DNA TV Show: Why were Congress's bank accounts briefly frozen by I-T department?

Congress on Friday claimed that the Income Tax department had frozen its major bank accounts. However, the Income Tax Appellate Tribunal later lifted the freeze on its accounts till the hearing next week. According to Congress leader Ajay Maken, Congress got information on February 14 that banks are not issuing Congress cheques. Later, it came to light that four bank accounts of the Congress party had been frozen, including those of Youth Congress.

The I-T department's move came after it sought recovery of Rs 210 crore from Congress and Youth Congress. Due to non-payment, Congress's bank accounts were frozen. Hence, the matter was related to income tax which is a financial issue. Congress reached Income Tax Appellate Tribunal on 15 February. 

This entire matter is related to the income tax return for the financial year 2018-2019. In that year, Congress owed Rs 135 crore to the I-T Department, including income tax of about Rs 103 crore and interest of Rs 32 crore. This arrear was because Congress did not get the exemption from income tax under Section 13A of the Income Tax Act, 1961. Under Section 13A, political parties get an exemption from income tax on the amount of donation.
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However, Congress did not get this exemption because it did not fulfil the conditions of Section D of Section 13A of the IT Act. Section D says that a political party will get an exemption from income tax on the basis that it files income tax returns on time. Ajay Maken himself admitted in his press conference that Congress had delayed filing the returns by 45 days. But to get income tax exemption, Congress filed a case in the Income Tax Assessment Office.

Then Congress was asked to pay the income tax amount i.e. 20 percent of Rs 104 crore i.e. about Rs 21 crore. But Congress deposited only Rs 78 lakh. After this, the Income Tax Department demanded Congress to deposit the entire Rs 104 crore. Against which Congress went to ITAT in May 2023. But even then Congress did not file a request to put a stop to the demand of the Income Tax Department.

After this, in October 2023, Congress made a payment of Rs 1.72 crore to the Income Tax Department. According to I-T Department, Congress still owes Rs 115 crore. And to recover this amount, the Income Tax Department had frozen the bank accounts of Congress on February 14. Congress had appealed to ITAT which gave it immediate relief and lifted the ban on bank accounts till 21st February.