New Delhi, Aug. 30 -- The Supreme Court is set to hear on Monday a petition challenging a provision of the Income Tax Act, 1961, that permits political parties to accept anonymous cash donations of less than Rs 2,000.
A bench of Justices Vikram Nath and Sandeep Mehta is likely to take up the matter, according to the court's cause list. The Supreme Court had earlier issued notices to the Centre, the Election Commission and other parties seeking their responses to the petition.
The plea, filed by Khem Singh Bhati, challenges Clause (d) of Section 13A of the Income Tax Act, which provides special tax treatment to political parties. It argues that allowing cash contributions below Rs 2,000 without disclosure of the donor's identity reduces transparency in political funding.
According to the petitioner, voters have a right to know who funds political parties and the reasons behind such funding. The plea argues that withholding this information can prevent voters from making a "rational, intelligent and fully informed decision" while exercising their franchise.
The petitioner has asked the court to declare Clause (d) of Section 13A unconstitutional. It has also sought directions to the Election Commission to make disclosure of the donor's name and other particulars mandatory for political parties. The plea further seeks a rule barring parties from accepting any cash donations.
Section 13A provides exemptions from the computation of total income for political parties in relation to income from interest on securities, house property, other sources and voluntary contributions, subject to prescribed conditions.
The plea has also sought greater scrutiny of political parties' contribution reports. It wants the Election Commission to examine Form 24A reports filed by all recognised political parties and require parties to deposit contributions for which the donor's address or Permanent Account Number, or PAN, has not been provided.
It further asks the poll panel to issue notices under the Election Symbols (Reservation and Allotment) Order, 1968, to parties that fail to submit complete Form 24A reports within the prescribed period. The notices, it said, should seek an explanation as to why the party's reserved election symbol should not be suspended or withdrawn.
The petitioner has also sought directions for political parties to maintain their accounts in a prescribed format and have them audited by independent auditors appointed by the Election Commission.
Another request concerns the Central Board of Direct Taxes (CBDT). The plea wants the tax authority to scrutinise the income tax returns and audit reports submitted by political parties under Sections 142 and 143 of the Income Tax Act for the previous five years.
It has also sought appropriate action, including tax, penalty and prosecution, against parties that fail to meet the requirements of Section 13A read with Section 29C of the Representation of the People Act, 1951. Section 29C deals with the declaration of donations received by political parties.
The petition has cited the Supreme Court's 2024 judgment that struck down the electoral bonds scheme. The scheme, notified by the government on January 2, 2018, had been presented as an alternative to cash donations to political parties and as a measure aimed at improving transparency in political funding.
The petitioner has argued that the principles laid down by the Supreme Court in that judgment also warrant greater disclosure of political contributions received in cash.
Published by HT Digital Content Services with permission from Millennium Post.