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SC Dismisses PIL Against IT Exemption To Political Parties On Voluntary Donations

“Government can choose how and on what grounds it can repudiate tax and it also has absolute authority to decide under what circumstance it is done”.

The Supreme Court today dismissed a PIL which sought quashing of a provision of the Income Tax (IT) Act which gave tax exemption to political parties on receiving voluntary contributions.

A bench headed by Chief Justice J S khehar said the executive had the power to choose and decide on exemptions.

When petitioner and lawyer M L Sharma said the exemption was contrary to statutory provisions, the bench shot back: “no it is not contrary the executive chooses it”.

“Government can choose how and on what grounds it can repudiate tax and it also has absolute authority to decide under what circumstance it is done” the bench told Sharma.

“It is the will of those who govern to decide on it..not this court…see income from agricultural produce is exempt..if that is legal why not this” CJI Khehar asked Sharma.

Sharma had contended that the government had on December 16 declared that no investigation will be carried out against political parties’ accounts on deposit of old demonetised notes as per the tax exemption given under section 13A of the IT Act.

In his plea, the petitioner has claimed that political parties registered with Election Commission of India are 100 per cent exempt from paying income tax under section 13A of the IT Act, 1961, so long as they file their tax returns every assessment year along with their audited accounts, income or expenditure details and balance sheet.

He has sought a direction to the CBI to register a case and investigate fundings and deposits in the accounts of political parties in demonetised currency notes.

Besides, the petitioner has also sought quashing of a provision of the Representation of the People Act 1951 which relates to “special provisions in the case of certain elections”.

This article has been made possible because of financial support from Independent and Public-Spirited Media Foundation.

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  • dr. guru Balakrishnan says:

    Approach of PIL is wrong – so the hon S C dismissed; if that is so why Art 265 is is violated, as there is “‘no’ Art ice clearly says the government can just levy taxes on any kind of premise”; when so ; how same Art 265 can be against Art 14, (equality before law’); how come govt is not subject to ‘Art 14 r/w Art 265 ; citizen is sovereign (dejure), govt is Art 12 establishment enjoys just ‘defacto ‘status ‘ only, per se ‘Constitution of India;

    Art 12 institutions are subservient to the Constitution of India by all means; the ‘ dejure ‘ set up has no standing unless Constitution of India gives life for any standing;

    Without the Constitution of india support, your’ parliament’ has no existence at all, one needs to know; even SC is an Art 12 institution like the office of President or PMO, or the cabinet of PM or CM ;

    so , it is clear all these institutions get status once sovereign voter -citizens vote them to ‘defacto’ power;

    here, SC as a separate defacto power not amenable to other defacto powers due to the presence of ‘separation of powers is in place, like in American constitution; therefore other Art 12 institution cannot wield its authority on other institution, except the Constitutional courts – High Courts or the Supreme court, for they are especially empowered by the Constitution of India to go for ‘Judicial reviews’ under Art 32 and Art. 226 that cannot be abrogated by the parliament or PMO or the President or any Art 12 set up;

    See here RBI is a separate body under Art.12 like any other Art 12 set up in Constitution of India; obviously RBI cannot function as a department (assumed to be subservient to the government in place) of any government in place in the Union of India (UOI) as central government; for the central government cannot displace as the present central govt did with planning commission (a kind of department of the central government); but RBI is not so; so mr P. chidambaram might move the SC for the present government usurped its powers when PM Mr Modi announced ‘demonitization’ on November 8th 2016 as he far exceeded his power as the PM in the current period;

    Monetization or Demonitization is the powers reserved only for the RBI to assess, for it is a standing institution ever while PMO changes with political policies which constantly flip flops; not the RBI can ‘flip flop’ like the political parties may do; so obviously the governments cannot wield powers over RBI is obviously sacrosanct power as far as ‘Currency and money management ‘of the Nation, for the ‘management of currencies’ is not the power vested with PMO; finance minister can only handle budgets on ‘fiscal policies relevant fota year only’ every year ends, nothing more than that the governments can do;

    Hence, it is clear division of powers is ascertained by the Constitution of India;

    Here, you may note, government granting financial ‘exemptions’ based upon the ‘political policies’ , though obviously falls under the domain of the government in power – here the tax Act has a section….that permits political funding of political parties are under exclusive domain of the party in power, so the hon SC rightly said:

    ‘Government can choose how and on what grounds it can repudiate tax and it also has absolute authority to decide under what circumstance it is done”….

    Read more at:

    The question arises is whether the political parties can unnecessarily tax the tax payer is the question that is before the citizens and citizens needed clarification ;

    1. the hon court said the power of the political party can only decide and the court cannot or shd not venture into such question;

    as the PIL only addressed the aspect the hon court espoused.