Strict compliance for political party exemption under section 13A means late return filing defeats relief and blocks expenditure netting.

A political party claiming exemption under section 13A must strictly satisfy the statutory conditions, including filing its return on or before the due date prescribed by section 139(4B) read with section 139(1); a belated filing does not qualify, so the exemption is denied. Once the return was held time-barred, the separate objections regarding cash receipts of donations and voluntary contributions became academic and were not separately decided. On denial of section 13A relief, the assessee could not seek taxation only on a net basis by setting off expenditure, because non-compliance with the exemption conditions disentitles expenditure-based netting of receipts.

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Issues: (i) Whether the return filed on 02.02.2019 was within the due date for claiming exemption under section 13A of the Income-tax Act, 1961. (ii) Whether the exemption under section 13A was barred by the conditions in the first proviso, including cash receipt of donations and voluntary contributions. (iii) Whether, if section 13A was denied, the assessee's receipts could nevertheless be taxed only on a net basis after allowing expenditure.

Issue (i): Whether the return filed on 02.02.2019 was within the due date for claiming exemption under section 13A of the Income-tax Act, 1961.

Analysis: The third proviso to section 13A requires a political party to furnish its return in accordance with section 139(4B) on or before the due date under that section. Section 139(4B), read with section 139(1), fixes a statutory due date and does not permit reliance on the belated-return window in section 139(4) for this special exemption. Exemption provisions in a taxing statute must be strictly complied with. Since the return was filed after the prescribed due date, the statutory condition was not met.

Conclusion: The return was time-barred for the purpose of section 13A, and the exemption was rightly denied.

Issue (ii): Whether the exemption under section 13A was barred by the conditions in the first proviso, including cash receipt of donations and voluntary contributions.

Analysis: The controversy on the cash receipts and the distinction between donations and voluntary contributions did not survive independently once the return was held to be filed beyond the statutory due date. The Tribunal therefore treated this issue as academic and did not enter upon a separate substantive determination on the alleged breach of clauses (b) and (d) of the first proviso.

Conclusion: No separate substantive finding was recorded on this issue, as it became academic.

Issue (iii): Whether, if section 13A was denied, the assessee's receipts could nevertheless be taxed only on a net basis after allowing expenditure.

Analysis: The governing principle applied was that where a political party fails to comply with the basic requirements of section 13A, no deduction can be allowed for expenditure incurred for its purposes. The Tribunal relied on the earlier binding view that non-compliance with section 13A disentitles the assessee to claim set-off of expenditure against such receipts.

Conclusion: The netting claim was rejected and expenditure was not allowable against the taxable receipts.

Final Conclusion: The appeal failed in full because the statutory conditions for exemption were not satisfied, and the assessee could not reduce the assessed receipts by expenditure once the exemption was denied.

Ratio Decidendi: A political party seeking exemption under section 13A must strictly satisfy every statutory condition, including timely filing of the return on or before the prescribed due date; failure to do so results in denial of the exemption and disallows expenditure-based netting of the receipts.

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