The Income Tax Department has charged the Aam Aadmi Party (AAP) with taking "hawala entries" worth Rs 2 crore from a Delhi-based operative and revoked the tax exemption given to it as a political party for assessment year 2015-16.
The taxman, in the penalty notice accessed by PTI, alleged that the Arvind Kejriwal-led party, in power in Delhi, "incorrectly disclosed the hawala money as voluntary donations".
The department slapped these charges on AAP in its assessment order issued to the party last week and determined the total taxable income of AAP at Rs 68.44 crore with a corresponding income tax of Rs 30.67 crore for AY 2015-16.
The order came with the penalty notice (under section 271[1] [c]) for allegedly concealing its correct income.
The party has also been charged by the department with not correctly reporting political donations received by it as stipulated under the Representation of the People (RP) Act.
"The AAP party had taken hawala entries of Rs 2 crore during the financial year 2014-15 from a hawala entry operator of Delhi and the same was incorrectly disclosed as voluntary donations," the I-T notice said.
It added the the taxman's probe had found the said hawala operative provided such illegal entries to 372 other entities/persons.
Hawala is the criminal act of skirting legal banking channels to move funds and thereby evading tax.
Chief minister Kejriwal dubbed the I-T action the "height of political vendetta".
"In the history of India, all donations to a political party have been declared illegal. All these were accounted for and shown in books of accounts. This is the height of political vendetta," he tweeted.
The taxman also accused AAP of not recording "donations of Rs 13.16 crore in its books of accounts and in the audited income and expenditure account filed along with the return of income for FY 2014-15".
"The names and addresses of the donors contributing Rs 13.16 crore were not disclosed," the tax notice alleged.
It also charged AAP with "not recording the full details of names and addresses of 461 donors (each donation exceeding Rs 20,000) who had allegedly donated (a total of) Rs 6.26 crore, in its audited books of account and its contribution report filed to the Election Commission (EC)."
The notice said the I-T probe found that the party had not disclosed donations of Rs 36.95 crore on its website but "on being caught, it had withdrawn the donation details on the website, also reported in the media on December 26, 2016."
It added the party "did not report donations totalling Rs 29.13 crore (each donation exceeding Rs 20,000) in its contribution report filed to the EC ... on September 30, 2015."
"Since the party had not correctly disclosed income from donations/contributions in its books of accounts, had not maintained prescribed details of the donors and had submitted an incorrect report under section 29C of the RP Act, the tax exemption available to the political party under section 13A of the I-T Act, 1961, has been denied to it for AY 2015-16," the notice said.
An appraisal report prepared by the department said the party, during these proceedings with the taxman, "made all efforts to derail the investigations by not filing replies and clarifications within the prescribed time in response to 34 opportunities allowed to it during a time of 550 days."
It added that the party even filed an RTI application "asking for the performance report of the I-T investigator just to browbeat him".
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