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HEAD OFFICE
226,AVVAISHANMUGAM SALAI,ROYAPETTAH,CHENNAI-600014.
Res.: VEDA NILAYAM",81,POES GARDEN,CHENNAI-600086.

J JAYALALITHAA Date:28.9 2013

General Secretary, A.l.A.D.M.K.,
Chief Minister of Tamil Nadu
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(^ [
nC fA) Thiru Varinder Ku+nar,
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z *bcretaryr-
Election Commission of India,
3 0 SEP
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Nirvachan Sadan,
Ashoka Road,
New Delhi-l10 001.
Sir,
Sub: Guidelines on transparency and accountabitity in party
funds - Suggestions of AIADMK - furnished'
Ref: Your Letter No. 76/PPEMS/2013 dated 30.8.2013.
******x

With reference to the above, I am furnishing the views of the

All India Anna Dravida Munnetra Kazhagam on the following issues
in order to enable the Commission to formulate the guidelines on
transparency and accountability in party funds.

Issue No.1 The responsibility of maintaining the books of

accounts of the Party at all levels should be vested
with the Treasurer of the Party or in such person as
may be authorized by the Party, as provided in the
memorandum / rules and by-laws / constitution of the
PartY

Suggestion: MaY be accePted.

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2

Issue No.2 The Treasurer of the political party or such person

authorized by the Party should maintain consolidated
accounts at the Central Party Headquarters (including
all State and local units) in such books of accounts
and in such accounting methods as required for audit
purpose, conforming to the accounting standards
issued by the Institute of Chartered Accountants of
India (ICAI)

Suggestion: It would be appropriate if the Treasurer of the Political

Party or such other person authorized by the Political
Party shall maintain the accounts at the Central Party
Head Quarters level alone. The proposed instructions /
conditions for maintaining of accounts of the local
units in consolidation at the Central Party Head
Quarters will be in consonance with their respective
party procedures as per the by-laws, rules, etc.

Issue No. 3 The authorized office bearer of each registered party

should issue appropriate acknowledgement / receipt
to persons or companies or others for every amount
of contribution or donation or sum received from them
and to maintain such details, as required for audit
purpose, conforming to the accounting standards.

Suggestion: A reading of Section 29(C) of the Representation of

the People Act, 1951 is necessary and the same
contemplates as follows:
"Secfion 29(C) Declaration of donation
received by the political parties-
(1) The treasurer of a political party or any
other person authorized by the political
party in this behalf shall, in each financial
yearl prepare a report in respect of the
following, namely - (a) the contribution in
excess of twenty thousand rupees received
by such political party from any person in
that financial year; (b) the contribution in
excess of twenty thousand rupees received
by such political party from companies
other than Government Companies in that
financial year.
 6\
3

(2) The report under sub-section (1) shall

be in such form as may be prescribed.
(3) The report for a financial year under
sub-section (1) shall be submitted by the
treasurer of a political party or any other
person authorized by the political party in
this behalf before the due date for
furnishing a return of its income of that
financial year under Section 139 of the
Income Tax Act, 1961 to the Election
Commission.
(4) Where the treasurer of any political
party of any other person authorized by
the political party in this behalf fails to
submit a report under sub-section (3),
then, notwithstanding anything contained
in the Income Tax Act, 7961, such political
party shall not be entitled to any tax relief
under that Act. "
As the above provision of the Representation of
the People Act, 1951 covers the issue of maintaining
such details as required for audit purpose in respect of
amount received in excess of Rs.20,000/-, there is no
necessity for any specific instructions.
As all the parties are required to maintain their
account details in consonance with the accounting
standards and therefore any receipt of amount as
donation or corpus fund may be acknowledged by the
respective political parties.
The donation / contribution received are reflected
in the Financial Statements filed by the political party
before the Income Tax Department as well as before
the Election Commission of India.
Issue No. 4 All such donations / contributions I sum received
should be deposited in the bank account(s) of political
party within a reasonable time.

Suggestion: May be accepted.

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fssue No. 5 The Treasurer or the authorized office bearer of the

party should ensure that all funds raised for the party
are used only for activities, ds enshrined in its
memorandum / Rules and by-laws / constitution.
Suggestion: This suggestion may be accepted.

Issue No. 6 Where the party provides any lump sum amount to its
candidates for meeting their election campaign
expenses, it should be ensured that such amount is
given only by crossed account payee cheque or draft
or by RTGS or NEFT or internet transfer; that the
amount does not exceed the ceiling prescribed for
such candidates; and that before filing its election
expenditure statement with the Commission, the
party obtains utilization certificate from such
candidates for funds disbursed to them that it has
been spent for defraying their election expenses.

Suggestion: In respect of this issue, Section 77 of the

Representation of the People Act, 1951 states as
follows:
"Secfion 77 Account of election
expenses and maximum thereof -
(1) Every candidate at an election shall,
either by himself or by his election
agent, keep a separate and correct
account of all expenditure in connection
with the election incurred or authorized
by him or by his election against
between (the date on which he has been
nominated) and the date of declaration
of the result thereof, both dates inclusive
Explanation-1 For the removal of doubts,
it is hereby declared that (a) the
expenditure incurred by leaders of a
political party on account of travel by air
or by any other means of transport for
propagating."
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As both the candidate as well as the respective

political party have to show their respective expenses
and expenditure in their account before the Election
commission of India and the Income Tax Department
as per the statutory provisions, there is no necessity
for obtaining any utilization certificate from the
candidate as mentioned in issue no.6 and the issue
requiring to ensure that amounts do not exceed the
prescribed ceiling for each candidate, has been taken
care of by the statutory provision under Section 77(3)
of the Representation of the people Act, 1951.

Issue No. 7 The Treasurer

or authorized office bearer of the party
should ensure that any payment or aggregate of
payments made from the party account to any person
or company or agency exceeding Rs. 20,000/- in a
day is done only by crossed account payee cheque or
draft or by RTGS or NEFT or through internet transfer.

Suggestion: It is suggested that the payment up to Rs. 20,000/-

can be paid by cash for each transaction.

fssue No. 8 The party should ensure that any donation or

contribution from a person or company or entity
exceeding Rs. 20,000/- in a financial year is received
by crossed account payee cheque or draft or by RTGS
or NEFT or through internet transfer.
Suggestion: considering the enormous number of members in the
party, it will be practically impossible for tracking the
cash receipts exceeding Rs. 20,OOO/- from a single
person in a financial year. whenever donations are
received, there are no separate ledger accounts for
tracking the receipts of each of the donors. In the
above circumstances, the proposar is impracticable for
political parties to follow the same.
fssue No. 9 During the election process, the political parties may
ensure that any party candidate, party functionary or
party worker does not carry party funds in cash,
exceeding a specific amount.

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Suggestion: It is suggested that if the political party allocates

election fund to any party candidate, the cash limit
may be restricted to 10olo of the election expenditure
ceiling limit. In the event of the party not funding the
candidates, the reply to the above question does not
arise.
Issue The political party should get their accounts audited
NoE 0 for every financial year and submit copy of the
audited accounts to the Election Commission of India
before 30th September or before the due date for
furnishing return of income of that financial year along
with their contribution reports referred to in Section
29C of the R.P. Act, 1951.
Suggestion As the political parties comply with the statutory
requirement under the Income Tax Act, 1961 and of
the Representation of the People Act, 1951, there may
not be any necessity to file accounts as proposed in
this issue.

Yours sin