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Congress Alleges Rs 65 Crore ‘Looted’ from Its Accounts by Income Tax Officials

Congress treasurer Ajay Maken said income tax officials went to the bank branches on Tuesday (February 20) and “threatened” them and collected Rs 65.8 crore through demand draft.
Congress leader Ajay Maken at the press conference. Photo: @inchemlata

New Delhi: The Congress party on Thursday (February 22) accused the BJP of “financial terrorism” and alleged that Rs 65 crore has been “looted” from its accounts by banks and deposited to the government ahead of the Lok Sabha elections.

“We are holding this press conference to reveal the so-called financial terrorism imposed by the BJP government on the Congress party. As per the latest information from the banks, the BJP government forced the banks of the Congress party to transfer approximately Rs 65.89 crore from our deposits to the government,” Congress general secretary and Rajya Sabha MP K.C. Venugopal said while alleging that the saffron party is “stealing” the Congress’ money.

Further, launching a scathing attack on the BJP, Venugopal added, “Basically this amount is from the AICC (All India Congress Committee), IYC (Indian Youth Congress), and NSUI (National Students Union of India) accounts.

“Unlike the BJP, we acquired this money from ordinary workers of the party. [The] Congress party had extensively gone for crowd funding and collected money from the poor people of this country. IYC money is the membership fees of ordinary IYC workers.”

Venugopal underlined that this was happening for the first time in the history of the country and asked whether the BJP had experienced this under the UPA regime.

The Congress leader questioned, “What does it mean just before the parliamentary elections? The account of the principal opposition party has been hijacked by the BJP government. We are all law abiding citizens. On very very non-serious matters they are taking away our money.

“Basically they are stealing our money from the bank. This is to deny the minimum level playing field to a political party to fight elections.

“We have also ruled this country. Can [the] BJP point to any such experience under [the] Congress or UPA government? Has [the] BJP given income tax as a party? This is a clear attack on democratic principles. They are trying to shut the voice of [the] opposition,” he said.

Last week, the Congress said that the Income Tax department had 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.

The party later announced on the same day that the Income Tax Appellate Tribunal (ITAT) un-froze the accounts of the Congress party “pending further hearing.”

Also read: Day After SC Quashes Electoral Bonds, Congress Says Accounts Frozen; Cloud Over ‘Interim Relief’

Speaking at the same press conference, Congress treasurer Ajay Maken said that while the hearing was scheduled to take place yesterday (February 21), income tax officials went to bank branches on Tuesday (February 20), “threatened” them and collected Rs 65.8 crore through demand drafts.

“A day before the hearing, Income Tax officials went to the bank branches and threatened them and collected Rs 65.8 crore through demand draft,” he said.

According to details provided by the party, a total amount of Rs 65.88 crore was collected from AICC accounts in the Bank of Baroda, Union Bank of India, Punjab National Bank as well as the IYC account and NSUI accounts in the State Bank of India.

In a statement, the Congress party said that “the turn of events started suddenly when, on February 14, the IT Department issued a notice to four bankers of 11 branches of AICC, Youth Congress and NSUI asking them to deposit Rs 135,06,88,984. (In some banks the demand was Rs 75.17,97,015.73), the total being more than 210 crores)- to the Government. Since no bank had such amounts in our accounts, our accounts were virtually frozen and thus inoperable.”

The statement said that IT officials had informed the ITAT that it has not frozen the Congress’s bank accounts but only asked for a lien on the amount according to an earlier demand.

“But brazenly the IT department went a step ahead and transferred our funds to the government accounts,” Maken said.

The party said that the issue pertains to income tax returns filed for the financial year 2019-2018 on February 2, 2019 relevant to the assessment year 2018-2019.

“The IT department found fault with the INC that out of the aggregate voluntary contributions of Rs 142.83 crores, Rs 14.49 lakhs were received in cash, each donation being more than Rs 2,000,” it said.

The party said that the cash contribution was the monthly salaries given by MPs and MLAs.

“We had to give our accounts to the Income Tax Department by December 31, but we gave it on February 2, 2019. Because of this, we were imposed a penalty of Rs 201 crores. This has never happened till date,” said Maken.

“Next is the question of timing. Now after five years, the government and the Income Tax Department have woken up, when elections are around the corner. What kind of justice is this? This is an attempt to cripple the Congress party financially so that we are not able to contest elections,” he added.

Congress’s claims show their character of “loot”: BJP

Later on Thursday, while addressing a press conference, BJP spokesperson Shehzad Poonawalla said that the Congress’ claims shows their character of “loot” and “vasooli” (recovery).

“The normal tax rules that are applicable [to] common people like you and me, for them it is appearing to be ‘vasooli’,” he said.

“The Income Tax assessment under which it was said that the Congress had to pay Rs 135 crores was done on July 6, 2021. Today [the] Congress is saying that political parties don’t have to pay income tax. This is correct as per Section 13(A); political parties don’t have to pay tax on voluntary contributions,” Poonawalla continued.

He added: “But if you consider the provisos given under the Section, there are some conditions that have been laid down, including returns being filed on time, [and that] voluntary contributions cannot be over Rs 2,000. So there is no blanket coverage of exemption on all income.

“On March 28, 2023, this was confirmed by an appellate commissioner, on which [the] Congress filed an appeal. The law says that 20% has to be deposited, irrespective of the outcome of the appeal, which means they had to deposit Rs 21 crores. The appeal was dismissed and instead of Rs 21 crores, the Congress deposited Rs 78 lakh.

“In May 2023, [the] Congress filed another appeal but did not ask for a stay and in October 2023, the Congress deposited Rs 1.72 crore of the 21 crore that had to be deposited.”

Poonawalla said that the Rs 65 crore that the Congress referred to “has not been encashed.”

“It is the nobility of the IT department that the Rs 65 crores that is being talked about, the demand draft has not been encashed by the IT officials,” he said.

“The [tax] assessment came because you flouted the laws. They filed an appeal, which was rejected, they deposit some money but don’t ask for a stay. They go for a second appeal and again don’t ask for a stay, and when the rule of law is followed, you call it financial terrorism.”

“The misdeeds done under the Manmohan Singh government between 2004-2014 can be classified as financial terrorism as has been shown by the government’s white paper recently.”

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