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Over 2,000 registered unrecognised erring parties face EC action

The Times of India logo The Times of India 26-05-2022 Bharti Jain
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NEW DELHI: Cracking the whip on more than 2100 registered unrecognised political parties (RUPPs) – which constitute almost three-fourth of the total RUPPs as of September 2021 – for failing to comply with the statutory requirements relating to filing of contribution reports, annual audit reports and election expenditure reports and also intimating change in address and other details, the EC has initiated graded action against them under Section 29 of the Representation of the People Act, 1951.

Sources said that the decision to act against unrecognised parties – whose numbers grew from 694 in 2001 to 2796 in 2021, though only 623 contested the general elections in 2019 – comes even as EC awaits the government’s decision on its request for powers to deregister political parties. The graded action is expected to bring errant parties under pressure to either comply with the statutory and legal requirements or exist at the cost of facing action under the extant laws.

EC, as part of directions issued on Wednesday – within days of chief election commissioner Rajiv Kumar assuming charge -- said the names of 87 RUPPs whose addresses were not verifiable by the respective chief electoral officers (CEOs), will be deleted from the register of unrecognised parties. The aggrieved parties may approach the concerned CEO within 30 days with evidence of existence and yearwise contribution reports, audited accounts and updated office bearers list including authorised signatories for bank transactions. The segregated list of such RUPPs shall be sent to CEO as well as Central Board of Direct Taxes (CBDT) for requisite action.

Any failure to fulfil these statutory obligations will result in denial of benefits to the RUPPs under the Symbols Order, 1968, including issue of common poll symbol in the future, said the order passed by Kumar and election commissioner Anup Chandra Pandey.

Three RUPPs prima facie found to be involved in serious financial impropriety such as generating bogus donation receipts, formation of shell entities, tax evasion etc, shall invite action under the extant laws including loss of benefits under Symbols Order. EC said it will send a reference to the department of revenue for taking necessary legal and criminal action against them.

The EC decided that the list of 2174 RUPPs (92% of total RUPPs) that have not submitted their contribution reports in 2019, shall be sent to the department of revenue for taking all consequential action as per R P Act and Income Tax Act which may include withdrawing or holding back tax exemption or imposing liability for wrongly claiming exemption.

Similarly, CEOs shall put out the list of 2056 RUPPs that did not file their annual audit report in 2019, on their websites and give them the opportunity to comply within 30 days. Hundred RUPPs who failed to furnish election expenditure statements have also been given 30 days to comply, to avoid action.

CBDT had informed EC that 199 RUPPs took income tax exemptions totalling Rs 445 crore in 2018-19 and 219 RUPPs took I-T exemptions worth Rs 608 crore in 2019-20. As many as 66 claimed the tax exemption without submitting their contribution reports in Form 24A as required by Section 29 C of R P Act.

Some of the illegal advantages that unrecognised parties take, without ever contesting polls, are claiming income-tax exemptions on contributions received and fielding candidates only to demand money from recognised parties for withdrawing their nomination etc.

“It amounts to fraudulent use of privileges and public trust available to them,” the EC said on Wednesday.

Incidentally, CEC Rajiv Kumar had, in his early days as finance secretary, ordered a similar action to tackle shell companies which at the time totalled 3.29 lakh.

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