SC to hear on Jan 11 plea against tax exemption to pol parties

New Delhi, December 23


The Supreme Court today said it would next month hear a plea seeking quashing of a provision of the Income Tax (IT) Act on tax exemption to political parties on receiving voluntary contributions.

A bench of Justices Ashok Bhushan and L Nageswara Rao said there was no urgency in hearing the plea as the law has been in force for over 50 years and added that it would take it up on January 11.

“You are challenging a provision of the IT Act which is there since 1960s. What is the urgency? Let the matter come up before the court after vacations. This Act is going on for over 50 years,” the bench told petitioner advocate M L Sharma.

Sharma urged the court to hear the matter today itself and claimed that on December 16, the government had declared that no investigation will be carried out against political parties’ accounts on deposit of old demonetised notes as per the tax exemption given under section 13A of the IT Act.

He said old currency notes were being deposited in the accounts of political parties and “the problem is that they would withdraw the money”.

The bench then said “what is going to happen in the next one week? Let the matter come up for hearing on January 11”.

In his plea, the petitioner has claimed that political parties registered with Election Commission of India are 100 per cent exempt from paying income tax under section 13A of the IT Act, 1961, so long as they file their tax returns every assessment year along with their audited accounts, income or expenditure details and balance sheet.

He has sought a direction to the CBI to register a case and investigate fundings and deposits in the accounts of political parties in demonetised currency notes.

Besides, the petitioner has also sought quashing of a provision of the Representation of the People Act 1951 which relates to “special provisions in the case of certain elections”.

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