New Delhi: A major fraud involving loss of crores of rupees to the government exchequer by taking wrong advantage of tax exemption on donations received by political parties has been exposed. Acting after a complaint by the Income Tax Department, CID Crime of Gujarat Police has registered three separate FIRs against three unrecognized registered political parties and their office-bearers. The government is estimated to suffer a tax loss of around Rs 560 crore in this entire scam. It is alleged that these three political parties together showed bogus donations of about Rs 1,870 crore. For this, fake companies were created, fake bills were prepared, and the entire game was played with the connivance of chartered accountants. In this entire racket, 4 to 10 percent commission was deducted and the remaining money was returned to the donors in cash.
According to the Election Commission data, these three parties have been contesting elections in Gujarat since 2017, although the deposits of their candidates have been confiscated every time. The biggest scam among these was done by Bharatiya National Janata Dal i.e. BNJD. This party received fake donations of Rs 1,143.85 crore from 56,238 donors, causing a tax loss of Rs 343 crore to the government. After this, Swatantrata Abhivyakti Party i.e. SAP evaded tax of Rs 155 crore by showing donations of Rs 519 crore. At the same time, Garib Kalyan Party i.e. GKP, after receiving donations of Rs 206.76 crore, committed tax fraud of Rs 62 crore, and credit transactions worth more than Rs 1,295 crore have also been found in the accounts of companies linked to this party.
How did the whole cashback game work?
According to the report of Indian Express, the Income Tax Department has exposed the method of this entire racket layer by layer in the investigation that lasted for more than a year. In fact, under Section 80GGC of the Income Tax Act, donations given to registered political parties are completely tax free. Taking advantage of this exemption, donors used to send money to the bank accounts of these parties through check or RTGS. As soon as the money is received, the parties transfer it to 'Jai Ram Enterprises', 'Kisan Enterprises' and 'K.J. Used to transfer money to fake shell companies like 'Trading'. After this, fake bills for purchasing food items or other goods would be prepared, then the cash would be withdrawn from the bank and after deducting 4 to 10 percent commission, the remaining amount would be returned in cash to the genuine donors.
Election Commission was also misled
To hide this entire fraud, complete preparations were also made to mislead the Election Commission. For this, fake contribution reports i.e. Form 24A and fake audit reports were prepared. The surprising thing is that the chartered accountants involved took only Rs 50,000 in cash without properly examining the accounts and digitally signed the balance sheets and also uploaded them on the government portal.
Whose names are included in the FIR?
The Gandhinagar zone team of CID Crime has registered the case under serious sections of the Indian Justice Code related to cheating, criminal conspiracy and forgery. BNJD Party President Surendrakumar Vishnubhai Gajera has been described as the main mastermind of this entire syndicate. Apart from them, FIR has also been registered against General Secretary Vipul Solanki, Treasurer Raunaksingh Chavda and CA Adil Syed. In the SAP party, Mehul Kumar Maheshkumar Khatri, Surendrasingh Purushottamdas Tiwari and CA Mukundbhai Chandansingh Rathod have been made accused, while in the GKP party, names of president Neeraj Kumar Kshatriya, Secretary Dhananjay Singh Rajput, Treasurer Dheeraj Kumar Kshatriya and three CAs have been named.
Parties used to run only on paper
The most interesting thing is that these three parties were actually active only on paper and remained a means of earning commission. There was no real political activity visible at the grassroots level. Under the Representation of the People Act, when a candidate does not get 1/6th of the total valid votes i.e. 16.67 percent of the votes, his security deposit is confiscated. The vote share of these three parties was less than 0.01 percent at the state level. For example, in the 2024 Lok Sabha and 2022 and 2017 Gujarat Assembly elections, their candidates got only 300 to 1700 votes, and each time their deposits were forfeited.
Properties will be confiscated, strong charge sheet will be presented in the court
A senior officer of Gujarat Police, who is investigating the case, said that since the Income Tax Department itself is the complainant in this case, the police have strong documentary evidence. According to the officer, forensic evidence is being collected and the premises of the accused will be raided soon. Legal process has also been initiated to stop the accused from using their bank accounts and selling their properties till the investigation is completed. All the properties acquired through crime will be confiscated, so that a strong charge sheet can be presented in the court and those committing such frauds can be taught a stern lesson. At present, there has been no official response or clarification from all three political parties on this entire matter.