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24.06.2021
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In a first, an electoral trust has declared that it has made political funding through the anonymous electoral bond. It has cited the bond rules to say that it was not liable to declare the identity of the beneficiary.

The MP Birla Group incorporated the Paribartan Electoral Trust in 2014 and in its 2019-20 contribution report said that ‘Birla Corporation Ltd’ contributed Rs 3.02 crore to the trust. It has said that Rs 3 crore was donated by the trust to a political party/parties via electoral bond.

“As the distribution was made through…electoral bonds…payee is not required to be disclosed”, the Paribartan Trust’s contribution report said. However, the Association of Democratic Reforms has termed this violated the spirit of the Electoral Trusts Scheme, 2013 and Rule 17CA of the Income Tax Act, 1962, which requires all donor and donnee details to be declared mandatorily. A 2013 amendment to the Income Tax Act introduced Rule 17CA on electoral trusts which stipulated that they can only donate to political parties registered under Section 29A of the Representation of People Act, 1951, and must obtain valid receipts from such parties complete with PAN, registration number, amount of fund received from the trust, date of the receipt and name and designation of person signing such receipt. The electoral trust is also required to maintain a list of persons from whom contributions have been received with details of t names, address and PAN besides mode of payment including the name and branch of the bank.

ADR alleged that the Paribartan Electoral Trust example completely negated the very purpose behind the inception of the Electoral Trusts Scheme. If electoral trusts start adopting this precedent of donating through bonds, which do not permit disclosure norms and discourage transparency rules/laws, it would lead to a complete mayhem of unfair practices i.e. total anonymity, unchecked and unlimited funding, free flow of black money circulation, corruption, foreign funding, corporate donations and related conflict of interest, it alleged. ADR has also challenged the electoral bond scheme as it lacks transparency. The SC is yet to hear the case.

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