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India’s main opposition party faces action from tax department

The bank accounts of the Congress and its youth wing were temporarily frozen on Friday

The Congress, the largest opposition party in India, claimed on Friday that its bank account had been frozen by the Income Tax Department on “flimsy grounds,” and described the move as a “severe blow to democracy.”

After the party later challenged the move, the Income Tax Appellate Tribunal granted it relief and activated the accounts until a final hearing next week, with one condition: The party has to ensure that 1.15 billion rupees ($13 million) is maintained in its bank accounts.

The Congress, India’s oldest party and which is now in opposition to the ruling Bharatiya Janata Party (BJP) led by Prime Minister Narendra Modi, linked the clampdown to the upcoming national elections scheduled for May. It has experienced a series of setbacks recently with key leaders exiting the party, and some of them joining the rival BJP.

Ajay Maken, the treasury secretary of the Congress, told the media on Friday that the move by the Income Tax Department is related to a 45-day delay in filing income tax returns for 2018-2019, resulting in a tax claim of 2.1 billion rupees ($25 million). He claimed the move was “politically motivated” and “strategically timed” ahead of the elections. “We don’t have any money to spend, to pay electricity bills, to pay salaries to our employees,” Maken said. According to the party, the accounts of its youth wing – the Indian Youth Congress – have been frozen as well. 

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De-facto Congress leader Rahul Gandhi, who is on a 6,000-kilometer tour across the country campaigning ahead of the elections, said on X (formerly Twitter), “We have never bowed down before dictatorship, nor will we ever bow down. Every Congress worker will fight tooth and nail to protect India’s democracy.” Other party leaders appealed to people to “save democracy.” 

The development comes a day after the country’s Supreme Court struck down the electoral bonds system that permitted individuals and companies to donate money to political parties anonymously and without limits. It was introduced by the Modi-led government in 2018. While the BJP received the most donations – 65 billion rupees ($791 million), the Congress accumulated around 11.2 billion rupees ($135 million) during the same period. Maken argued that the Congress’ frozen funds were raised through crowdfunding and hence could not be ruled unconstitutional as per the latest verdict. “It appears we do not have democracy in India anymore,” he said, lamenting alleged attempts to impose a “one-party system” in the country.

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