In a legal setback for the Congress Party, the Income Tax Appellate Tribunal (ITAT) has dismissed their plea seeking a stay on Income Tax Department (I-T) proceedings to recover dues amounting to Rs 210 crore and to freeze their bank accounts. Senior counsel Vivek Tankha, representing the Congress Party, made a fervent appeal before the ITAT Bench, urging a to keep the order in abeyance for ten days to allow time for appealing in the High Court. Tankha underscored the grave implications of the decision on the party's financial operations, particularly with the impending general elections looming.
The Income Tax Tribunal, however, declined Congress' request, citing the absence of provisions or prayers for such action before it. The stay application pertained to the IT department's demand raised in connection with the income tax return from the fiscal year 2018–19. The Congress Party contended that the encumbrance on their bank accounts severely hampered their financial viability, especially in light of the forthcoming electoral activities.
During the hearing on February 22, Congress lawyer Tankha emphasised the financial constraints faced by the party, particularly concerning the funding of its election campaign. He highlighted the substantial expenses involved in contesting elections, citing the permissible expenditure limit for each candidate under the Representation of Peoples Act, 1951.
In response, the IT department argued on February 21 that the demand would not impede Congress's electoral endeavours, pointing to the party's considerable financial resources.
Background of the Income Tax Tribunal Case
The dispute arose when Congress treasurer Ajay Maken alleged on February 16 that the party's bank accounts were frozen, accompanied by a demand of Rs 210 crore by the IT department. While the Income Tax Department did not issue an official statement regarding its actions, official sources asserted that it was a routine procedure against individuals or entities with outstanding income tax dues.
Subsequently, Congress accused the Income Tax department of “undemocratically” withdrawing Rs 65 crore from its accounts across various banks, despite the ongoing legal proceedings concerning their income tax returns. The IT department refuted these claims, too.
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