The Income Tax Department has asked the Election Commission to cancel Aam Aadmi Party’s status as a political outfit because it had reportedly filed false audits for donations worth around Rs 27 crore. Two days before Assembly polls in Goa and Punjab, the IT department informed the election monitor that AAP had filed “false and fabricated” audits on donations in 2013-2014 and 2014-2015, PTI reported.

AAP, which currently holds power in Delhi, will be contesting polls in the two states on Saturday. It is not contesting in the other three states that will have Assembly elections over the next few weeks.

According to PTI, the IT department has been investigating AAP’s donations for the past few years and it noted that there have been “factual discrepancies” for donations made to the party in 2013-2014 and 2014-2015. Records of funds received did not match with “actual funds received”, PTI said. The report also added that the party’s treasurer admitted there were “certain errors” in its communications with the IT department.

Based on this, the IT department has told the Election Commission that it can decide to de-register the party, since it has violated tax laws under the Income Tax Act, 1961.

AAP has blamed the ruling Bharatiya Janata Party and Prime Minister Narendra Modi for the IT department’s move. Delhi Chief Minister Arvind Kejriwal called Modi a “shameless dictator” and said the move came ahead of Goa and Punjab polls because the BJP was “losing badly”.

Voting for 40 seats in Goa and 117 in Punjab will be held on Saturday. Votes will be counted on March 11.