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Report No. 255

On Penalties

Relating to individual candidates

9. The disqualification of a candidate for a failure to lodge an account of election expenses and contribution reports should be increased and should extending from the current three period up to a five year period, so that a defaulting candidate may be ineligible to contest at least the next elections.

  • Thus, in the title and sub-clause (a), after the words "account of election expenses", add the words "and contribution reports".
  • After the words "period of three years" and before the words "from the date of" in section 10A, add the words "up to a period of five years".

Relating to political parties

10. Express penalties, apart from losing tax benefits under section 13A of the IT Act, should be imposed on political parties for the non-compliance with the provisions of section 29D of the RPA. This should include a daily fine for each day of non-compliance, with the possibility of de-recognition in extreme cases, along the lines of proposed section 78A in the 170th Report. This new section 29G reads as follows:

"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 subsection (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."

11. A new section 29H should be inserting penalising parties that contravene the stipulations of section 29B, RPA and section 182 of the Companies Act in terms of accepting contributions from impermissible donors, by levying a penalty of five times the amount so accepted:

"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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