<<Citizen Selection Procedure

Click on the names to view details

Association for Democratic Reforms (ADR),
Citizens-nominee for RTI Awards 2009 2009
Reference Number: C591
Organization type: trust
Nominated by: self
Why is it short-listed for RTI Awards 2009?
For using RTI Act to demand disclosure of income tax (I-T) returns of political parties, resulting in a landmark decision of the Central Information Commission (CIC), which held that such a disclosure was in public interest and so must be allowed.
ADR filed an RTI request in February 2007 at Central Board of Direct Taxes (CBDT), seeking information as to whether 21 major political parties of the country were filing their I-T returns for the last five assessment years.
It also wanted to know the PANs of the 21 parties and requested copies of their I-T returns and corresponding I-T assessment orders for the last five years.
Predictably, the request was turned down by various I-T commissioners except those with jurisdictions over PDP, AGP and BJD.
ADR then appealed to the CIC.
After long hearings and filing of protracted submissions by all the parties, information commissioner A.N. Tiwari ruled in April 2008 that “information, which is otherwise exempt, can still be disclosed if the public interest so warrants.”
ADR finally received the copies of I-T returns filed by political parties.
The CIC decision was a breakthrough in the quest to impose transparency and accountability on unwilling political parties.
It was another achievement for ADR, which was responsible for the landmark Supreme Court judgement that forced people contesting elections to disclose their assets, liabilities, criminal record, and educational qualifications.

Details of the nomination

Association for Democratic Reforms (ADR) is a non-political, non-governmental organization, founded in August 1999 by a group of professors from Indian Institute of Management-Ahmedabad and National Institute of Design, and some IIM alumni.
ADR says its aim is to strengthen democracy and governance in India by focusing on fair and transparent electoral processes.
ADR is best known for a case that is generally known as Union of India Vs Association for Democratic Reforms.
In that landmark case, the Supreme Court upheld a Delhi High Court judgment and directed the Election Commission to issue orders making it mandatory for people contesting elections to submit affidavits giving information about their assets and liabilities, criminal cases, and educational attainments.
Subsequently, ADR also got the Supreme Court to strike down an amendment to Representation of Peoples Act that sought to dilute the effect of that landmark judgement. Thanks to ADR, the citizens of India now get ample information to read in newspapers about politicians’ Mercedes and Bentleys and the IPC sections that characterize their adventurous careers.
ADR has also been organizing election watch programmes in states going to polls in order to keep track of malpractices of the political parties and candidates.
Continuing with its aim to nudge political parties towards internal democracy and financial transparency, ADR filed an RTI application on February 28, 2007 at Central Board of Direct Taxes (CBDT), asking whether 21 prominent political parties had been submitting their income tax returns for assessment years from 2002-03 to 2006-07.
The parties included INC, BJP, CPI(M), BSP, NCP, SP, SAD, DMK, AIADMK, TDP, JD (U), NC, AGP, BJD, and others.
The applicant also asked for copies of income tax returns filed by the 21 political parties for the aforementioned years along with corresponding I-T assessment orders, if any.
ADR also sought to know permanent account numbers (PANs) allotted to the political parties.
In March 2007, the CBDT transferred the application to the Commissioners of Income Tax at New Delhi, Delhi, Chennai, Mumbai, Chandigarh, Hyderabad, Guwahati, J&K, and Bhubaneswar.
The RTI request was subsequently turned down, at first instance or in appeal, by all the concerned I-T commissioners, except those having jurisdiction over AGP, BJD and PDP whose IT returns were provided to the applicant.
Some of the reasons cited by various I-T commissioners in declining to provide the information are as follows.

  1. Information is exempt under section 8(1)(d) of the RTI Act since it contains details and particulars of commercial activities of the political parties. The I-T commissioner of Mumbai states that information has been submitted by the assesses in commercial confidence.
  2. The returns are submitted by the assesses in fiduciary capacity and they are confidential in nature; so disclosure is exempted under section 8(1)(e).
  3. Disclosure of information requested has no relationship with public activity and no public interest is involved; so information requested can not be disclosed under section 8(1)(j).
  4. PAN is a statutory number, functioning as a unique identification of each taxpayer. Making PAN number public can result in misuse of this information by other persons and could compromise the privacy of the financial transactions linked with PAN.
  5. Information relates to third parties who have objected to the disclosure of this information.
  6. Information is subject to confidentiality under section 138 of the Income Tax Act 1961.
  7. Sections 8(1)(g), 8(1)(h) and 8(1)(j) of the RTI Act make it clear that there is no obligation to give any information that had been tendered in confidence for law enforcement or information which would impede the process of investigation or prosecution of offenders or information the disclosure of which would cause unwarranted invasion of the privacy of individual.

In July 2007, ADR appealed to the Central Information Commission (CIC), making the following submissions.

  1. The avowed objective of a political party in a democracy is to represent people in legislatures through the process of elections and that their very existence is indicative of their goal of representing the interests of the people who elect them to power.
  2. Each and every act of political parties should be open to public scrutiny. Transparency in their working and financials is essential in larger public interest and all sections of government, including the I-T department are duty bound to hold the public interest above the interests of political parties.
  3. The disclosure of financial information relating to political parties including IT returns and assessment orders to general public would promote such transparency and reduce the role of black money and illegal activities in the functioning of political parties.
  4. The political parties about which information has been sought have all enjoyed fruits of political power.
  5. Information sought should be made available to the applicant and to general public in wider public interest.

At the first hearing of the matter on October 18, 2007, Information Commissioner A.N. Tiwari decided that 21 political parties, the Election Commission, and the Ministry of Law and Justice should also be given a chance to present their arguments.
So the political parties, the Election Commission, and the Ministry of Law and Justice were asked to file their written submissions.
The Ministry stated in its submission that it would not like to express its opinion on the matter as it involved another arm of the government.
The Election Commission stated that the law did not require the political parties to furnish their I-T returns to it. However, section 29C of the Representation of People Act 1951 did require political parties to report to the Election Commission sources of contributions of Rs 20,000 or more in a financial year.
The Election Commission also stated that they had submitted a proposal suggesting an amendment so as to make it mandatory for the political parties to publish their audited accounts annually for scrutiny of the citizens.
Interestingly, the CPI and CPI(M) both stated that they had no objection to their I-T returns being shared with the public, making one wonder why was IT department resisting the disclosure with same arguments in case of all political parties.
BSP argued that information was exempted under section 8(1)(d) of the RTI Act, there was no public interest, and disclosure would expose the party to machinations of rival political parties.
NCP said it was not a ‘public authority’; so why should information about it be revealed under RTI. It also argued that I-T returns were derived from balance sheets, profit and loss statement and audit reports of political parties, which contain both personal information of the assesses and “commercial confidence”. So “disclosure would harm the competitive position of a political party”.
Congress went to the extent of saying that the applicant was a “busy body having malafide intent and seeking information for ulterior motive”.
In its rejoinder, ADR stated it had a track record of non-political and non-partisan work and cited a recommendation of the Law Commission that said “it was necessary to introduce internal democracy, financial transparency and accountability in the working of the political parties.”
In his own words, Information Commission Tiwari had the following issue to decide.
“Whether income tax returns of an assessee along with its assessment order and PAN of various political parties can be considered to be exempted under sections 8(1)(d), (e), (g), (h) and (j) of the RTI Act and as to whether such information can be disclosed in larger pubic interest.”
After long hearings and filing of protracted submissions by all the parties, information commissioner A.N. Tiwari ruled on 29th April 2008 that “information which is otherwise exempt can still be disclosed if the public interest so warrants.
The information commissioner directed the public authorities to provide the I-T returns of the political parties and assessment orders for the years mentioned in the application.
The commissioner, however, excluded PAN from the disclosure that it ordered on the ground that such a disclosure could be subjected to fraudulent use.
A summary of the main arguments cited by the Information Commissioner in making his decision is as follows.

  1. Despite being non-governmental, political parties exert enormous influence on state power. It is the parties that appoint the political executive. So it would be facetious to argue that state institutions would come under RTI law but not political parties.
  2. There can be no accountability without transparency. The Supreme Court has underlined in its several rulings that transparency was essential for the survival of democracy.
  3. There is ever growing relationship between party finances and political corruption. And the avowed intent of the RTI Act is to combat corruption.
  4. The laws do not require political parties to disclose their sources of funding. So the only way a citizen can access the details of funding of political parties is through their I-T tax returns.
  5. Even Income Tax Act allows disclosure of I-T returns if I-T commissioner is satisfied that disclosure is in public interest.
  6. Information, which is otherwise exempt from disclosure, should be disclosed under RTI Act if public interest so warrants. And public interest is unmistakably present in a disclosure that has been requested.

Finally, ADR was provided the information requested, except the PANs, 14 months after it filed its original application.
It was an important milestone in the quest for imposing transparency and accountability on political parties.
An analysis of the I-T returns filed by the political parties, made available after the order, revealed several discrepancies in the I-T returns filed by many of the political parties and it came to the fore that many of the political parties were openly violating election commission’s guidelines regarding disclosure of the source of their funds.
Political parties get I-T exemption only if they submit their sources of funding to the Election Commission. Most of the political parties had not been doing so and yet enjoying I-T exemption. So the I-T department should have stopped them from enjoying I-T exemption.
ADR subsequently approached the Supreme Court for directing the I-T department to discontinue exemptions enjoyed by political parties for their failure to disclose their sources of funding to the Election Commission, but that petition was not admitted by the apex court.
ADR says it will continue its fight inside and outside law-courts to compel political parties to start behaving more transparently and accountably.