"Financial Terrorism": Congress Slams Government In Tax, Bank Account Row

The Congress - battling an "unprecedented" demand of Rs 210 crore from the Income Tax Department weeks before the general election - has accused the Narendra Modi government of "financial terrorism", and "stealing money" and trying to "cripple" its primary opposition weeks before the election.

It said the Income Tax Department found fault with its FY2017/18 returns; officials said a percentage of aggregate voluntary contributions for the period were in cash, and over the Rs 2,000 limit.

"(But) how justified is the total demand of Rs 210 crore for a violation (even if true) of just Rs 14.49 lakhs?" the Congress asked, pointing to the timing of the tax notice.

"We filed our return on February 2, 2019... the proceedings of taking out our money took place five years after... two weeks before elections are announced."

Congress leader Ajay Maken said Thursday, "We will get our money back but, by then, election will be over". General Secretary, KC Venugopal, slammed the "attempt to suppress the opposition".

"Has income tax ever been taken from political parties? This is not income... that is why tax is never taken. And, when BJP has never paid income tax, then why take from Congress?" Mr Maken asked.

This comes a day after he said tax officials had withdrawn Rs 65 crore from accounts operated by the main party, and the student and youth wings despite an appeal before the Income Tax Tribunal.

Elaborating on yesterday's claim, the Congress this morning said the BJP government had "coerced the bankers of our party... to transfer approximately Rs 65.89 crore from our deposits..."

READ | "Rs 65 Crores Transferred": Congress' Ajay Maken Slams Centre In Tax Row

The Congress said money had been withdrawn from State Bank of India accounts run by the Youth Congress and National Students' Union of India, and three others operated by the main party.

"Unlike the BJP, this is money contributed by workers of the Indian National Congress, the membership fees of the Indian Youth Congress, and students from the NSUI... this illegal act was committed despite the fact the case is pending for hearing before the ITAT..." the Congress said in its statement.

The party also asked if "the BJP has ever paid income tax?"

Last week the Congress found its main bank accounts frozen by tax officials. These were, however, quickly unfrozen by the ITAT, which began hearing the case yesterday.

Hitting out at the government, Mr Maken said the freeze had left the Congress with "no money to spend". "....electricity bills, staff salaries... everything is impacted. Look at the timing; this is clear."

READ | "115 Crores Frozen, Don't Have That Much": Congress On Accounts Row

Funding for political parties is becoming a central issue in this election, particularly after the Supreme Court struck down electoral bonds - which allow individuals and/or businesses to make anonymous donations to political parties - on grounds it violated citizens' right to information.

The Congress and other opposition parties welcomed the verdict, which scrapped a scheme that had benefitted the BJP the most. Data shows, 28,030 bonds worth Rs 16,437.63 crore were sold between 2016 and 2022, with the BJP getting over Rs 10,000 crore and the Congress less than Rs 1,600.

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