ITAT junks Congress' plea to stay IT action against its bank accounts

ITAT junks Congress' stay application against IT order

The Income Tax Appellate Tribunal (ITAT) on March 8 dismissed Indian National Congress' plea seeking a stay of the Income Tax (IT) department's lien on their bank accounts.

After the pronouncement of the order, senior counsel Vivek Tankha, who appeared for Congress, urged the ITAT to keep the order in abeyance for 10 days to enable them to file an appeal in the high court. He said "Since you have dismissed the stay application, which has far reaching consequences for the party. Can I request the court to keep the order in abeyance for 10 days so that I can go to high court?"

The appellate tribunal, however refused to entertain the plea noting that they are not empowered to pass such orders.

The stay application pertained to IT's demand of Rs 210 crore that was raised in connection with the income tax return from 2018-19. Congress had contended that a lien on the bank account amounted to crippling the political party financially on the eve of upcoming general elections.

On February 22, the appellate tribunal heard senior advocate Vivek Tankha for Congress and lawyer Zoheb Hossain for the IT Department for two sessions before reserving the plea for judgment.

During the hearing, Tankha argued that contrary to what the IT claimed, the political party is constrained for funds especially since it needs resources to fund its campaign for the upcoming elections. According to Tankha, even if the party contests only 350 seats in the upcoming elections, it may have to foot 50 percent of the expenditure of each candidate, which may prove to be an expensive affair. According to the Representation of Peoples Act, 1951, a candidate can spend up to Rs 95 lakh for Lok Sabha elections.

On February 21, IT argued that the political party has a corpus of Rs 657 crore, fixed assets of Rs 340 and crore in addition to cash and cash equivalent of Rs 380 crore. It was further argued that this IT demand would not affect Congress' activities in the upcoming elections and therefore the demand need not be stayed.

On February 16, Congress' treasurer and senior leader Ajay Maken alleged that the four bank accounts of the party and the Youth Congress have been frozen by the Income Tax Department, and a demand of Rs 210 crore has been raised in connection with the income tax return case of 2018-19.

Later that day, Tankha said that the ITAT had permitted Congress to operate the bank account noting that there would be only a lien on them.  However, the IT department contended that it had not issued an order to banks to freeze the transactions in Congress' bank account.