The arrest of Arvind Kejriwal and tax notices issued to Opposition parties stir up both domestic and international disquiet

Political heat is also on the rise with the soaring temperature in Delhi after the arrest of Delhi chief minister Arvind Kejriwal and tax notices to opposition parties. Political development in India has invited criticism from Germany, US and even United Nations, more particularly on the arrest of Delhi chief minister Arvind Kejriwal who is facing corruption charges and many of his cabinet ministers are already in jail.

Perhaps western powers are still in the colonial hangover and carrying a false sense of superiority believing that they can meddle in the internal affairs of any country. Perhaps it is high time for them to smell the coffee and adjust to the realities of the twenty-first century. World is not ready to accept the sermons on democracy from those who have a track record of toppling the democratically elected Governments and siding with autocratic regimes to achieve their own means.

Political parties which are part of INDI alliance have received Income Tax (IT) notice and principal opposition party Congress is one of them. IT officials should show some maturity and issuing notices on merely technical grounds is not going to help the Indian democracy. If the position taken by the IT officials is applied across all assessments, then it would be difficult to find any political party which is fully compliant.

In terms of technical requirements as per the law, section 13A of the IT Act casts a requirement to maintain the detail of every donor (viz name and address) and Section 29C of the Representation of the People’s Act, 1951 requires the political party to file these details with the Election Commission of India (ECI).

Contribution report filed by all major political parties with the ECI and available on its website shows that data quality issues persist across the details provided by all the parties. IT authorities need to look beyond what has been submitted in the return filed with ECI and they must be answering the question, if in-substance they are in possession of any information which can establish the donor’s credentials. Section 13A of the Income Tax Act, 1961 clearly provides that any donation more than Rs. Two thousand must be received via banking channels and if any political party is compliant with this requirement, then it is for the tax officials to explain what difficulty they are facing in corroborating the details when donations are coming via bank?

As per media reports, communist party of India (CPI) has received IT notice quoting its old income tax PAN in the filing and questions should be asked from tax officials on what was the bonafide intent in sending notice to the assessee? How this error has impacted the cause of transparency and why couldn’t CPI be provided an opportunity to correct this kind of error by updating the PAN? 

This country does not need a bureaucracy which goes on unleashed and those who are defending harassment over trivial issues should think from a long-term perspective. Bureaucrats are not answerable to the public but politicians should be conscious of the message which gets disseminated from the actions of babus. Treasurer and office bearers of Congress, CPI or any other political outfit can be criticised for not following appropriate procedures so far as it relates to filing the necessary details or pursuing the income tax notices, or filing an appeal with income tax appellate tribunal but as a democracy we must not give a free run to bureaucrats to manage the show in accordance with their whims and fancies.

Though people’s memory is very short, I would like to remind you of the retrospective amendment done in Foreign Contribution Regulation Act (FCRA), 1976 to bailout both BJP and Congress. In 2014, Delhi high court found both BJP & Congress guilty of receiving foreign contribution in violation of FCRA and therefore the law was amended first in 2016 and applied retrospectively since the inception of FCRA, 1976 via another amendment in 2018. This issue was also technical in nature and the current income tax issue is also technical in nature.

We are the largest democracy in the world and such instances which appear to be over enthusiasm of tax officials to please their bosses is not in a good taste. There are a lot of cases pending with the agencies and they should be told to focus on those rather than bringing new topics for discussion which create unnecessary noise and have no practical value. On a lighter note, now seasoned politicians would have understood how the common man of the country feels when it gets tax notices on frivolous grounds which gets quashed but only after following a prolonged appellate procedure.

(The writer is Chartered Accountant, Author and Public Policy Analyst; views are personal)