NEW DELHI: The Congress today demanded a Joint Parliamentary Committee (JPC) probe into the Rs 10,000-crore tax evasion racket involving 3,260 registered unrecognised political parties (RUPPs), and sought criminal action against those involved.
Senior Congress leader and party spokesman Shaktisinh Gohil on Wednesday revealed that more than Rs 10,000 crore in black money had been generated through ‘registered unrecognised political parties’ (RUPPs), accusing the BJP and its associates of using such entities to facilitate tax evasion.
Addressing a press conference in New Delhi, Gohil disclosed that around 3,260 RUPPs were being used as a mechanism through which individuals and companies could claim tax deductions on donations made to political parties, while a portion of the money was returned to donors as cash after deducting commissions.
“More than Rs 10,000 crore of black money has been generated through these fake political parties and there has been an open loot of tax revenue,” Gohil said.
Stating that donations made to political parties qualify for tax benefits under provisions of the Income Tax Act, including Sections 80GGB and 80GGC, he remarked that by misusing these provisions, donations amounting to more than Rs. 10,000 crores were made to these bogus political parties. According to him, the racket involved retaining commissions ranging from two to 15 per cent and returning the remaining amount to donors in cash.
Gohil said that individuals with taxable income above Rs 5 crore could face an effective tax burden of over 42 per cent after accounting for basic income tax, surcharge and cess, and noted that such arrangements were being exploited to evade legitimate tax liabilities. He further said that tax authorities and tribunals had detected instances of such “fraud”, but questioned why criminal prosecution and penalties had not been imposed in the cases concerned.
“If deliberate false entries are made for tax evasion, the law provides for stringent penalties and prosecution,” Gohil said, referring to provisions of the Income Tax Act, including Sections 276C(1) and 277.
He pointed out that despite the detection of such violations, neither the 200 percent penalty nor criminal prosecution carrying a provision of imprisonment of up to seven years had been pursued in the cases he was referring to.
Gohil also questioned the role of the Election Commission, saying its 2014 guidelines on transparency and accountability in political funding required state election authorities to disclose details of donations received and expenditure incurred by political parties and share the relevant information with the Income Tax Department.
He noted that these requirements had not been adequately enforced and demanded action against those involved in creating and operating such political parties.
Gohil demanded a JPC probe into the fake political party donation racket, along with 200 percent penalty against bogus donors, criminal cases against chartered accountants and those running such parties. He also sought public disclosure of the donors and companies involved and details of those linked to such parties who have subsequently joined the BJP and are currently serving as its office-bearers.
Accusing the BJP government of adopting a dual approach towards black money, Gohil said, “Modi ji remains silent on black money while the country is being run on what we call fake GDP figures.”
