Introduction
As the nation braces for the pivotal Lok Sabha elections in 2024, the Indian National Congress finds itself embroiled in a financial quagmire, grappling with the specter of a substantial tax demand from the Income Tax Department. This impending demand, amounting to a staggering Rs 523.87 crore, stems from alleged "unaccounted transactions" spanning the period from 2014 to 2021, adding to the party's already precarious financial predicament.
Rahul Gandhi (ANI photo)
The Lingering Aftermath of Past Raids
The genesis of this financial imbroglio can be traced back to Income Tax (I-T) raids conducted prior to the 2019 Lok Sabha elections. These raids, aimed at unearthing potential financial irregularities, laid bare a trail of "unaccounted transactions" totaling Rs 523.87 crore, a revelation that has cast a long shadow over the party's fiscal standing.
The Withdrawal of Funds: A Crippling Blow
Compounding the party's woes, the I-T department recently withdrew a staggering Rs 135 crore from the Congress's bank accounts, a move designed to settle previous tax dues. This withdrawal, executed on the eve of the impending general elections, has dealt a severe blow to the party's financial resources, leaving it grappling with the prospect of further crippling demands.
The Voice of Dissent: Congress Leaders Speak Out
Amidst the unfolding crisis, Congress leader and Rajya Sabha member V.K. Tankha, a senior lawyer, voiced the party's apprehensions about the looming financial setback.
"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 lamented in a candid conversation with The Indian Express.
The Legal Battles: Challenging the Validity of Raids
In a bid to challenge the validity of the I-T raids, the Congress party pursued legal recourse, seeking a stay on the withdrawal of Rs 135 crore from its bank accounts before the Income-Tax Appellate Tribunal (ITAT). However, their appeal was met with disappointment in March, as the tribunal denied their request.
Further compounding the party's woes, the Delhi High Court dealt another blow in March, dismissing the Congress's challenge against the search operations conducted by the I-T department. The party had argued that these operations were "time-barred" and constituted a "delayed action," but the court remained unconvinced.
The Election Commission's Inquiry: Seeking Transparency
Additionally, the Election Commission had previously sought an inquiry by the Central Bureau of Investigation (CBI) into the same tax matter case, as reported on May 24, 2019. This move underscored the seriousness of the allegations and the need for a thorough investigation into the party's financial dealings.
The Satisfaction Note: A Precursor to Potential Penalties
In a move that portended further financial turmoil for the Congress, the I-T department dispatched a "satisfaction note" to the party in 2023, alleging pay-offs traced to fund collections for various elections, including the 2013 and 2018 Madhya Pradesh Assembly elections, as well as the 2019 Lok Sabha elections.
A "satisfaction note" is a critical prerequisite prepared by an Assessing Officer (AO) of the searched entity, in this case, the Congress Party. This note is then handed over to the AO of the assessee, paving the way for potential penalties and further tax demands.
The Legal Quagmire: Delays and Deadlines
In a twist of events, the Congress party's lawyers argued that the I-T department had taken an inordinate amount of time to complete the necessary procedures, citing a lengthy delay in issuing the "satisfaction note." However, the Delhi High Court dismissed this contention, observing that the party had approached the court "only a few days" before the completion of assessments, which were due by March 31.
The Megha Group Connection: Evidence of Pay-offs
The Delhi High Court's order shed light on the evidence collected during the raids, which implicated employees of the MEIL Group (Megha Engineering & Infrastructure Limited) in alleged pay-offs to the Congress party. Notably, the Megha Group had emerged as the second-largest donor to political parties, having donated a staggering Rs 110 crore to the Congress during October-November 2023, according to recently released data on electoral bonds.
The Financial Burden of Elections: An Uphill Battle
During the legal proceedings, Congress lawyers informed the Delhi High Court that the audited expenses for the 2019 Lok Sabha elections amounted to a whopping Rs 860 crore. Tankha, who had argued the ITAT matter and appeared before the Delhi High Court, acknowledged the party's inability to envision such expenses for the upcoming 2024 polls, lamenting the lack of a level playing field.
"Who knows for how many hundred crores the demand for the 2019 raids and searches will be?"
he questioned.
The Cash-Strapped Reality: Voices from Within
Echoing Tankha's concerns, Rajya Sabha member Digvijay Singh candidly admitted that the Congress party was facing a severe cash crunch. Singh's name also featured in the list of evidence collected from the residence of Praveen Kakkar, OSD to the then Chief Minister Kamal Nath. The alleged payment of Rs 90 lakhs to Singh, along with several other Congress MLAs, as per a diary seized from an employee of the MEIL Group, is cited as substantial evidence of unaccounted transactions in the Delhi High Court judgment.
The Cry of Vendetta: Allegations of Political Persecution
Undeterred by the mounting financial challenges, Singh dismissed the timing of the fresh tax demands, mere weeks before the Lok Sabha polls, as a manifestation of "vendetta politics." He decried the I-T Department's actions as a "witch-hunt," citing a notice for alleged violations amounting to a paltry Rs 14 lakhs dating back to 1994-95.
"The fact remains that the Congress doesn't have funds to either release advertisements or to give money to candidates for the Lok Sabha elections or to make travel plans for leaders. They are killing the election campaign of the principal opposition party,"
Singh lamented, painting a grim picture of the party's financial constraints.
The Ripple Effects: Crippling the Opposition's Voice
The ramifications of the Congress party's financial woes extend far beyond the immediate fiscal realm. As the principal opposition party in the world's largest democracy, the crippling of its financial resources threatens to undermine its ability to mount an effective electoral campaign, potentially stifling the very essence of a vibrant and robust democratic discourse.
Conclusion
As the nation stands on the precipice of another pivotal electoral chapter, the financial quandary besetting the Indian National Congress serves as a sobering reminder of the intricate interplay between political power and fiscal prowess. The looming tax demand, coupled with the lingering aftermath of past raids and legal battles, has cast a pall of uncertainty over the party's electoral prospects.
In the face of this adversity, the Congress finds itself at a crossroads, compelled to navigate the treacherous waters of financial constraints while striving to uphold the democratic ideals of free and fair elections. As the nation watches with bated breath, the resolution of this financial imbroglio could very well shape the contours of India's political landscape for years to come.
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