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Chitralekha
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The Election Commission of India has asked the Institute of Chartered Accountants of India (ICAI) to formulate guidelines for harmonizing the audit process of political parties. Accordingly, a guideline was formulated by ICAI in 2012. According to him, political parties have to disclose their assets and responsibilities before the Election Commission.

ADR has recently analyzed the reports for the year 2018-19. Which are as follows.

  • According to the report for the year 2018-19, the total assets of 7 national parties are 5349.25 crores. While 41 regional parties total assets 2023.71 crore.
  • Out of 7 national parties, BJP has the highest assets of Rs 2904.18 crore. INC is in second place with Rs 928.84 crore. BSP has assets worth Rs 738 crore, and is in third place.
    • Speaking of regional parties, the Samajwadi Party (SP) has the highest net worth of Rs 572.21 crore, followed by BJD with a net worth of Rs 232.27 crore, followed by AIADMK with a net worth of Rs 206.75 crore and a third.
      • The total liabilities of national and regional parties are Rs.213.231 crore. The INC party has two types of liabilities. It has the highest liability of Rs 78.415 crore, while the BJP has liabilities of Rs 37.463 crore, and it ranks second.
      • The total liabilities of the regional parties are Rs.79.751 crore, and the liabilities of the TDP are Rs. 18.10 crore, which is the highest.
      • The total capital reserve fund of the national parties is Rs.5215.77 crore, with the BJP party having the highest at Rs.2866.717 crore. While the reserve fund of the regional parties is Rs 1943.76 crore, the Samajwadi Party (SP) has the highest at Rs 571.70 crore.

Recommendations of ADR:

According to the provisions of the Companies Act, every business organization is required to change its auditor every five years. But this provision does not apply to political parties. So political parties can keep their auditors for years.

Many foreign auditing firms tie-up with Indian companies. Political parties do not change their auditors This raises the fear that foreign companies may monitor the accounts of political parties.

At present political parties decide their auditors in their own way, but in return they are required to decide the rules in such a way that they have to take auditors from the panel of chartered accountants.

The details of yield and expenditure of political parties are never verified. So we have to rely on the accounts presented by them, and it is nowhere to be found. There is a demand that the accounts submitted by the political parties should be scrutinized.

The Law Commission's 170th report calls for amendments to the Representation of the People Act to penalize political parties for failing to keep their accounts.

As per the provision made in Section 27CC of the Income Tax Act, if a person delays or fails in filing an IT return, there is a penalty. Such a provision should also apply to political parties. The Supreme Court has made it clear in the Common Cause V / S Union of India case that delay or omission in filing of IT returns by political parties is a violation of IT law and can be prosecuted under that law.