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Ahead Of Lok Sabha Polls, Congress Stares At A Financial Crisis

The Congress party is staring up at yet another financial setback. The Income Tax Department is expected to demand Rs 523.87 crore for what they deem as “unaccounted transactions” covering the years from 2014 to 2021.

As the 2024 Lok Sabha elections approach, this demand comes on the heels of another blow, as the party recently had Rs 135 crore withdrawn from its bank accounts by the I-T department to settle previous dues. The discovery of these “unaccounted transactions” traces back to Income Tax raids conducted before the 2019 Lok Sabha elections.

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Congress leader and Rajya Sabha member V K Tankha, also a skilled lawyer, expressed concerns about potential fines and interest being added to the Rs 523.87 crore demand by the Income Tax Department. Tankha highlighted the significant impact of the recent Rs 135 crore withdrawal before the general elections, stating, “What is left to cripple?”

This latest development adds to the ongoing legal challenges confronting the Congress party regarding the tax issue. Previously, the Election Commission had sought a Central Bureau of Investigation inquiry into the same case.

The Income Tax Department coordinated raids at 52 locations on April 7, 2019. In 2023, it sent a “satisfaction note” to the Congress party, alleging pay-offs linked to fund collections for the 2013, 2018, and 2019 Madhya Pradesh Assembly elections.

The “satisfaction note” is a document from the tax department to the investigated party, like the Congress Party here. Party lawyers claimed it took too long to issue. However, the High Court stated the party sought help only days before tax assessments, which was insufficient time.

In its March 22 ruling, the Delhi High Court cited evidence gathered during the raids indicating pay-offs to the Congress party from employees of the MEIL Group. The Megha Group was revealed as the second-largest donor to political parties, contributing Rs 110 crore to the Congress during October-November 2023.

During the proceedings, Congress lawyers told the Delhi High Court that audited expenses for the 2019 Lok Sabha elections totalled Rs 860 crore. However, they voiced doubts regarding similar costs for the 2024 polls.

Rajya Sabha member Digvijay Singh acknowledged the Congress party’s financial challenges. His name appeared in evidence found at the residence of Praveen Kakkar, an aide to the former Chief Minister Kamal Nath. Alleged payments of Rs 90 lakhs to him and other Congress MLAs were cited as “substantial evidence” of unaccounted transactions in the Delhi High Court’s judgment.

Singh criticized the timing of new tax demands just weeks before the Lok Sabha polls, calling it vendetta politics. He also cited an I-T Department notice for violations totalling Rs 14 lakhs for 1994-95, labelling it a witch-hunt. Singh underscored the financial hurdles impeding the Congress party’s election campaign and operations.

The financial setback seems to be hurting its local units on ground. Kerala Congress Leader V.D. Satheesan revealed that the party lacks funds for basic expenses like buying “a glass of lime juice for election workers.”

The Lok Sabha elections, covering 543 seats, will occur in seven phases from April 19 to June 1, with vote counting slated for June 4.

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