As four states and union territory of Puducherry go to polls, the Delhi High Court on Wednesday said the government should take necessary measures to check misuse of money power in elections.
Noting that most of the public funds spent by political parties were “unaccounted”, a bench headed by Justice S Muralidhar said the government and Parliament should give “serious and urgent attention” to Law Commission’s recommendations to ensure money power did not distort the conduct of free and fair elections.
The court dismissed Congress’s claim for exemption from paying income tax for assessment year 1994-95 with regard to “voluntary contributions” received by the party. Since Congress failed to maintain properly audited accounts for the said assessment year, it did not fulfil the mandatory condition for claiming such exemption under the Income Tax Act, it said.
“This case demonstrates the need for a slew of legislative measures that need to be put in place for an effective check on the influence of money on the electoral process,” it noted.
“Considering that political parties are an essential part of our democracy and are dealing in large sums of public money, much of which is unaccounted, the proper auditing of the accounts of the political parties is both imperative (and) critical to the conduct of free and fair elections,” the bench said.
“This will in turn infuse transparency and accountability into the functioning of the political parties, thereby strengthening and deepening democracy,” it said, adding accounts of political parties needed to be audited properly.
The HC asked the government to consider Law Commission’s 255th report on electoral reforms that said only up to Rs 20 crore or 20% of the total contribution of a political party’s entire collection (whether cash/cheque), whichever is lesser, can be anonymous.
Apart from this, the details and amounts of all donations and donors (including PAN cards, wherever applicable) needed to be disclosed by political parties, regardless of their source or amount, the commission had said.
The court also asked the government to consider the commission’s recommendation that each recognised political party should maintain accounts clearly and fully disclosing all the amounts received and the expenditure incurred by them.
The commission had also suggested political parties should have their accounts audited by a qualified and practising chartered accountant from a panel of such accountants maintained by the Comptroller and Auditor General of India and submit accounts to the ECI within six months of the close of each financial year. The EC would make them public on its website.
“It is common knowledge as is widely published in the Press and Media that nowadays in public elections payment of cash to the electorate is rampant and the Election Commission finds it extremely difficult to control such a menace.
“There is no truthfulness in the attitude and actions of the contesting candidates in sticking to the requirement of law,…and there is every attempt being made to violate the restrictions imposed in the matter of incurring election expenses with a view to woo the electorate concerned and thereby, gaining their votes in their favour by corrupt means viz by purchasing the votes...,” the HC said quoting from a 2014 verdict of the Supreme Court.