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Report No. 255

Part IVA:

Registration of Political Parties

29A. Registration with the Election Commission of associations and bodies as political parties.- (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.

(2) Every such application shall be made,-

(a) if the association or body is in existence at the commencement of the Representation of the People (Amendment) Act, 1988 (1 of 1989), within sixty days next following such commencement;

(b) if the association or body is formed after such commencement, within thirty days next following the date of its formation.

(3) Every application under sub-section (1) shall be signed by the chief executive officer of the association or body (whether such chief executive officer is known as Secretary or by any other designation) and presented to the Secretary to the Commission or sent to such Secretary by registered post.

(4) Every such application shall contain the following particulars, namely:-

(a) the name of the association or body;

(b) the State in which its head office is situate;

(c) the address to which letters and other communications meant for it should be sent;

(d) the names of its president, secretary, treasurer and other officebearers;

(e) the numerical strength of its members, and if there are categories of its members, the numerical strength in each category;

(f) whether it has any local units; if so, at what levels;

(g) whether it is represented by any member or members in either House of Parliament or of any State Legislature; if so, the number of such member or members.

(5) The application under sub-section (1) shall be accompanied by a copy of the memorandum or rules and regulations of the association or body, by whatever name called, and such memorandum or rules and regulations shall contain a specific provision that the association or body shall bear true faith and allegiance to the Constitution of India as by law established, and to the principles of socialism, secularism and democracy, and would uphold the sovereignty, unity and integrity of India, shun violence for political gains, and avoid discrimination or distinction based on race, caste, creed, language or place of residence.

(6) The Commission may call for such other particulars as it may deem fit from the association or body.

(7) After considering all the particulars as aforesaid in its possession and any other necessary and relevant factors and after giving the representatives of the association or body reasonable opportunity of being heard, the Commission shall decide either to register the association or body as a political party for the purposes of this Part, or not so to register it; and the Commission shall communicate its decision to the association or body:

Provided that no association or body shall be registered as a political party under this sub-section unless the memorandum or rules and regulations of such association or body conform to the provisions of sub-section (5).

(8) The decision of the Commission shall be final.

(9) After an association or body has been registered as a political party as aforesaid, any change in its name, head office, office-bearers, address or in any other material matters shall be communicated to the Commission without delay.

29B. Political parties entitled to accept contribution.-

29C. Declaration of donation received by the political parties.- (1) The treasurer of a political party or any other person authorised by the political party in this behalf shall, in each financial year, prepare a report in respect of the following, namely.-

(a) the contribution in excess of twenty thousand rupees received by such political party from any person in that financial year;

(b) the contribution in excess of twenty thousand rupees received by such political party from companies other than Government companies in that financial year.(2) The report under sub-section (1) shall be in such form as may be prescribed.

(3) The report for a financial year under sub-section (1) shall be submitted by the treasurer of a political party or any other person authorised by the political party in this behalf before the due date for furnishing a return of its income of that financial year under section 139 of the Income-tax Act, 1961 (43 of 1961), to the Election Commission.

(4) Where the treasurer of any political party or any other person authorised by the political party in this behalf fails to submit a report under sub-section (3) then, notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), such political party shall not be entitled to any tax relief under that Act.

29C. Maintenance, audit, publication of accounts by political parties.- (1) Each recognised political party shall maintain accounts clearly and fully disclosing all the amounts received by it and clearly and fully disclosing the expenditure incurred by it. The account shall be maintained according to the financial year. Within six months of the close of each financial year, each recognised political party shall submit to the Election Commission, its accounts, duly audited by a qualified and practicing chartered accountant from a panel of such accountants maintained for the purpose by the Comptroller and Auditor General.

(2) The Election Commission shall make publicly available, on its website, the audited accounts submitted by all political parties under sub-section (1).

(3) The Election Commission shall also keep these accounts on file for three years after their submission and shall make them available for public inspection on the payment of a prescribed fee.

29D. Declaration of contribution received by the political parties.- (1) The treasurer of a political party or any other person authorised by the political party in this behalf shall, in each financial year, prepare a report in respect of the following, namely.-

(a) the contribution in excess of twenty thousand rupees, including an aggregate of contributions in excess of twenty thousand rupees, received by such political party from any person in that financial year;

(b) the contribution in excess of twenty thousand rupees, including an aggregate of contributions in excess of twenty thousand rupees received by such political party from any company, other than a Government company, in that financial year.

(2) Notwithstanding anything contained in sub-section (1), the treasurer of a political party or any other person authorised by the political party in this behalf shall, in the report referred to in sub-setion (1), disclose the particulars of such contributions received from a person or company, other than a Government company, even if the contributions are below twenty thousand rupees, in case such contributions exceeds twenty crore rupees, or twenty per cent of total contributions, whichever is lesser, as received by the political party in that financial year.

Illustration.- A political party, 'P', receives a total of hundred crore rupees, in cash or cheque, in a financial year. Out of this amount, fifty crore rupees are received from undisclosed sources, by way of contributions less than twenty thousand rupees (in cash or multiple cheques). P shall be liable to disclose the particulars of all donors beyond twenty crores, even if they have contributed less than twenty thousand rupees each.

(3) The report under sub-section (1) shall be in such form as may be prescribed.

(4) The report for a financial year under sub-section (1) shall be submitted by the treasurer of a political party or any other person authorised by the political party in this behalf before the due date for furnishing a return of its income of that financial year under section 139 of the Income-tax Act, 1961 (43 of 1961), to the Election Commission.

Explanation.- For the avoidance of doubt, it is hereby clarified that the term "particulars" mentioned in this section shall include the amount donated; the names and addresses, and PAN card number if applicable, of such person or company referred to in this section.

29E. Disclosure of contribution reports submitted by political parties.- (1) The Election Commission shall make publicly available, on its website, the contribution reports submitted by all political parties under section 29D.

(2) The Election Commission shall also keep these reports on file for three years after their submission and shall make them available for public inspection on the payment of a prescribed fee.

29F. Election expenses by political parties.- (1) Every political party contesting an election shall, within seventy five days of the date of an election to a Legislative Assembly of a State or ninety days of the date of an election to the House of the People, lodge with the Election Commission a statement of election expenditure, which shall be a true copy of such statement maintained by the party in consonance with the directions of the Election Commission.

(2) The payment of any election expenditure over twenty thousand rupees should be made by the political parties via cheque or draft, and not by cash, unless there are no banking facilities or the payment is made to a party functionary in lieu of salary or reimbursement.

29G. Penalty.- (1) Where the treasurer of any political party or any other person authorised by the political party in this behalf fails to submit a report in the prescribed form within the time specified under sub-section (4) of section 29D then, notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), such political party:

(a) shall not be entitled to any tax relief for such financial year under the Income-tax Act, 1961; and

(b) shall be liable to a penalty of twenty five thousand rupees for each day of non-compliance and so long as the non-compliance continues.

Provided that If such default continues beyond the period of ninety days, the Election Commission may de-register the political party after giving a reasonable opportunity to show cause.

(2) If the Election Commission finds on verification, undertaken whether suo motu or on information received, that the report submitted under sub-section

(4) of section 29D is false in any particular, the Election Commission shall levy a fine up to a maximum of fifty lakh rupees on such political party.

29H. Penalty for political parties accepting contributions from an impermissible donor.- If a political party accepts any contribution offered to it from an impermissible donor, it shall be liable to pay a penalty that is five times the amount so accepted from such donor.

Explanation.- For the purpose of this section, "impermissible donor" refers to:

(a) a government company, as defined in section 29B;

(b) a company that does not comply with the requirements of sub-section (1) section 182 of the Companies Act, 2013; or

(c) any foreign source defined under clause (e) of section 2 of the Foreign Contribution (Regulation) Act, 1976.



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