So the IT Department, as a matter of routine procedure, has placed a lien on the ₹115 crores due. This temporary lien has been sanctioned by the ITAT. Government sources added that at no time have operations of Congress’ bank accounts been halted, meaning the party has the financial infrastructure to continue its activities. So sources further argue that Congress’ allegations that this is a move by the government to stifle its activities ahead of the general elections are baseless and false.