Two months after the Income Tax Department served a notice on the Janata Dal (United) asking it to explain the expenditure incurred on Bihar Chief Minister Nitish Kumar’s much-hyped Adhikar rally in Patna last year, the party has set a new benchmark.
It has not only informed the department that nearly Rs 27 lakh was spent on the event, but also submitted that Rs 30,000 was deposited as TDS (tax deducted at source) liability on making contractual payments.
This was confirmed by Deputy Commissioner, Income Tax (TDS section), Ajay Jadeja who said the I-T return had been filed and “we have found the tax compliance to be proper.”
“Under the I-T Act, tax deduction at source is mandatory while making contractual payments. Since we did not know whether this had happened during the Adhikar rally, we needed to know the source of money and whether the government got its share of tax. So a notice under Section 194 (C) of the IT Act, 1962, was issued to the JD(U) on December 19, 2012, asking it to explain whether tax was deducted at source while making contractual payments,” Jadeja told Deccan Herald here on Wednesday.
The payment was made to contractors who provided transport, catering services, hoardings, posters and banners. It also informed the IT sleuths that rest of the arrangements were done by party members in their individual capacity and hence there was no further TDS liability.
“When we initiated the inquiry, the JD (U) office-bearers were not aware about the TDS liability on contractual expenses.
Eventually, they obtained a TAN (Tax Account Number), recovered TDS from contractors as per the provisions made in Chapter XVII (B) of the IT Act, and deposited it in the government account,” said the senior I-T official.
On whether any political party had ever submitted TDS details for any rally held anywhere in the country, Jadeja said: “So far as I know, the JD (U) is arguably the first major political party in the country to have done so. We have found the tax compliance to be proper.”