Income Tax Officer Exposes ₹204.76-Crore Bogus Political Donation Racket Involving Garib Kalyan Party and CAs

An Income Tax Department officer has lodged a formal complaint against office-bearers of the Garib Kalyan Party, two front companies, and three chartered accountants, uncovering a massive ₹204.76-crore political donation and cash-back scheme.

The complaint was filed on September 25 by Yatish Shashikant Kale, Assistant Director of Income Tax, Unit-1(1), Ahmedabad. According to tax officials, the accused ran an organised accommodation-entry racket across financial years 2022-23 to 2025-26, routing taxpayer funds to claim fraudulent tax benefits before returning the money in cash.

How the Multi-Crore Cashback Scheme Operated

Registered as an unrecognised political party with the Election Commission of India in March 2022, the Garib Kalyan Party allegedly received donations from taxpayers seeking deductions under Section 80GGC of the Income Tax Act.

The complaint names eight individuals involved in the operation:

• Party Office-Bearers: Neeraj Kumar Kshatriya (President), Dhananjay Singh Rajput (Secretary), and Dhiraj Kumar Kshatriya (Treasurer).
• Middlemen & Front Executives: Abhishek Chandraprakash Tiwari (Main facilitator and proprietor of Krishna Enterprises) and Pradeep Singh Parihar (Proprietor of Jalaram Enterprises).
• Chartered Accountants: Kuldeepdan Parvatsinh Taparia, Ashok Kumar Radheshyam Shah, and Pankaj Agarwal.

Investigating officers revealed that funds received by the party were transferred via banking channels to Krishna Enterprises and Jalaram Enterprises under the guise of buying grains, pulses, and relief goods. False bills and accounting entries were systematically generated to legitimise the transactions.

Once deposited into corporate accounts, the firms withdrew the cash, retained a five to seven per cent commission, and handed the remainder back to party leaders, who then returned the cash to the original donors after taking their cut.

Exchequer Suffers Estimated ₹62-Crore Tax Loss

Departmental search operations and statements recorded during preliminary inquiries exposed the layering mechanism. Party treasurer Dhiraj Kshatriya admitted during interrogation that the political organisation functioned primarily to earn commissions through fake entries.

Tax authorities estimate that the bogus donation network caused a direct revenue loss of approximately ₹62 crore to the government exchequer—representing roughly 30 per cent in illegal tax write-offs claimed by donors.

Kale, who has served with the department since 2008, noted that internal data analytics flagged suspicious donation patterns, triggering deep scrutiny into the party's banking records. Police and tax authorities are expanding the investigation to track cash movement, audit certified accounts, verify donor identities, and examine false contribution reports submitted to the Election Commission.