The AAP Tuesday dubbed the EC notice sent to it over alleged discrepancies in electoral funding as "poor interpretation" of basic accounting practices and alleged "bias" of central agencies against it.
The party also expressed fear of possible "harassment" by agencies over the issue.
"This notice is based on poor interpretation of basic accounting practices by the Central Board of Direct Taxes(CBDT)," party treasurer and Rajya Sabha MP ND Gupta said in a statement.
He said Aam Aadmi Party(AAP) had filed contribution report for the financial year 2014-15 with the Election Commission (EC) for Rs 37,60,62,631 from various donors.
Flagging discrepancies in its electoral funding statement, the Election Commission on Tuesday threatened the AAP with action for "prima facie failing" to follow its transparency guidelines.
In its show-cause notice, the EC claimed that transactions through hawala operators were "wrongly disclosed as voluntary donations".
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The party had earlier disclosed the details of multiple receipts from same donor in the contribution report. Later when asked about total number of times each donor had contributed, it was explained to the Income tax department as well, Gupta said.
The AAP treasurer cited some anomalies in the EC notice and said the EC seemed to have "copy-pasted and referred grossly incorrect and biased observations" of income tax department.
Even bank transfers between different state units of the party have also been treated as fresh donations, he claimed, and said the amount of donations in original contribution report were "wrongly" mentioned in the notice.
"Such observations show deep rooted bias of the statutory authority against a law abiding political party," he said.
The EC has asked the AAP to respond to the notice "within 20 days", failing which it will decide on the cases on merit based on the information available with it and the CBDT.
Gupta asserted AAP has explained each and every "misinterpretation" and so called "difference of Rs 13 crores" as alleged by CBDT in its appeal.
The appeal is pending.
The party will also explain each and every detail to EC, he added.