India’s Congress says $25m frozen by tax department ahead of election

Main opposition party says bank accounts frozen just weeks before the expected announcement of the general election.

Rahul Gandhi, a senior leader of India's main opposition Congress party, gestures as he addresses the media in New Delhi
Senior Congress leader Rahul Gandhi gestures as he addresses reporters in New Delhi [File: Altaf Hussain/Reuters]

The Indian National Congress party says its bank accounts with 2.1 billion rupees ($25.3m) in deposits have been frozen by the Income Tax Department months before the national election.

The main opposition party on Friday called the action “a deep assault on India’s democracy”, adding that an income tax tribunal has allowed it to partially operate its accounts until February 21 when it would hear the case.

Congress treasurer Ajay Maken told reporters the party has filed a complaint against the tax department after it told banks to freeze funds in its accounts.

“We got information two days back that cheques being issued by us were not being honoured by banks. … We don’t have money to pay electricity bills, to pay salaries to our employees,” Maken said.

The tax department’s action comes just weeks before dates for a general election, which has to be conducted by May, are to be announced.

It also came a day after the Supreme Court, in a landmark order, declared a secretive election funding system, called the electoral bonds, as illegal. The scheme was launched by Prime Minister Narendra Modi’s government in 2017.

“When the principal opposition party’s accounts have been frozen just two weeks before the announcement of the national elections, do you think democracy is alive in our country?” Maken asked reporters.

“Don’t you think it is going towards a one-party system?”

Maken said the 2.1 billion rupees frozen by the tax department was collected by the party through crowd funding and membership drives, adding that the dispute with the tax department was in connection with an issue dating back to 2018-2019.

Maken conceded that the party had filed its returns late by up to 45 days but insisted it had done nothing to warrant such a penalty.

“Today is a sad day for Indian democracy,” he said, adding that the party was appealing the decision and would stage public protests.

The power of Congress, once India’s dominant party, has sunk to historic lows in parliament and in many states after Modi and his right-wing Bharatiya Janata Party (BJP) swept to power in 2014.

Critics and human rights groups have accused Modi’s government of using law enforcement agencies to selectively target its political foes.

“Power drunk Modi Govt has frozen the accounts of the country’s largest Opposition party,” Congress President Mallikarjun Kharge posted on X. “We appeal to the Judiciary to save the multi-party system in this country and protect India’s Democracy.”

Virendra Sachdeva, president of the BJP’s Delhi branch, said Congress had only itself to blame for the freezing of its accounts.

“It is unfortunate that a big party like Congress is not following government rules,” he told the Press Trust of India news agency.

“If it is not following the rules, then it has to face the consequences.”

Agencies ‘behaving as BJP’s handmaidens’

Friday’s announcement follows numerous legal sanctions and active investigations against leading opponents of the BJP.

Congress party leader Rahul Gandhi, scion of the Gandhi-Nehru dynasty, which dominated Indian politics for decades, was convicted of criminal libel last year after a complaint by a BJP legislator.

Gandhi’s two-year prison sentence saw him disqualified from parliament for a time until the verdict was suspended by a higher court, but it raised concerns over democratic norms in the world’s most populous country.

Congress is a member of an opposition alliance hoping to challenge Modi at this year’s polls. Other leading figures in the bloc have also found themselves under investigation.

Arvind Kejriwal, leader of the Aam Aadmi Party and chief minister of the capital region Delhi, has repeatedly been summoned by investigators probing alleged corruption in the allocation of liquor licences.

This month, police arrested Hemant Soren, until then the chief minister of the eastern state of Jharkhand and another leading figure in the opposition alliance, for allegedly facilitating an illegal land sale.

India’s main financial investigation agency, the Enforcement Directorate, has ongoing probes against at least four other chief ministers or their families, all of whom belong to the BJP’s political opponents.

The recent record of government agencies showed they were “behaving as handmaidens of the ruling party to cow down the political opposition”, Hartosh Singh Bal of current affairs magazine The Caravan told the Agence France-Presse news agency.

Other investigations have been dropped against erstwhile BJP rivals who later switched their allegiance to the ruling party.

Surveys suggest the BJP is likely to win a third successive victory in this year’s election, in part because of Modi’s supremacist appeal to India’s Hindu majority.

The Congress is also forecast to slightly improve its position in the vote.

Source: Al Jazeera and news agencies