TaxTMI 
TaxTMI 
2013 (6) TMI 289
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....e Minister. 2. Were all the promises made in these election manifestoes fulfilled after BJP having formed government at the Centre. 3. If not, list of promises highlighted in BJP election manifestoes but remained unfulfilled after BJP came to power. 4. Outline of receipts (separately by cash/online/cheque etc) by BJP in last two years separately for each year for which updated account information may be there. 5. Outline of payments (separately by cash/online/cheque etc.) made by BJP in last three years separately for each year for which updated account information may be there. 6. Is it compulsory for every BJP legislature either at Centre or in States or in civic bodies etc to contribute towards party funds? 7. If yes, please provide complete and detailed information including also defaulters in making such contributions to party fund in last three years. 8. Is BJP aware of any of its legislatures (both at Centre and in States)/civic body member etc. involved in corrupt and other malpractices in last three years? 9. If yes, please provide complete details including action taken by party and others against such persons. 10. Has B.J.P. suggested any propo....
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....may provide this information in the following format: S.No . Source/Name of Contributor Address of Contributor 1 2 3 4 6. By his letter dated 15th November, 2010, Shri Moti Lal Vora, Treasurer, AICC, had informed the complainant that AICC did not come under the purview of the RTI Act. 7. Shri Chandan Bose, PRO, Nationalist Congress Party, in his letter dated 27th November, 2010, had informed the complainant as under: "It is very important to mention here that NCP is a non-government organization. Hence, we do not have much more resources nor surplus staff to expedite unusual work, which is not in our routine job. We generate funds from the membership drive and through other resources also, i.e. voluntary contributions from the well-wishers, and followers etc. State units of NCP have major role in membership drive from which we are getting funds in lakhs. State units of NCP at district level, block level and panchayat level organize membership camps frequently and every two years, we file the details regarding ou....
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....sp; * Shri M.L. Sharma, Information Commissioner 13. The Full Bench held the first hearing on 26th September, 2012. The following were present: Complainants: 1. Shri S.C. Agrawal, along with Shri Prashant Bhushan and Pranav Sachdeva. 2. Shri Anil Bairwal, along with Shri Jagdeep S. Chhokar, Shri Trilochan Sastry, Ms. Shivani Kapoor, Shri Manoj Kumar & A.K. Aneja. Respondents: 1. Shri Chandan Bose, PRO, NCP. 2. Shri D. Raja, CPI Election Commission: 1. Shri K.F. Wilfred, Principal Secretary, Election Commission. 14. The Full Bench held its second hearing on 1st November, 2012. The following were present: Complainants: 1. Shri S.C. Agrawal. 2. Shri Anil Bairwal, along with Shri Jagdeep S. Chhokar, Ms. Shivani Kapoor, Shri Manoj Kumar & Shri A.K. Aneja. Respondents: 1. Advocate Shubhashis R. Soren for BJP. 2. Shri S. Ramachandran Pillai of CPI(M). 3. Advocates Shail Kumar....
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....The Political Parties are substantially financed by the 'appropriate Government' in multiple ways and are exempt from Income Tax. 16. To canvass his case, Shri Agrawal has furnished a copy of letter dated 2.9.2011 of the CPIO of the Land and Development Office(L&DO), Ministry of Urban Development, addressed to him providing information regarding allotment of land by Land and Development Office to various Political Parties. The details of the land allotment to various Political Parties as furnished by the L&DO are extracted below :- "LIST OF POLITICAL PARTIES WHICH HAVE BEEN ALLOTTED LAND BY LAND & DEVELOPMENT OFFICE FOR THEIR OFFICE BUILDINGS S.No. Name of Party Location, Area & Date of allotment 1. All India Congress Committee of Indian National Congress Plot at Dr. Rajinder Prasad Road, New Delhi (also known as Jawahar Bhawan), Area = 9518.42 sq.yds. allotted on 8.9.75. Pocket-9A, Kotla Road, Area = 8092 sq. m. Allotted on 19.11.2007 2. Rashtriya Janata Dal Plot Nos. 34, 57, 58 & 59 at Kotla Road, New Delhi Area = 1904 sq. m. allotted on 3.7.2007. 3. Communi....
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.... 4, G.R.G. Road 1320 10. Samajwadi Party 18, Copernicus Road 12138 11. Shri Prakash Karat, General Secretary, CPI(M) 8, Teen Murti Lane 1550 18. Shri Anil Bairwal has also filed a detailed representation before this Commission to contend that Political Parties fall in the ambit of section 2(h) of the RTI Act. In his representation, Shri Bairwal has made the following salient points :- (i) All the Political Parties have been claiming tax exemption under section 13A of the Income Tax Act. As per his representation, various Political Parties claimed Income Tax exemption as given in the following Table: Party Tax Payable exempted in FY 2006-07(Rs. crores) Tax payable exempted in FY 2007-08 (Rs. crores) Tax payable exempted in FY 2008-09 (Rs. crores) Tax payable exempted in 3 years (Rs. crores) BJP 26.86 40.68 73.71 141.25 INC 57.00 75.05 168.87 300.92 BSP 15.44 23.60 0.80 39.84 CPI(M) 6.98 4.62 6.53 18.13 CPI 0.01 0.21 0.02 0.24 NCP 0.90 0.68 8.06 9.64 (Source : Compilation from copies ....
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....RJD 55 15,000 0.49 85 10,000 0.51 1.00 Total 595 5.35 900 5.40 10.75 (Source : Compilation from Spot Buy Rates and Time Allocated to various Political Parties received from Doordarshan and Election Commission of India under the RTI Act). (iv) The valuation of the properties allotted by the Government, as estimated by the complainant Shri Bairwal, as given in his representation, is as follows :- Party Office and address (with allotment dates) Area Area in Sq.Fts. (1 sq.m.=10.76 Sq. fts, 1 sq. yd.= 9 sq.fts., 1 Acre= 4840 sq.yds.) Current Market Value of the Allotteed Plots of Land (based on Real Estate Consulting Reports @ Rs. 60,000 per sq. ft(Rs.in Crores) Current Market Value of these allotted plots (Party-wise) (R In crores) Current Market Value of these allotted plots (Party-wise) (R In crores) (A) (B) (C=B*60,000) INC 1. Plot at Dr. Rajinder Prasad Road, New Delhi (Allotted on 08.09.1975) 9518.42 sq yds. 85665.78 513.99 1036.41 2. ....
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....o the public. Transparency in the working and financial operations of the Political Parties is essential in the larger public interest. 19. Senior Advocate, Shri Prashant Bhushan addressed the Commission on 26th September, 2012 on behalf of complainant Shri S.C. Agrawal. He vehemently contended that the entire political system in India revolved around the Political Parties. They perform a public function and, therefore, warrant to be declared 'public authority' under section 2(h) of the RTI Act. In amplification of his above broad submission, he has advanced the following arguments:- (i) Tenth Schedule to the Constitution vests tremendous powers with the Political Parties in as much as they can oust an elected member - whether MP or MLA - from out of the Party if he steps out of the party line. The vast power of the Political Parties has been recognised in this Schedule and, therefore, if purposive interpretation of the Tenth Schedule is made, then the Political Parties can be deemed to be covered under Section 2(h) of the RTI Act. (ii) As per Section 29C of the Representation of People Act, 1951, all donations of and above....
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....tical Parties by the State. 21. Complainant Shri Anil Bairwal has also filed detailed extra submissions before the Commission arguing that the Political Parties need to be declared Public Authority under section 2(h) of the RTI Act. His first and foremost submission is that Political Parties have a 'binding nexus with the populace'. He goes on to say that "As the Central Institution of democracy, they embody the will of the people and carry all their expectations that democracy will be truly responsive to their needs and help solve the most pressing problems that confront them in the daily lives". 22. His second submission is that there is need for accountability and transparency in the functioning of the Political Parties. It is his contention that transparency in the functioning of Political Parties was recommended by the Law Commission of India in their 170th Report on "Reform of Electoral Laws (1999)". The relevant para of the Law Commission's report as extracted by him is given below :- "On the parity of the above reasoning, it must be said that if democracy and accountability constitute the core of our constitutional system, the same concepts....
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....cal Parties get to accounting for the sources and the extent of their funding and their expenditure. There is unmistakable public interest in knowing these funding details which would enable the citizen to make an informed choice about the Political Parties to vote for. The RTI Act emphasizes that "democracy requires an informed citizenry", and that transparency of information is vital to flawless functioning of constitutional democracy. It is nobody's case that while all organs of the State must exhibit maximum transparency, no such obligation attaches to Political Parties. Given that Political Parties influence the exercise of political power, transparency in their organization, functions and, more particularly, their means of funding is a democratic imperative, and, therefore, is in public interest". 25. Another strand of his submissions is that the Public Authority, as defined under section 2(h) of the RTI Act, is a broader term than the 'State' as defined under Article 12 of the Constitution. In other words, it is possible that an entity may fall short of being 'State' and yet may be a 'Public Authority' under the RTI Act. In fact, 'Public Authority' and the 'State' are dif....
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..... It empowers citizens and information applicants to demand and be supplied with information about public records. Parliamentary endeavor is to extend it also to public authorities which impact citizens daily lives. The Act mandates disclosure of all manner of information and abolishes the concept of locus standi of the information applicant; no justification for applying (for information) is necessary; decisions and decision making processes, which affect lives of individuals and groups of citizens are now open to examination. Parliamentary intention apparently was to empower people with the means to scrutinize government and public processes, and ensure transparency. At the same time, the need of society at large, and Governments as well as individuals in particular, to ensure that sensitive information is kept out of bounds have also been accommodated under the Act." 27. Yet another submission of the complainant is that the Political Parties are being indirectly financed by the State in various ways viz. allotment of land, free of cost, or at nominal rates and exemptions from the Income Tax etc. Paras 3.1 to 3.7 of his representation are extracted below :- &nbs....
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....lso decisions by the Central Information Commission that have held that allotment of real estate, rental on subsidized rated, exemption from tax of various types including income tax amount to "indirect financing" in terms of section 2(h)(d)(ii) of the RTI Act. A few of the more useful citations are given below. 3.6.1 Land : The case that is relevant here is Civil Writ Petition No. 16750 of 2010, The Sutlej Club v. State Information Commission and another decided on 09.05.2011, commonly referred to as CWP No. 19224 of 2006 alongwith 23 connected cases. The Punjab and Haryana High Court held as follows : "72. Now adverting to the financial help of petitioner-Sutlej Club, Ludhiana(at Sr. No.15) is concerned, the SIC mentioned that as per revenue record, the land owned by the Provincial Government is given to the Club which amounts to substantial financial assistance by the State Government. The fact that the valuable land upon which the Club was constructed, belongs to the Government and no rent/lease is paid by it to the Government shows that there is a substantial financial assistance by the State to the Club. The cost of prim....
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....eties Registration Act. It enjoys a monopoly status as regard regulation of the sport of cricket in terms of its Memorandum of Association and Articles of Association. It controls the sport of cricket and lays down the law therefore. It, inter alia, enjoys benefits by way of tax exemption and right to use stadia at nominal annual rent. 3.7 While it may well be argued that the above quoted decisions refer to institutions such as schools, clubs which, in some characteristics, are different from Political Parties but these decisions do recognize, accept and establish the principle that exemption from tax and allotment or permission to use land and other real estate is an accepted form of "financing", though it may be considered "indirect" as it is not in the physical form of money. And this principle is one of the factors that makes Political Parties come under the definition of "public authority" as given in section 2(h) of the RTI Act." 28. More importantly, the complainant has contended that Political Parties have constitutional and statutory status. It is his contention that incorporation of Articles 102(2) and 191(2) through the 42nd Amendment and t....
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.... below :- "(a) Yes, we are Public Authority under section 2(h)(d)(ii) "non-government organizations" substantially financed, directly or indirectly, by funds provided by the appropriate Government. (b) We have our internal Appellate Authority "Central Control Commission". 32. It would, thus, appear that CPI has a contradictory stand in the matter, even while vouching for transparency in their accounts. 33. Shri Ambeth Rajan has filed a counter affidavit dated 31.10.2012 on behalf of Bahujan Samaj Party (BSP) in which he has taken the plea that the Political Parties are not public authorities under section 2(h) of the RTI Act. Taking his argument further, he would submit that BSP is a political party that has not been notified as public authority by means of any Notification of the appropriate government to the effect that BSP is under control of or substantially financed by the appropriate government. He has also contended that State funding on the electoral rolls during elections is done merely to meet statutory obligations under the Registration of Electoral Rules, 1960. Similarly, tax exemption under section 13A of th....
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....and another in CD is supplied to recognized Political Parties, free of cost. Further Tax exemption u/s 13A of the Income Tax Act is again subject to the compliance of the provisions of the Income Tax Act. The allotment of Government/public offices of Political Parties on concessional rent does not clothe the political party into a public authority within the meaning of Section 2(h) of Right to Information Act, 2005." 34. Shri Amit Anand Tiwari, counsel for Nationalist Congress Party(NCP), has argued at length to canvass that NCP is not a public authority. He has also filed a detailed representation in this regard. It is his contention that the NCP does not fall within the ambit of section 2(h) of the RTI Act. He has refuted the arguments advanced by the complainants that the Political Parties are substantially financed by the Government. His contention is that free airtime granted to NCP during the election time on national television and national radio is not suggestive of government financing in as much as during elections, it is a popular practice in most of the democracies. He has referred to the case of Canada in this context. Further, according to him, supply of free elect....
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....ons & Ors. (AIR 2008 P&H 117), the Punjab & Haryana High Court held that where the appellant society was receiving 45% of grant-in-aid from Government, it was being substantially financed by the Government, thus a 'public authority' under section 2(h) of the RTI Act. 13.2 From the above stated judicial precedents and definitions, it becomes clear that every financing would not bring a person within the purview of section 2(h). Such financing must be apparently considerable and done through subscribing of shares or advancing of loans etc. In cases where financing has been less than 20% of the total finance of the authority or body or organization, same was held not to be substantial financing within the meaning of Section 2(h)." 36. Adv. Tiwari has filed additional submissions dated 1.11.2012 for NCP in which he has made the following salient points :- (i) The power exercised by the Political Parties under the 10th Schedule of the Constitution cannot be construed to mean that the Political Parties are public authorities under section 2(h) in as much as these powers can be exercised only when an elected Member has voted or ab....
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....is letter dated 28.5.2011, addressed to the complainant S.C. Agrawal has taken the stand that the BJP is not a public authority under the RTI Act. 38. Similarly, Shri Moti Lal Vora, Treasurer, AICC, in letter dated 20.5.2011 addressed to complainant S.C. Agrawal has taken the stand that the INC/AICC does not come under the purview of public office and, hence, is not liable to provide information under the RTI Act. 39. After hearing the arguments, the Commission decided to address a letter dated 8.11.2012 to the following Political Parties:- * Nationalist Congress Party * Bahujan Samaj Party * Bhartiya Janata Party * Communist Party of India * Communist Party of India(Marxist) * INC/ All India Congress Committee seeking from them the following information :- "(A) Details of lands/buildings allotted by Govt. and its instrumentalities to your Party: (a) in Delhi (b) in State Capital(s) (c) at Distt; H....
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....empt the income of the Political Parties from Income Tax liabilities with the aim to strengthen the democratic polity in the country as Political Parties and their activities are its important components." He also added that it is not a fact that all persons making contributions enjoy full tax exemption on the amounts contributed to Political Parties. 43. It needs to be underlined that it has been the tenor of the arguments advanced by the complainants herein that the Political Parties are substantially financed, albeit indirectly, by the appropriate Government (Central Government in this case) by way of : * Allotment of large tracts of land in prime areas of Delhi either free of cost or at concessional rates; * Allotment of houses on rental basis on concessional rates. * Exemption from Income Tax u/s 13-A of the I.T. Act * Free air time on All India Radio; * Free air time on Door Darshan, and * Provisioning of free electoral rolls etc. 44. The Commission had written to the Secretary, Ministry of Urban Development, Government of India, New Delhi, to confirm the position regarding the allotment of plots to various Political Parties, as claimed by the compl....
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....ospectively by the Government. w.e.f. 1.4.2000. The allottee shall submit an undertaking to this effect on a non-judicial stamp paper worth Rs. 10/-." 46. The land has been allotted to other Political Parties also more or less on the same terms and conditions. However the earlier allotments made to various Political parties were at lower rates. 47. The Commission has received another letter dated 15.5.2013 from the Director of Estates enclosing therewith allotment of government accommodation to various Political Parties on monthly rental as extracted below:- Sl. No. Name of parties Address of Govt. Accommodation Allotment Letter License deed Current monthly rent charged from parties 1. Indian National Congress Committee 26, Akbar Road Enclosed ------- Rs.8,632/- + Furniture charges 2. Indian National Congress 24, Akbar Road Enclosed Enclosed Rs.68,571/- Furniture charges 3. Indian National Congress 5, Raisina Road Enclosed ------ Rs.47,665/- Furniture charges 4. Indian National Congress C-II/109, Chanakya-puri Enclosed -------- Rs.15,137/- + Furniture charges 5. Bhartiya Janata Par....
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...., which is an order issued by ECI under Article 324 of the Constitution read with Rules 5 & 10 of the Conduct of Election Rules, 1961, to provide for specification, reservation & allotment of symbols and recognition of Political Parties and matters related thereto. DECISION NOTICE AND REASONS 49. The Political Parties constitute one of the most important institutions in a constitutional democracy. Prof. Harold J Laski in his classic text "Grammar of Politics" has termed them 'natural', though not 'perfect'. According to him, the life of a democratic State is built upon the party system. Without Political Parties, there would be no means available of enlisting the popular decisions in a politically satisfactory manner. To quote him "The life of the democratic State is built upon the party-system and it is important at the outset to discuss the part played by party in the arrangement of affairs. Briefly, that part may be best described by saying that parties arrange the issues upon which people are to vote. It is obvious that in the confused welter of the modern State, there must be some selection of problems as more urgent than others. It is necessa....
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.... been given in our country such enormous powers and benefits, through both constitutional and statutory arrangements so that they can fulfill their just roles in representing their constituents. 51. The Political Parties, for example, play a critical role in the disqualification of legislators on ground of defection. As per paragraph 02 of the Tenth Schedule, a Member of a House belonging to any Political Party can be disqualified in certain circumstances. Paragraphs 01, 02 & 03 of Article 02 are extracted below:- "2. Disqualification on ground of defection. - (1) Subject to the provisions of paragraphs 3, 4 and 5, a member of a House belonging to any political party shall be disqualified for being a member of the House - (a) if he has voluntarily given up his membership of such political party; or (b) if he votes or abstains from voting in such House contrary to any direction issued by the political party to which he belongs or by any person or authority authorized by it in this behalf, without obtaining, in either case, the prior permission of su....
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.... "(1) Any association or body of individual citizens of India calling itself a political party and intending to avail itself of the provisions of this Part shall make an application to the Election Commission for its registration as a political party for the purposes of this Act." 53. Further, in exercise of its powers under Article 324 of the Constitution read with section 29A of the RP Act, 1951, and rules 05 and 10 of the Conduct of Election Rules, 1961, the Election Commission has issued the Election Symbols (Reservation & Allotment) Order, 1968. This Order has been issued for the purity of the elections in the Lok Sabha and the Legislative Assemblies of States and in the interest of conduct of such elections in a fair and efficient manner and for "the specification, reservation, choice and allotment of symbols for the recognition of Political Parties". This order lays down conditions for recognition of the National Parties and the State Parties. The Election Commission allots symbols to National and State Political Parties under para 08 of the Order. This order also provides for allotment of symbols to unrecognized Political Parties. Para 16-A of the order empowers the Comm....
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....Development Office of the Ministry of Urban Development has allotted large tracts of land in Delhi to various Political Parties either free of cost or at concessional rates; (b) that the Directorate of Estates, Ministry of Urban Development, has allotted accommodation in Delhi to various Political Parties on rental basis at concessional rates; (c) that Political Parties have been claiming and granted total tax exemption under section 13A of the Income Tax Act for all their income; (d) that the State has been indirectly financing Political Parties by way of free air time on All India Radio and Doordarshan of India during the elections; & (e) that recognized Political Parties are issued copies of electoral rolls by the Election Commission, free of cost, at the time of elections. 55. Section 2(h) of the RTI Act defines 'public authority' as follows :- (h) "public authority" means any authority or body or institution of self-Government established or constituted,-- (a) by or under the Constitution; (b) by any other....
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....priate government. 58. Having said this, the next classification under which these political parties can be placed is what is provided in section 2(h)(ii). According to this provision, any nongovernmental organisation which is substantially financed, directly or indirectly, by funds provided by the appropriate government would become a public authority for the purpose of the Right to Information Act. Now, the question is whether these political parties are being substantially financed, directly or indirectly, by funds provided by the appropriate government. Both the parties in this case have placed considerable importance in favour of and against this position. While the complainants have submitted that the land and buildings provided to these political parties in the national capital at Delhi and probably elsewhere in the States and the complete income tax exemption provided to them would amount to substantial financing, the political parties themselves have strongly argued that whatever benefits they might have received from the Central Government would hardly amount to any substantial financing. While it is true that the expression "substantial" has not been defined in the Ri....
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.... **" 61. It may now be pertinent to allude to certain decisions of the High Courts and this Commission in this regard:- (i) In Indian Olympic Association and others v. Veeresh Malik & others (WP)(C) No. 876/2007 the Delhi High Court in its decision dated 7th January 2010, held that Indian Olympic Association is a public authority under section 2(h). The relevant paragraph is extracted below:- "Having regard to the pre-eminent position enjoyed by the IOA, as the sole representative of the IOC, as the regulator for affiliating national bodies in respect of all Olympic sports, armed with the power to impose sanctions against institutions - even individuals, the circumstance that it is funded for the limited purpose of air fare, and other such activities of sports persons, who travel for events, is not a material factor. The IOA is the national representative of the country in the IOC; it has the right to give its nod for inclusion of an affiliating body, who, in turn, select and coach sportsmen, emphasizes that it is an Olympic sports regulator in this country, in respect of all ....
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....In decision dated 22.4.2010 in Amardeep Walia v. Chandigarh Lawn Tennis Association (File No. CIC/LS/C/2009/900377), the Central Information Commission held Chandigarh Lawn Tennis Association to be public authority. Para 19 of the order is extracted below:- "19. The gravamen of the above judgments is that for a private entity to qualify to be a public authority, substantive financing does not mean 'majority' financing. What is important is that the funding by the appropriate Government is achieving a "felt need of a section of the public or to secure larger societal goals." The ratio of the above judgments, particularly of Delhi High Court, applies to the present case on all the fours. A huge property has been placed at the disposal of CLTA by the Chandigarh Administration at a notional rental of Rs.100/- per annum. Besides, grant of one lakh rupees was also given to CLTA in FY 2008-09. Concededly, CLTA fulfills the felt need of a section of the society by way of imparting training to the budding tennis players. It is, therefore, held that CLTA is a Public Authority." (v) In another decision dated 21.1.....
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....overed under the definition of 'public authority' as defined under section 2 (h) (ii) of the RTI Act, 2005." 4. In view of the categorical position taken by the Chandigarh Administration extracted above and the fact that there is vast differential between the monthly rental being paid by the Chandigarh Club and the commercial rent that the premises could fetch in the open market (as estimated by the Finance Deptt), we are of the opinion that the Chandigarh Club is being indirectly financed by the Chandigarh Administration. In this view of the matter, we hold that the Chandigarh Club is 'public authority' u/s 2 (h) (ii) of the RTI Act. Hence, the club management is hereby directed to put in place a mechanism for servicing the RTI Act." (vii) Further-more, in Amrit Mehta v. India International Centre (File No. CIC/WB/A/2009/000965/LS) decided on 1.2.2011, the Commission held that India International Centre is a public authority under section 2(h). The broad facts in this case were that 4.69 acres of prime land was given on perpetual lease to IIC against deposition of Rs. 1,68,840/- as per agreement signed on 22.4.1960 between th....
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....he facts and circumstances of the case, DPS, Rohini, is a Public Authority under section 2(h). The reasoning given by the Commission is encapsulated in the para extracted hereinafter. "Considering the above factual matrix of the case at hand, one can sum up that 6000 sq. mts of land has been given to the school at a concessional rate of Rs. 65 lacs per acre and 1-0,000 sq. mts of land at a highly subsidised nominal ground rent of Rs. 10/- per Annum by DDA. The School is under the governance, control and regulation of the Delhi Schools Education Act 1973, Rule 50 whereof mandates disclosure of information in the form of reports etc. to the Director of the Directorate of Education, the Administrator and concerned authority from the Central Government, as already discussed above. The Directorate of Education has appointed two nominees in the key Managing Committee of the School thereby ensuring position of power of managing affairs of the School and having control over the Respondent School." 62. The question before the Commission is whether INC/AICC, BJP, CPI(M), CPI, NCP and BSP can be held to be Public Authorities under section....
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....nant, Shri Bairwal in this regard is mentioned at para 17 of this order which need not be repeated. The Directorate of the Estates, Ministry of Urban Development has also corroborated allotment of various properties to these political parties on rental basis. The rent being charged from the Political Parties is shown in the last column of the said table. The rental value of these properties in the open market has not been placed before us. Even so, we strongly believe that the rent being charged from the Political Parties does not reflect the true rental value of these properties. This arrangement also contributes to the indirect financing of Political Parties. 68. Of the various benefits that the central government extends to these political parties, the total exemption from payment of income tax on their incomes, very obviously, constitutes the most important benefit. Section 13 A of the Income Tax Act reads as follows: "Any income of a political party which is chargeable under the head income from house property or income from other sources or capital gains or any income by way of voluntary contributions received by a political party from any perso....
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.... Government. No one can dispute that this is substantial financing, though indirectly. Added to this the concessional allotment of land and buildings in prime locations in the national capital and, probably, in several state headquarters, if not at district level also, the total amount of direct and indirect financing/funding of these political parties is considerable. On behalf of the political parties, it has been argued that the income tax exemption cannot be said to be a form of financing. In support of this argument, they have submitted that such concessions and exemptions are routinely extended to many charitable and non-profit non-governmental organisations across the country. Therefore, according to them, if those numerous nongovernmental organisations are not considered to be public authorities, there is no reason why the political parties should be considered so. We cannot accept this argument. There is a great difference between the tax exemption given to charitable and non-profit nongovernmental organisations and that given to the political parties. The exemption given to the former is strictly conditional: full or part exemption is given to these organisations only if ....
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....ct it to the four categories mentioned in the first part, but to comprehend other bodies or institutions, the next question is whether that intention is coloured by the use of the specific terms, to be read along with the controlling clause 'authority ... of self government" and "established or constituted by or under" a notification. A facial interpretation would indicate that even the bodies brought in by the extended definition : (i) "Body owned, controlled or substantially financed; (ii) Non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government." are to be constituted under, or established by a notification, issued by the appropriate government. If, indeed, such were the intention, sub-clause (i) is a surplusage, since the body would have to be one of self government, substantially financed, and constituted by a notification, issued by the appropriate government. Secondly - perhaps more importantly, it would be highly anomalous to expect a 'non-government organization" to be constituted or established by or under a notification issued by the government. These two internal indications actually have the effect of ex....
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....it. Naturally, its existence being as a non-state actor, the question of its establishment or constitution through a government or official notification would not arise. The only issue in its case would be whether it fulfills the "substantial financing" criteria, spelt out in Section 2(h). Non-government organizations could be of any kind; registered societies, co-operative societies, trusts, companies limited by guarantee or other juristic or legal entities, but not established or controlled in their management, or administration by state or public agencies." 74. As to the question of 'substantial financing', the Delhi High Court in the said judgment has held that 'majority' test is not appropriate to decide whether or not an Organisation is substantially financed, directly or indirectly, by the appropriate Government. It has been observed that financing in percentage terms in relation to the total budget of the body is not important. To quote:- "60. This court therefore, concludes that what amounts to "substantial" financing cannot be straight-jacketed into rigid formulae, of universal application. Of necessity, each case would have to be examined o....
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....e control. Hence clearly the wording 'substantially financed' would have to be given meaning at less than 50% holding. The company law gives significant rights to those who own 26% of the shares in a company. Perhaps this could be taken to define the criterion of 'substantial finance'. The finance could be as equity or subsidies in land or concession in taxation". 76. The gravamen of the above judgments is that for a private entity to qualify to be a public authority, substantial financing does not mean majority financing. What is important is that the funding by the appropriate Government is achieving a "felt need of a section of the public or to secure larger societal goals". The ratio of the above judgments, particularly of Delhi High Court, applies to the present case. Large tracts of land in prime areas of Delhi have been placed at the disposal of the Political Parties in-question at exceptionally low rates. Besides, huge Government accommodations have been placed at the disposal of Political Parties at hugely cheap rates thereby bestowing financial benefits on them. The Income Tax exemptions granted and the free air time at AIR and Doordarshan at the time of elections also....
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....thority exercised or capable of being exercised for the benefit of the public" 80. The purity of elections assumes critical significance in this context. In Union of India v. Association of Democratic Reforms & Anr (AIR 2002 SC 2112), the Supreme Court has laid emphasis on the purity of elections in the following words:- "To maintain the purity of elections and in particular to bring transparency in the process of election, the Commission can ask the candidates about the expenditure incurred by the Political Parties and this transparency in the process of election would include transparency of a candidate who seeks election or re-election. In a democracy, the electoral process has a strategic role. The little man of this country would have basis elementary right to know full particulars of a candidate who is to represent him in Parliament where laws to bind his liberty and property may be enacted." 81. The National Commission to Review the Working of the Constitution in its report submitted in March 2002 has recommended that Political Parties as well as individual candidates be made subject to a proper statutory audit of the amounts they spend. In ....
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....nd above received from any person or a Company by a Political Party are required to be intimated to ECI under section 29C of the R.P. Act. ECI is vested with the superintendence, direction and control of elections under Article 324 of the Constitution. ECI is also vested with the authority to suspend or withdraw recognition of a political party in certain contingencies. More importantly, Political Parties can recommend disqualification of Members of the House in certain contingencies under the Tenth Schedule. The contention is that the aforesaid constitutional/statutory powers of Political Parties bring them in the ambit of section 2(h). 86. We find the above submissions quite compelling and unerringly pointing towards their character as public authority. Stand of Political Parties 87. It may be recalled that the INC/AICC and the BJP have made a bland assertion that they are not Public Authorities under the RTI Act. CPI(M) has disclosed some information to the Commission regarding allotment of land to it by the Central Government on certain terms and conditions but has not conceded that it is Public Authority under section 2(h) of the RTI Act. The contentions of the above ....