Refuting allegations of mismatch in its actual and reported income for the year 2014-15, the Aam Aadmi Party (AAP), in its response to a show cause notice, has questioned the Election Commission’s (EC’s) reliance on an I-T report — the accuracy of which has been challenged before tax authorities.
The EC had served a show cause notice to AAP on September 11 seeking the latter’s response, within 20 days, on why its recognition should not be withdrawn for, allegedly, concealing its actual income in the financial year 2014-15.
Earlier this year, as first reported by The Indian Express on January 9 this year, the Central Board of Direct Taxes (CBDT) had flagged an alleged discrepancy in AAP’s actual and reported donations to the EC. In his missive to the then Chief Election Commissioner (CEC) AK Joti, CBDT chairman Sushil Chandra had informed the EC that AAP had not disclosed the source of Rs 13.16 crore worth of donations.
The EC’s show cause notice reiterated CBDT’s findings, including the one that highlights the mismatch between total credit of Rs 67.67 crore (from donations in excess of Rs 20,000) in AAP’s bank account and the total income of Rs 54.15 crore disclosed by the party in its audited accounts shared with the Commission.
AAP, in its defense, is learnt to have told EC that the above allegation is based on an erroneous assessment of its bank accounts by the Assessing Officer (AO), which has been challenged by the party before the Commissioner of Income Tax (Appeals).
According to the party, the total credit of Rs 67.67 crore in AAP’s bank account should not be labeled as income from political contributions, since all credits were not meant to be donations. Out of Rs 67.67 crore, the party said, about Rs 42 crore was contributed as donations. Moreover, AAP has reiterated that the AO’s findings and the party’s counter claims are currently under appeal before the tax authorities.
Responding to the allegation that the party concealed donations received through four hawala operators as voluntary contribution, AAP has maintained that all four donations were received through bank drafts and it was disclosed in the audited accounts of the party.
It has further said that all four donor companies, which collectively gave Rs 2 crore, are private companies incorporated under the Companies Act 1956, and it’s not possible to certify the credentials of each and every donor.
The EC show cause notice had also pointed out that the party had made incorrect disclosures on its official website and furnished false information under Section 29C of the RP Act. Section 29C mandates all political parties to disclose details of all donations, in excess of Rs 20,000, received from individuals and companies.
The notice mentions that the party had changed/revised its Contribution Report once the correctness of the same was questioned. To this, AAP has said that the AO has based his allegation of discrepancies in the donations disclosed on the party’s website and the Contribution Report submitted to EC on a newspaper report, which is not legally acceptable evidence.
As for the party revising the contribution report submitted to the EC, AAP has said that Sections 29 C of the RP Act and 139 of the Income Tax Act permit changes in contribution report within a stipulated time period. According to AAP, the report was revised within the permitted period.