IT clears Cong, slaps Rs 18 lakh tax on BJP

Strangely, the BJP has been slapped with a tax liability of Rs 18 lakh. The party has preferred to go in appeal against the order of the Deputy Commissioner Exemptions R P Singh who incidentally is the son of former Union Home secretary B P Singh.

When contacted, R P Singh declined to comment saying, 8220;I am on leave.8221; A C Chandra, the additional commissioner dealing with the cases of political parties said, 8220;I cannot comment on the cases.8221;

However, V P Goel, BJP8217;s treasurer and Rajya Sabha MP, told The Indian Express that the returns were filed in time and exemptions had been given by the authorities. 8220;However, a penalty of Rs 18 lakh has been imposed as income earned through capital gains is disallowed to political parties.8221;

He clarified that it was a mistake of the party to invest in Canstar Bonds. The party was not aware that income through Bonds is not exempted of tax under the IT Act for political parties.

The political parties, it may be mentioned, are exempt from paying income tax under the IT Act 13 A. But the law does not permit any extension of time to political parties to submit return beyond March 31 of every year.

Since most political parties were neither submitting accounts of their income and nor seeking exemptions, a PIL was filed in the High Court to ensure that returns are filed by the parties before they are given tax concessions.

Accordingly, political parties were told to submit their returns to the IT department pertaining to past ten years positively before March 31 this year.

The Congress and the BJP managed to furnish the consolidated accounts of 10 years before the expiry of the deadline and got the exemption order accordingly.

When contacted, Ahmad Patel, treasurer of the Congress party and Rajya Sabha MP confirmed, 8220;We have submitted our returns and got the exemptions as were available under the law.8221;

Had the Congress failed to submit its return of the past ten years, a tax liability of over Rs 100 crore would have been imposed on the party.

The most crucial period for the party was of finding the names of the NRI donors who donated Rs 3.75 crore during 1993-94 and 1994-95. The authorities wanted the name of the donors to be furnished before the tax exemptions could be given. The party took almost six months to gather the required information and that too after a PIL was filed in the Delhi High Court. A separate case under the FCRA is still pending though the Union Home Ministry has informed the court that the donor was indeed belonged to an NRI. A final verdict is yet to come. However, the Congress has got tax exemptions as were required under the law.

Documents submitted to the IT department by the Congress revealed that the total income during the past ten years was Rs 110 crore. The BJP was a poor second with an income of Rs 30 crore.

The documents showed that the income of the Congress party grew from Rs 7 crore in 1990-91 to Rs 18 crore in 1992-93 after it came to power. It dwindled to Rs 10 crore in 1995-96 and during the past two years it is struggling to get money to pay to the staff of the AICC and general maintenance. The party could generate less than Rs 4 crore during 1997-98. It showed no signs of improvement in the next year too.

However, the BJP has shown remarkable rise in its income. 8220;Our income was in lakhs until a few years ago. It is only during the past three years that we have got donations running into crore,8221; said V P Goel.