ON April 3, a Supreme Court division bench comprising Justices Kuldip Singh and Faizanuddin delivered a 30-page scathing attack on the state of political funding. The Supreme Court judges insisted that political parties file their income-tax returns and also plugged a long-exploited loophole by making it clear that all poll expenditure incurred by political parties shall be assumed to have been authorised by the candidate, unless otherwise proven, through its audited accounts and income-tax returns.
What had been happening so far was that all expenditure incurred by candidates beyond the maximum permissible limit was, under Section 77 of the Representation of the People Act, 1951, termed as expenditure incurred by the candidate's party, which could never be accounted for since the parties weren't filing their audited accounts or tax returns. The apex court has made it clear that unless the parties file their tax returns and get their accounts audited, they cannot seek exemption under this section.
The judges also clarified that under Section 324, the Election Commission can issue directions to the political parties to submit all election expenditure for its scrutiny. Besides, it also held political parties guilty for not filing tax returns for several years. In fact, the Government, in its affidavit, had itself admitted that the BJP had not filed any tax returns till December 1995, while the Congress was issued notices in December 1995 and January 1996. In its affidavit, the Congress said that returns for the years 1993-96 had been filed on December 14, 1995. The Janata Dal has never filed its tax returns, despite the fact that it has been slapped with two notices during the past year. The AIADMK and the DMK have filed their returns occasionally, and the only parties who have been doing so regularly are the CPI and CPI(M).
