The Central Board of Direct Taxes (CBDT) has flagged an alleged mismatch in AAP’s actual and reported donations to the Election Commission (EC), pointing out that it was in violation of the Representation of the People Act, The Indian Express has learnt.
According to government sources, CBDT chairman Sushil Chandra wrote to Chief Election Commissioner A K Joti on January 3, informing him of the adverse assessment order on AAP’s finances for the financial year 2014-15 (assessment year 2015-16). The missive states that the party contravened provisions of Section 29(C) of the RP Act.
The section deals with declaration of political funding to the government and mandates that all political parties should disclose details of donations, in excess of Rs 20,000, received from individuals and companies. A violation of this provision excludes the political party from any tax relief on its income under the Act.
The AAP was slapped with a notice by the income tax department on November 27 last year. The party responded by claiming that the order was an attempt by the Centre to “crush the Opposition”.
The IT department, based on its assessment, had determined Rs 68.44 crore as the total taxable income of the party for 2015-16. The notice issued to AAP levied Rs 30.67 crore of tax on this income.
Chandra’s letter to Joti lists all findings of the assessment order on AAP’s income, including that the names and addresses of the party donors behind Rs 13.16 crore of audited income and expenditure accounts were not disclosed.
The assessment order also states that AAP allegedly did not record the details of over 450 donors contributing more than Rs 20,000 each, who collectively donated Rs 6.26 crore. Additionally, the assessment order allegedly found Rs 2 crore worth of hawala entries as voluntary donations apart from non-disclosure of Rs 36.95 crore on its website.
That apart, the party has also been accused of not reporting donations worth Rs 29.13 crore from donors contributing more than Rs 20,000 each in its report submitted under relevant provisions of the RP Act to the EC in 2015.
On the basis of the order for the assessment year of 2015-16, the IT department concluded that the AAP has not maintained details of donors contributing in excess of Rs 20,000 each, and allegedly submitted an incorrect report to the EC by not correctly disclosing its income.