India's Congress party says $25m frozen by tax department

The party calls the action ‘a deep assault on India's democracy’, adding that a tribunal has however allowed the party to partially operate its accounts until Feb 21

Men sit under a banner carrying a portrait of chief of India's Congress party Sonia Gandhi outside the Congress office in New Delhi May 16, 2014. REUTERS

India's main opposition Congress party said on Friday its bank accounts with 2.1 billion rupees ($25.3 million) in deposits had been frozen by the income tax department in connection with a dispute, months before national elections.

The party called the action "a deep assault on India's democracy", adding that an income tax tribunal had however allowed the party to partially operate its accounts until Feb 21, when it would hear the case.

Congress treasurer Ajay Maken told reporters the party had 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.

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 2018-19.

The income tax department did not respond to calls and messages seeking comment.

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.

Congress, once India's most dominant party, has sunk to historic lows in parliament and in many states after Prime Minister Narendra Modi swept to power in 2014.

"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."

There was no comment from the government or Modi's Bharatiya Janata Party.

Surveys suggest Modi will easily win a rare third term in the upcoming election although Congress is also forecast to slightly improve its position.