For the first time, the Income Tax department has launched a drive to cleanse dirty money from politics and initiated action against at least 300 high networth politicians for alleged misreporting of wealth in their yearly returns. This includes those who have not filed returns despite huge accumulation of assets over the years.

The measures were taken following a prod from the Election Commission (EC) which wanted the department to match I-T returns with the statement of assets declared by candidates in their affidavits. The election watchdog had found alleged misuse of political funds by some netas and their outfits besides allegations of disproportionate assets accumulated by others.

In an action taken report, the Central Board of Direct Taxes (CBDT) told the EC that it had already proposed action against 103 politicians "where (their) affidavits did not match the I-T returns", and against 195 who had not filed returns despite having affirmed substantial assets in their poll affidavits.

The status report talks about cases reviewed till March 2008. More irregularities are likely to emerge with I-T field formations investigating actual assets of these politicians against their known sources of income. These include those who contested the 2009 parliamentary elections and recent Assembly polls.

Citing one such case, sources said former Bihar CM Rabri Devi had assets worth Rs 24 crore according to her poll declarations but her I-T returns showed an annual income of Rs 7 lakh.

The government had refused to divulge names of politicians against whom action had been initiated. Anil Bairwal of the Association for Democratic Reforms, who had been campaigning for disclosing the names of politicians against whom action has been initiated, said his RTI queries had not been considered by the I-T department. Whatever had come out was the result of 12 letters that EC sent to CBDT between May 2004 and June 2008, seeking updates on its investigation. ADR had obtained copies of the communication.

The exercise of matching affidavits with returns and the action taken reports prepared by I-T investigation will be archived at the election expenditure monitoring cell of the EC. The data will be verified during scrutiny of poll papers in future.

"The correspondence shows that CBDT responded very sluggishly to the EC requests," Bairwal said. The EC had earlier sent the affidavits of candidates who fought Lok Sabha elections in DVDs to CBDT to scrutinize whether the assets were acquired by known sources of income or not. The commission had also sought an action taken report outlining the results of the investigation to be submitted to the commission in a time-bound manner.

Starting from Bihar elections in November 2010, the EC had involved the Directorate General of Income Tax Investigation (DGIT) to keep a close watch on all poll-related expenditure of candidates and cash movements in and out of the states going to polls.

The commission had sought the services of 150 IRS offices for deployment in five states which go to polls in April-May 2011.