AG : Political parties have to file income tax returns.
Except the CPI(M) and another party, no other national parties filed the returns. Case came to Supreme Court.
SC condemned the parties and directed them to file returns.
CJI to AG : We are asking you, what is the control of govt on the money being used after encashing bonds?
AG : The bonds are valid only for 15 days. After that, it is paper.
CJI : What is the guarantee that the party will use it for political purposes & won't use for others
CJI : We don't want to get into political arena and don't want to comment on any political party. Suppose, there is a party which wants to finance a protest, which has the potential of violence, can't they use bonds to fund it?
SG : Only political parties can take bonds.
CJI : There are political parties who do terrorism.
SG : Only parties with at least 1% vote share can buy bonds.
CJI : We are sure that there are parties who meet this criteria and have violence as an agenda.
AG : The then Finance Minister Arun Jaitley said that blackmoney was a huge menace in political funding. Therefore this bonds was devised.
CJI : You tell us. Can someone buy the bonds and fund terrorist activities?
SG interjects to say no one can buy subsequently. SG also says to AG "KYC norms".
AG : Yes, KYC norms.
CJI: You are not telling us about anonymity?
Bhushan interjects : Subsequent purchaser can buy through cash.
CJI : That can be said of any transaction, unless you make it non-transferable.
Bhushan : That was the objection of the RBI
CJI : Are these amounts brought to tax somewhere, or are these undisclosed money?
AG : All payments need to be through cheque, or DD, so it has to be through banking channels, so no blackmoney.
AG referring to the Union's affidavit and says that all payments have to made through banking channels.
"Therefore, no cash, no blackmoney", AG says.
CJI : Suppose a businessman is going to buy bonds, does he have to disclose whether it is bought by white money or black money? And, does he have to pay tax on it?
AG : Yes.