New Delhi: A political party operated from a watch repair shop that had accepted Rs 370 crores in donations in the past three years! This is just one of the examples in which the Income Tax department has busted several registered but unrecognised political parties in Sultanpur, Uttar Pradesh. They took crores in donations and operated from slums, shops and flats across the country.
The person running the watch repair shop said he was the president of the political party but had no idea about the donations or certificates provided for the donations. The person also said that the party state president who resides in Gujarat’s Ahmedabad could be involved, India Today reported.
Based on this information, the tax officials at Ahmedabad traced the state president of the party. When questioned, he confessed that he provided the donation certificates for a commission of three per cent. The remaining money was passed through several layers of entities and then returned to the persons and entities making the donation in cash. Two more such parties were covered in Uttar Pradesh.
Income Tax officials then reached a dense slum pocket in Mumbai’s Sion and found the registered office of one such party located in a hundred-square feet shanty. This party accepted around Rs 100 crores in donations in the past two years as per the bank records. The barely hundred square feet office was of the said political party, which is a registered political party but not recognised as per the Election Commission of India (ECI), the report added.
Sources said that the party president, when questioned by IT officials, said that he enjoyed his status and being called a party president but the party was floated and all the donations and other related activities were handled by the auditor who stayed and operated from Ahmedabad in Gujarat.
Sources said that the party had accepted around Rs 100 crores in donations and provided certificates for the same. These certificates were then used by people to get Tax exemption under relevant sections of the Income Tax Act. The donated sum was returned in cash after passing through several layers of entities and firms created by the auditor for the party after deducting a percentage of 0.01 per cent.
Another such party which was searched and surveyed by the Income Tax department in Mumbai was located in the North Western suburbs of Mumbai in Borivali. Here the said party operated from a tiny flat. The party had accepted donations of around Rs 50 crores from various persons and entities using the same modus operandi. The donations were passed through several firms and entities and then returned to the person or entity donating it in cash after deducting a similar percentage as in the first case.
Across the country, around 205 such places and several such political parties were raided which were being used by entry operators for providing entries and tax exemption to entities and persons.
The total quantum of donations received by such parties in Mumbai and Gujarat could be more than Rs 2,000 crores as per the primary estimate and could grow further.
Mostly, many such parties are run from Ahmedabad in Gujarat. A team of Income Tax officials which included over 120 officers and Inspectors were sent from Mumbai to carry out the raids in Gujarat on 21 such political parties.
Similar raids were conducted by tax officials in Delhi-NCR, Uttar Pradesh and Rajasthan.
According to sources, there are 2099 registered political parties in India. Out of that, 2044 are registered but unrecognised parties and only 55 parties are recognised. Political parties are exempt from any kind of income tax for the donations they receive.
According to sources raids will continue on Thursday as well.
