A Supreme Court petition seeks the confiscation of funds collected by political parties under the 2018 electoral bonds scheme, which was struck down earlier this year. The petitioner calls for a committee led by a former Supreme Court judge to investigate alleged quid pro quo benefits conferred on donors.
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NEW DELHI: A petition has been filed before the Supreme Court seeking the confiscation of all funds collected by political parties under the controversial electoral bonds scheme of 2018. This scheme was struck down by the Supreme Court in February this year, sparking a nationwide debate on political funding transparency.
The petitioner has called for the formation of a committee, led by a former Supreme Court judge, to investigate the alleged illegal benefits conferred as quid pro quo on the donors by public authorities at the behest of political parties. The petition specifically targets the payments received through the electoral bonds, urging for a thorough probe into any unlawful exchanges that may have occurred.
In addition, the plea has requested that the Supreme Court direct the Income Tax Authorities to reopen the assessment of all beneficiary political parties from the financial years 2018-2019 to 2023-2024.
The petitioner argues that the exemptions of income tax claimed by these parties under Section 13A of the Income Tax Act should be disallowed. They further call for the imposition of income tax, interest, and penalties on the amounts received through the electoral bonds.
The electoral bonds scheme, introduced through the Finance Act of 2017, allowed donors to anonymously send funds to political parties by purchasing bearer bonds from the State Bank of India (SBI). This act amended three significant statutes: the Reserve Bank of India Act, the Income Tax Act, and the Representation of People Act, effectively enabling anonymous donations to political parties.
Several petitions were filed challenging the amendments made to these statutes, arguing that they facilitated unlimited and unchecked funding of political parties. Critics claimed that the scheme undermined the transparency of political funding and opened doors for potential corruption.
The Supreme Court’s decision on February 15 to strike down the electoral bonds scheme was seen as a major step towards ensuring transparency in political funding. However, the recent petition highlights ongoing concerns about the funds already collected under the now-invalidated scheme.
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One of the key contentions of the petitioner is that the funds collected through electoral bonds could have been used to grant illegal benefits to donors. They assert that a high-level probe is essential to uncover any such corrupt practices.
“The petition requests the establishment of a committee, chaired by a former Supreme Court judge, to conduct a thorough investigation into the matter.”
-the plea states.
Moreover, the plea emphasizes the need for a retrospective assessment of the tax benefits claimed by political parties on these funds.
“The Income Tax Authorities should reassess the financial records of all political parties that benefited from the electoral bonds scheme from the fiscal years 2018-2019 to 2023-2024,”
-the petitioner demands.
The objective is to ensure that any undue tax exemptions are revoked and appropriate penalties are levied.
The Supreme Court’s ruling in February was hailed by many as a victory for transparency and accountability in political funding. Nonetheless, the petition underscores the importance of addressing the funds already disbursed and ensuring that they were not used to confer illegal advantages.
The petitioner’s call for an independent committee to probe the matter reflects the serious nature of the allegations.
“A thorough investigation, led by a former Supreme Court judge, is essential to restore public trust in the political funding process.”
– the petition emphasizes.
the Supreme Court has unanimously quashed the controversial electoral bonds scheme, along with amendments made to the Income Tax Act and the Representation of People Act that rendered donations anonymous. This decision has significant implications for electoral transparency and the right to information in India.
The court held that the anonymous nature of the electoral bonds scheme was violative of the right to information, which is intrinsically linked to free speech and expression under Article 19(1)(a) of the Constitution. This ruling underscores the importance of transparency in the political funding process.
Furthermore, the Supreme Court directed the State Bank of India (SBI) to disclose the details of all electoral bonds purchased and encashed from April 2019 onwards. This directive aimed to shed light on the flow of money in political campaigns and ensure accountability.
In compliance with the court’s directive, the SBI subsequently furnished comprehensive details of the electoral bonds, including information about the political parties that purchased these bonds. This disclosure has provided crucial insights into the financial dealings of political entities.
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The petitioners before the Supreme Court contended that the details of the purchase and encashment of electoral bonds clearly showed that the money paid through these bonds by companies to political parties was either to avoid criminal prosecution or to gain monetary advantages through contracts or other policy matters.
The petition stated-
“Political parties used electoral bonds as a tool to extract money by providing undue advantages to corporate houses, either by compromising criminal prosecutions or granting state largesse, at the expense of the public exchequer and against public interest.”
This ruling has sparked widespread discussions about the need for greater transparency in political funding. Critics have long argued that the electoral bonds scheme enabled a shadowy flow of money into the political system, undermining democratic processes and accountability.
The Supreme Court’s decision is a significant step towards ensuring that electoral funding is transparent and accountable. By striking down the anonymous nature of the electoral bonds scheme, the court has reaffirmed the right of citizens to access information about political donations. This move is expected to enhance the integrity of electoral processes and uphold democratic values.
The disclosure of electoral bond details by SBI has already led to increased scrutiny of the financial transactions of political parties. It is anticipated that this transparency will deter corrupt practices and promote fair competition among political entities.
