India’s opposition Congress party loses appeal to pause $16 million tax recovery

By Thomson Reuters Mar 8, 2024 | 7:08 AM

By Shivam Patel

NEW DELHI (Reuters) – India’s main opposition Congress party suffered a setback on Friday as a tax tribunal dismissed its appeal to pause recovery of 1.35 billion rupees ($16.32 million) in income tax from its bank accounts, weeks before national elections.

A part of the Congress’ bank accounts had been frozen last month pending the tax recovery that dates back to 2018-19, with the party describing the action as “a deep assault on India’s democracy”.

Vivek Tankha, a Congress lawmaker who is the main advocate in the case, told the Indian Express newspaper last month that the dispute stemmed from what tax authorities said was late filing of income tax returns for financial year 2018-19.

He rejected the claim that the party filed its returns late and said the penalty of 1.35 billion rupees was “disproportionate”.

The tribunal on Friday rejected Tankha’s argument that the action against Congress was initiated in haste close to the general elections, and said the tax demand was first raised in 2021.

There was no immediate reaction to the ruling from Congress but a lawyer for the party said it will appeal in the Delhi High Court.

The lawyer said that the income tax department had already recovered 650 million rupees and the rest could also be withdrawn soon.

The Congress has said that the frozen accounts had funds including those collected by the party through crowd-funding and membership drives.

Congress, which has ruled India for 54 of its 76 years since independence from Britain, has sunk to record lows after Prime Minister Narendra Modi swept to power in 2014 and is struggling to revive support.

Modi is widely expected to win a rare third straight term in elections expected to be announced in the coming days.

($1 = 82.7110 Indian rupees)

(Reporting by Shivam Patel; Editing by YP Rajesh and David Evans)