Q. Consider the following statements:
1.Donations received by registered political parties are tax-exempted.
2.The Representation of the People Act (RP Act) grants powers to the Election Commission of India (ECI) to deregister political parties for failing to contest elections.
3.Under the Election Symbols Order, 1968, the ECI has the power to suspend or withdraw the recognition of a recognised political party for failing to observe the Model Code of Conduct (MCC).
Which of the statements given above are correct?
Explanation –
Statements 1 and 3 are correct. Donations received by registered political parties are tax-exempt under Section 13A of the Income Tax Act, 1961, provided they file their Income Tax Returns annually along with their audited accounts, income/expenditure details, and balance sheet. Under Paragraph 16A of the Election Symbols (Reservation and Allotment) Order, 1968, the ECI has the power to suspend or withdraw the recognition of a recognised political party for failing to observe the MCC or follow lawful directions of the Commission.
Statement 2 is incorrect. The RP Act does not confer explicit powers on the ECI to deregister political parties for failing to contest elections. The Supreme Court in Indian National Congress versus Institute of Social Welfare & Ors (2002) held that the ECI does not have the power to deregister any political party under the RP Act, except under exceptional circumstances such as registration obtained by fraud, the party ceasing to have allegiance to the Constitution, or being declared unlawful by the Government.
Source: The Hindu
