Saurabh Pravinbhai Patel And Brijesh Pravinbhai Patel AOP Vs Assessment Unit (ITAT Ahmedabad)
The appeal before the Income Tax Appellate Tribunal, Ahmedabad arose from an order dated 12 October 2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, confirming an assessment framed under section 143(3) of the Income-tax Act, 1961. The dispute related to Assessment Year 2021–22.
The assessee, an Association of Persons (AOP) engaged in real estate and renting activities, had filed its return of income declaring total income of ₹25,93,260. During the year, it claimed deduction under section 80GGC in respect of donations allegedly made to two political parties—₹62,01,000 to Kisan Party of India and ₹51,50,000 to Rashtriya Samajwadi Party—aggregating to ₹1,13,51,000.
To verify the genuineness of these donations, the Assessing Officer (AO) issued notices under section 133(6) to the concerned political parties seeking confirmation and supporting details. These notices were returned unserved or remained unanswered. A show cause notice was thereafter issued to the assessee calling upon it to justify the claim of deduction under section 80GGC. The assessee failed to respond to the show cause notice and did not furnish any documentary evidence in support of its claim.
During further verification, the AO relied on information gathered from news reports and public sources indicating that certain political parties had allegedly mobilised large sums of money as donations and were under scrutiny for financial irregularities, including round tripping of funds. The AO also referred to information available on the Election Commission of India portal, which showed that several registered unrecognised political parties had been declared inactive due to non-compliance with statutory requirements and failure to contest elections over multiple years.
