EC sends AAP showcause notice on ‘concealing’ income, party calls it bias

EC sends AAP showcause notice on ‘concealing’ income, party calls it bias

The party has been asked to respond within 20 days, failing which the EC will decide the matter based on the “information available on record”.

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Delhi Chief Minister Arvind Kejriwal. (Express file photo)

THE ELECTION Commission (EC) served a showcause notice to the Aam Aadmi Party (AAP) on Tuesday, asking why its recognition should not be withdrawn for allegedly concealing its actual income for 2014-15 financial year.

The party has been asked to respond within 20 days, failing which the EC will decide the matter based on the “information available on record”.

Earlier this year, as first reported by The Indian Express on January 9, the Central Board of Direct Taxes (CBDT) had flagged to the EC an alleged mismatch in AAP’s actual and reported donations. In his missive to then Chief Election Commissioner (CEC) A K Joti, CBDT chairman Sushil Chandra had said that AAP had not disclosed the source of donations adding up to Rs 13.16 crore.

The EC’s showcause notice reiterates the CBDT’s findings, including the discrepancy between total credit of Rs 67.67 crore (from donations in excess of Rs 20,000) in AAP’s bank account and total income of Rs 54.15 crore disclosed by the party in its audited accounts shared with the poll panel.


“Therefore, it has been held by the assessing officer that Rs 13.16 crore has not been accounted for by the party and these donations have been held to be from unknown sources,” says the notice. Additionally, the EC has also pointed out that CBDT allegedly found Rs 2 crore worth of hawala entries as voluntary donations.

READ | CBDT red-flags mismatch in AAP donations to Election Commission

“The (CBDT) report states that the party has made wrong disclosures on its official website and also furnished incorrect information under Section 29(C) of the RP (Representation of the People) Act. It details how the party has changed/ revised its contribution report once the correctness of the same was questioned. In conclusion, it is stated that its disclosures to the Election Commission in the form of contribution report are incorrect,” says the notice.

Section 29 (C) of the RP Act 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 party from any tax relief on its income under the Act.

The EC has interpreted these violations as a contravention of its ‘Transparency Guidelines’ of 2014, making AAP liable for action under PARA 16(A) of the Election Symbol (Reservation and Allotment) order of 1968. This provision empowers the EC to “suspend or withdraw recognition of a recognised political party for its failure to observe the Model Code of Conduct or follow lawful directions and instructions of the Commission”.

A recognised state party (which AAP is) has the right to have an election symbol reserved for all candidates contesting on its ticket in the assembly elections of the state.Reacting to the EC’s notice, AAP said it was based “on poor interpretation of basic accounting practices by CBDT” and the poll panel has merely reproduced CBDT’s observations. “Even bank transfers between different state units of Aam Aadmi Party have been treated as fresh donations. Such observations show deep-rooted bias of statutory authority against a law-abiding political party,” AAP said in its press statement on Tuesday evening. The party said it would explain the difference of Rs 13 crore to the EC, just like it had to the CBDT.

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