Economic Times: New Delhi: Wednesday, January 25, 2017.
Details of
donation received by electoral trusts and their further distribution to
political parties are neither personal information nor held by Income Tax
Department in fiduciary capacity, the CIC has said in an order aimed at
ensuring transparency in electoral funding.
The Central
Information Commission (CIC) has directed the I-T Department to make public the
list of electoral trusts formed during 10 years since 2003-04 and whether they
received income tax exemptions.
A division
bench of the Commission also directed the department to take views of these
trusts on furnishing the details of contributions received by them which have
been further distributed to political parties.
It said the
CIC direction to disclose Income Tax returns of the political parties became
final as that was neither challenged nor reversed.
This means
the details of contributions to political parties from electoral trust are
supposed to be disclosed. Similarly, the financial resources of electoral trust
cannot be classified under any category of secrecy or be exempted under any
clause of Section 8 of the RTI Act," the Bench held.
Hence, it
said, the details of contributions received by the electoral trusts and
distributed to political parties is neither given in fiduciary capacity nor can
be considered personal information.
Section 11 of
the RTI Act requires to take view of the third party before any decision on
disclosing information related to them is arrived at.
Notably, the
I-T Department had refused to disclose the information sought by an applicant
three years ago, saying the information about trusts is a "personal
information" and held by it in a "fiduciary capacity" and there
was no public interest in its disclosure.
The RTI Act
allows disclosure of such information, if there is a larger public interest
involved in it.
Electoral
trusts are non-profit companies established for receipt of donations from
person or a company and distributing the same to political parties. The trusts
get income tax exemptions as well.
During the
hearing, the appellant brought to the notice of the Commission that General
Electoral Trust donated a total of Rs 131.65 crore to seven political parties
during financial year 2014-15.
The
appellant, Neeti Biyani, contended that the details of those who donated to the
trust is unknown.
The Bench
comprising Information Commissioners Basant Seth and Sridhar Acharyulu directed
the department to disclose within two months the names and addresses of all the
electoral trusts and other charitable trusts formed between 2003-04 and 2013-14
and whether they claimed exemption from Income Tax and if it was given along
with reasons.
"The I-T
Department holds the information furnished by the electoral trusts for the
benefit of democracy and people at large and disclosure of such information
will serve the benefit of those beneficiaries and hence it should be
disclosed," the Bench held.
The
Commission said there is "larger public interest" in disclosure of
the information related to audit reports of electoral trusts and details of
contributions received by them and distributed to political parties.
"This
involves the information about the electoral trustees, who are third parties in
this case and the procedure under section 11 should have been followed,"
the Bench said.
Noting that
before transparency rules governing contributions to electoral trusts were
formulated by the central government, six electoral trusts had donated a total
of Rs 105 crore to national parties between 2004-05 and 2011-12.
The Bench
pointed out that since the rules are not retrospective, these six electoral
trusts are not required to follow transparency rules and declare their donor
details.
"Thus
details of donors to these six electoral trusts remain unknown, thereby leading
to speculation on whether donations to these trusts were only means of getting
tax exemptions or a way to convert black money stashed in tax havens to white
money in India, if that is the case, the question is why the details of donors
to these electoral trusts, which were formed before the CBDT rules came into
existence, should also be not disclosed," it said.
The
information sought by the appellant is already available with the public
authority as these trusts are required by law to maintain a list of their
donors, the Bench said.
The
Commission said perusal of RTI request reveals that no personal information was
sought.
"The
appellant did not ask Income Tax returns of any person. How can the addresses
of electoral trusts and other charitable trusts...their audit reports as per IT
Act, details of contributions received by those trusts and distributed to
political parties come under the clause of Section 8(1)(j)(personal
information) and 8(1)(e)(fiduciary) of the RTI Act?," it said.
The
transparency panel said the Central Public Information Officer of the I-T
Department did not explain or justify the denial.
The Bench
said the expression "personal information" applies to
"individuals" and not "bodies/institutions" or entities
working for public good.
"There
is a distinction to be drawn between having a legal personality and owning
information in a private personal capacity. An institution which is accountable
to the public and has a public function to performa in a transparent manner
cannot avail the benefit under Section 8(1)(j)," it said.
Rejecting the
Income Tax Department's argument of fiduciary capacity, it said the taxman is
similarly placed like RBI or CBSE to whom electoral trusts have to submit the
returns as required by the statute and respondent authority cannot claim any
exemption under this category.
"When
electoral trusts submitted their income details to the Income Tax Department in
compliance with statutory requirement, it would not create any fiduciary
relationship," it said.
The
Commission said if the CPIO is really considered that it was information of
third parties, he should have consulted the third party, which might have
pleaded it was a personal information.
"Three
CPIOs erred in assuming that information sought was private or personal... and
defied the procedure prescribed by the RTI Act to deny in a hurry," it
said.
The Bench
said electoral trusts are in character of charitable trust and any such
institution should not have "secrets" and they should be open to
public for all purposes including its finances as held by CIC.
Moreover, the
electoral trusts are public trusts and not private trusts, it said.
"Similarly,
the I-T Department holds the information furnished by the electoral trusts for
the benefit of democracy and people at large and disclosure of such information
will serve the benefit of those beneficiaries and hence it should be
disclosed," the Bench held.
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