The Election Commission has already directed the Income Tax Department to issue notices to them for not filing their income tax returns.
Recently a country-wide probe conducted by the Income Tax Department has found that 300 registered political parties have never filed their income tax returns.
The EC has also asked the Central Board of Direct Taxes (CBDT) to ascertain the financial status of these small parties for alleged violation of tax laws and money laundering. The CBDT conducted a probe on this issue and has submitted a report to the election panel. According to reports a number of political parties even do not possess Permanent Account Number (PAN).
It was alleged that people are floating such political parties in large numbers to evade taxes as the donations to them are exempted from payment of income tax. The EC has asked the Income Tax Department to intensify the probe and to serve show-cause notices to these small parties under the relevant provisions of Income Tax Act and ascertain the source and utility of the funds they received through donations.
The report has tracked the I-T returns of these small parties in 13 states including Tamil Nadu, West Bengal and North East. All the national and other major political parties had regularly filing their I-T returns.
Earlier Chief Election Commissioner S Y Quraishi had observed that almost 75 to 80 per cent of the registered political parties have not participated in any elections for the last several years.