With Lok Sabha elections 2024 just around the corner, Congress is preparing for yet another significant demand from the Income Tax Department, amounting to a total of Rs 523.87 crore in “unaccounted transactions” spanning the period from 2014 to 2021. This impending demand adds another blow to the party, which recently experienced the withdrawal of Rs 135 crore from its bank accounts by the I-T department to settle previous dues. The discovery of the “unaccounted transactions” dates back to I-T raids conducted before the 2019 Lok Sabha elections.
Congress leader and Rajya Sabha member V K Tankha, who is also a skilled lawyer, told The Indian Express that the party is worried that the Income Tax Department might add a big fine and interest to the Rs 523.87 crore when calculating the new demand. “Not satisfied with crippling us by withdrawing the lien amount of Rs 135 crore on the eve of general elections, a bigger setback is expected, thus crippling us further. But what is left to cripple?”, Tankha said.
This recent development adds to the ongoing legal battles faced by the Congress party in connection with the tax matter. The Election Commission had previously requested a Central Bureau of Investigation inquiry into the same case.
The Income Tax Department conducted simultaneous raids in 52 locations on April 7, 2019. Finally, in 2023, it had dispatched a “satisfaction note” to the Congress party for alleged pay-offs having traced these to fund collections for the 2013 Madhya Pradesh Assembly elections, the 2018 Madhya Pradesh Assembly Elections and the 2019 Lok Sabha elections.
A “satisfaction note” is a document that the tax department gives to the party being investigated, like the Congress Party in this case. It’s prepared by one officer and given to another officer. The party’s lawyers said it took too long for the tax department to do this. The High Court said the party only asked for help a few days before the tax assessments were done, which wasn’t enough time.
In its March 22 ruling, the Delhi High Court listed evidence collected during the raids, which showed pay-offs to the Congress party from employees of the MEIL Group. The Megha Group had emerged as the second-largest donor to political parties, donating Rs 110 crore to the Congress during October-November 2023.
During the proceedings, Congress lawyers informed the Delhi High Court that the audited expenses for the 2019 Lok Sabha elections amounted to Rs 860 crore. However, they expressed scepticism about similar expenses for the 2024 polls.
Rajya Sabha member Digvijay Singh stated that the Congress party was facing serious financial constraints. His name also appeared in the evidence collected from the residence of Praveen Kakkar, OSD to then Chief Minister Kamal Nath. Alleged payments of Rs 90 lakhs to him (along with several other Congress MLAs) were listed as “substantial and concrete evidence” of unaccounted transactions in the Delhi High Court judgment.
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Singh condemned the timing of fresh tax demands just weeks before the Lok Sabha polls, labelling it as vendetta politics. He also mentioned a notice from the I-T Department for violations amounting to Rs 14 lakhs for 1994-95, describing it as a witch-hunt. Singh highlighted the financial challenges hindering the Congress party’s election campaign and operations.
The Lok Sabha elections, spanning 543 seats, will be conducted in seven phases from April 19 to June 1, with vote counting scheduled for June 4.