India: Income Tax Tribunal dismisses Congress' plea to stay I-T recovery, freezing of bank accounts

In a major setback for Congress, India's Income Tax Appellate Tribunal (ITAT) on Friday (Mar 8) dismissed the plea moved by the grand old party seeking a stay against Income Tax Department proceedings of recovery and freezing of their bank accounts stating that the application was without merit.

ITAT bench of GS Pannu, Vice President and Anubhav Sharma, Judicial Member passed the order that said, "We do not find that the recovery notice under Section 226(3) of the Act issued by the Assessing Officer on February 13, 2024 is lacking in bona fides, so as to require us to intervene."

"At this stage, we may also refer to the reliance placed by the Senior Counsel on various judgments of the Coordinate Benches in order to support the proposition that it was an accepted practice at the level of the Tribunal that the taxpayer is entitled to a stay on the recovery proceedings on payment of 20 per cent of the demand during the pendency of the Appeal before the Tribunal. The aforesaid argument, in our view, is too general and does not merit acceptance," the bench said.

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"Moreover, as we have already discussed each application for a stay has to be decided on its own facts and circumstances, and there can be no generalized approach. The Stay Application is without merit and, it is dismissed accordingly," said the bench.

Senior Advocate Vivek Tankha who appeared for Congress had requested to keep the order in abeyance for 10 days so that the party can approach the High Court.

However, the bench declined the same saying that "we have no such provision or prayer before us".

'Will move to High Court very soon,' says Tankha

Tankha, who is Congress' legal cell head, said the party was disappointed by ITAT's order and that they would be approaching the Delhi High Court very soon.

"We are disappointed with the Income Tax Appellate Tribunal order. We will be moving the High Court very soon. They have not followed their own past precedents in granting relief on payment of 20 per cent penalty and that too to a national party which is now on the verge of contesting national elections, which are going to be notified soon," Tankha told news agency PTI.

Congress treasurer Ajay Maken accused the ruling Bharatiya Janata Party (BJP) of deliberately choosing the timing to coincide with national elections.

"How can one expect fair elections in such a situation when funds to the tune of Rs 270 crore have been frozen or taken away by the Income Tax authorities from Congress party's accounts," he said.

Congress president Mallikarjun Kharge took to his official X handle and wrote, "Power drunk Modi Government has frozen the accounts of the country's largest Opposition party - the Indian National Congress - just before the Lok Sabha elections."

"This is a deep assault on India's Democracy," he added.

The grand old party's main bank accounts were frozen in February over an income tax demand of Rs 210 crore. However, later an I-T appellate tribunal allowed it to operatepending further hearings.

(With inputs from agencies)