Supreme Court seeks ECI's response to plea alleging incomplete funding disclosure by political parties

The Supreme Court on Monday sought the Election Commission of India’s (ECI) response to a public interest petition challenging the constitutional validity of Section 13A(d) of the Income Tax Act, which permits political parties to accept cash donations up to ₹2,000. [Dr. Khem Singh Bhati vs. Election Commission of India & Ors.]

As per the petition, the provision violates Articles 14 and 19(1)(a) of the Constitution since it allows anonymous donations, thereby infringing the voters’ right to know the source of political funding.

It pointed to India’s rapid digitalisation, citing government data that UPI transactions in June 2025 alone amounted to ₹24.03 lakh crore.

“With such a digital payments ecosystem, there is no justification for allowing cash donations,” the plea stated, arguing that the provision effectively facilitates opacity in political finance.

Pertinently, the petition filed by Dr. Khem Singh Bhati also alleged widespread non-disclosure of political donations and incomplete contribution reports filed by national and State parties.

A Bench of Justices Vikram Nath and Sandeep Mehta issued notice after hearing Senior Advocate Vijay Hansaria who argued that political funding lacked basic transparency despite the Court’s recognition of voters’ right to know in the electoral bonds judgment.

According to the petition, analysis of audit and contribution reports revealed widespread irregularities, from delayed filings to incomplete donor details and unexplained income.

Major parties such as the BJP, Congress, and CPI(M) were cited for filing their reports beyond the September 30 deadline, while several others failed to provide PAN or bank details of donors.

The petitioner said that political parties enjoy statutory benefits that make accurate disclosure essential. These include allotment of reserved symbols, tax exemptions, subsidised land and accommodation, exemptions on donations received and equitable broadcast time during elections. In return, parties must meet the highest standards of accountability.

The petitioner contended that there should be mandatory scrutiny of all Form 24A reports, directives requiring defaulting parties to deposit amounts received without proper donor details, issuance of notices under the Election Symbols Order for repeated non-compliance and compulsory independent audits of accounts.

It was also alleged that some parties, including the Bahujan Samaj Party, declared their entire income as membership fees received in cash for 18 consecutive years, while others repeated entries or reported large “fees and subscriptions” without identifying donors.

The petitioner said that such practices defeat the purpose of financial transparency in politics.

A separate but linked petition by another petitioner was also heard by the Court in which a parallel audit by the Central Board of Direct Taxes for the last five years was sought.

The matter will be heard next after the ECI files its response.