ITAT Allows Congress to Operate Frozen Accounts with Lien Amidst Legal Battle

Income tax appellate Tribunal Law Insider

LI Network

Published on: February 18, 2024 at 10:08 IST

The Income Tax Appellate Tribunal (ITAT) granted an interim relief to the Congress party on Friday, allowing it to operate its frozen bank accounts, albeit with a lien imposed by the Income Tax department.

Rajya Sabha MP and advocate Vivek Tankha, who represented the Congress before the ITAT bench in Delhi, expressed gratitude for the “gracious hearing” and clarified that there is no restriction on the bank accounts, only a lien.

Tankha explained that a lien is a security interest granted over property to secure the payment of a debt or fulfillment of an obligation. He emphasized that the ITAT’s decision ensures the party can conduct its operations while awaiting a hearing on the merits of the case.

During the hearing, Tankha argued that all the Congress Party’s bank accounts had been frozen, preventing its participation in upcoming elections.

He highlighted the timely filing of returns and contested the alleged misconstruction leading to disproportionate punishment. Tankha urged the court to protect the party and democracy, allowing them to operate their bank accounts.

In response to the ITAT ruling, Congress General Secretary Ajay Makan clarified that the Income Tax Department and ITAT had mandated keeping Rs 115 crores in the banks, indicating a lien on the accounts. He noted that this amount exceeded what the party had in its current accounts, allowing them to spend additional funds.

Congress Chief Mallikarjun Kharge criticized the central government, led by Prime Minister Narendra Modi, for the alleged freezing of the party’s bank accounts, vowing to take to the streets against what he deemed as government autocracy.

Former Karnataka Chief Minister HD Kumaraswamy expressed uncertainty about the reasons behind the account freeze, while BJP leader CN Ashwath Narayan accused the Congress party of attempting to engage in politics without proper grounds and emphasized that the law applies to everyone.

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