The Supreme Court of India has taken a significant step toward potentially reforming political funding in the country by agreeing to examine a public interest litigation challenging the income tax exemptions granted to political parties for receiving anonymous cash donations.
Court Issues Notices to Centre and Election Commission
A bench comprising Justices Vikram Nath and Sandeep Mehta has issued formal notices to the Central government, the Election Commission of India, and all recognized political parties, seeking their responses to the petition. The court initially showed reluctance to entertain the PIL, suggesting the petitioner approach the high court instead, but ultimately agreed to hear the matter after considering its nationwide implications.
The petition, filed through advocate Jayesh K Unnikrishnan, challenges the constitutional validity of Section 13A(d) of the Income Tax Act, which permits political parties to receive anonymous cash contributions below Rs 2,000 without disclosure requirements.
The Legal Challenge Against Anonymous Political Funding
According to the petition, the current provision violates Articles 14 and 19(1)(a) of the Indian Constitution. The legal challenge argues that political parties, being central to democratic governance, must operate with financial transparency to prevent unlawful influences on policymaking.
The petition emphasizes that Section 13A of the Income Tax Act currently exempts political parties' income from various sources, including voluntary contributions from individuals. However, the clause allowing anonymous cash donations up to Rs 2,000 creates a significant transparency gap in political funding.
Senior advocate Vijay Hansaria successfully argued before the court that the issue has pan-India ramifications affecting all recognized political parties and the fundamental integrity of the electoral process.
Implications for Democratic Transparency
The petition contends that the lack of transparency in political funding deprives voters of crucial information about funding sources and donor motivations. This information gap prevents citizens from making fully informed decisions when casting their votes, ultimately compromising the purity of elections and the accountability of democratic institutions.
The legal challenge describes the receipt of substantial amounts through undisclosed donations as a breach of the public trust doctrine. It argues that political parties must disclose complete details of all donors, regardless of contribution size, and should be prohibited from receiving any cash donations to ensure complete financial transparency.
This Supreme Court intervention comes at a crucial time when questions about political funding transparency have gained significant public attention. The outcome of this case could potentially reshape how political parties in India manage their finances and report their funding sources.
