Two FIRs registered by the Gujarat CID (Crime) following complaints by the Income Tax Department have put two lesser-known political parties under the scanner over an alleged bogus donation and tax-evasion network involving more than Rs 725 crore.
According to the complaints, the Swatantrata Abhivyakti Party allegedly routed bogus donations of around Rs 519 crore, while the Garib Kalyan Party allegedly showed donations exceeding Rs 206 crore through its bank accounts. The Income Tax Department has alleged that donors received most of the money back in cash after commissions were deducted, allowing them to claim tax benefits on the purported donations.
Swatantrata Abhivyakti Party case
In the first case, the Income Tax Department alleged that the Naroda-based Swatantrata Abhivyakti Party was being used to generate bogus donation entries. The complaint names party national president Surendra Tiwari, tax consultant Mehul Kumar Khatri and Chartered Accountant Mayursinh Rathod, among others.
The department's investigation, as cited in the FIR, found that donations were collected from taxpayers through cheques or RTGS, followed by the issuance of receipts that allegedly enabled donors to claim a 100% deduction under the applicable provisions of the Income Tax Act.
The money was then allegedly moved through entities such as Jay Trading Company, after which an 8% to 9% commission was deducted and the balance allegedly returned to donors in cash.
The FIR quotes Tiwari as admitting during the investigation that the party had been created primarily to generate commissions and bogus entries rather than to conduct genuine political activity.
The Income Tax Department further alleged that CA Mayursinh Rathod prepared and digitally signed false contribution reports without properly verifying the accounts and uploaded them to the Income Tax portal. A purportedly false donation report was also allegedly submitted to the Election Commission.
According to the complaint, the alleged transactions resulted in tax evasion of around Rs 155 crore across the cases involving the two parties. The department also suspects that some of the deposited funds could be connected to other transactions.
Garib Kalyan Party case
Separately, the Income Tax Department lodged another complaint against office-bearers and associates of the Garib Kalyan Party, alleging that more than Rs 206 crore in bogus donations were routed through the party, facilitating tax evasion of over Rs 62 crore.
The FIR names party president Neeraj Kumar Kshatriya, secretary Dhananjaysinh Rajput and treasurer Dhirajkumar Kshatriya, along with alleged intermediaries Abhishek Chandraprrakash Tiwari, owner of Krishna Enterprise, and Pradipsinh Parihar, owner of Jalaram Enterprise. Three Chartered Accountants — Kuldipdan Taparia, Ashokkumar Shah and Pankaj Agrawal — have also been named.
The Income Tax Department alleged that taxpayers transferred money to the party through banking channels and received donation receipts in return, which were allegedly used to claim tax deductions. The funds were then allegedly transferred to entities including Krishna Enterprise and Jalaram Enterprise, with a 5% to 7% commission allegedly deducted before the remaining amount was returned in cash.
The FIR further alleges that the party had no genuine intention of carrying out political activities or contesting elections and was instead being used to generate commission income.
Investigators have also alleged that Chartered Accountants prepared and uploaded audit reports and financial statements without properly verifying the underlying transactions. In one instance cited in the FIR, CA Kuldipdan Taparia allegedly accepted Rs 50,000 in cash and certified an audit report without examining the relevant records.
The complaint claims that donors obtained fraudulent tax deductions exceeding Rs 134 crore, causing an alleged Rs 62-crore loss to the government exchequer. It also alleges that transactions worth more than Rs 1,295 crore passed through bogus entities linked to the network.