The Income Tax department has sent a show cause notice to the AAP, for allegedly falsifying its accounts and wilfully attempting to evade tax obligations.
This spells fresh trouble for party, already reeling under electoral losses, internal dissent and public resentment.
Now, tax trouble for AAP
Details of the case
The I-T department found that AAP has not declared donations received to the tune of Rs. 30 crore.
In addition, the party filed contradictory affidavits at the time with the Election Commission and the I-T department. AAP even "admitted" to mistakes in the first filing, which it sought to rectify.
The I-T department said the admission proved that the party wanted to wilfully default.
What does the IT department seek?
The notice, sent to AAP and Arvind Kejriwal said that in view of the charges, the I-T department seeks to file a prosecution complaint under sections 277A (false statement) and 276C (wilful attempt to evade tax). They sought a response from AAP by mid-May.
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Consequences for AAP?
The I-T department sought a response from AAP by 15 May.
If the prosecution were to go ahead, those held accused could face three years of rigorous imprisonment and even a fine.
Under I-T laws, if found guilty, AAP could lose the tax exemption it enjoys under section 13A of the Income Tax Act.