Vijay Raaz Vs ITO (ITAT Mumbai)
The assessee filed an appeal before the Income Tax Appellate Tribunal, Mumbai, challenging the order passed by the Principal Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961 for Assessment Year 2020-21. The appeal was filed with a delay of five days, which was condoned by the Tribunal upon being satisfied that sufficient cause was shown.
The assessee had originally filed a return declaring total income of ₹1,44,30,450. The case was selected for limited scrutiny to verify brought forward TDS credit and deduction under Chapter VI-A. The Assessing Officer completed the assessment under Section 143(3) read with Section 144B on 03.09.2022, accepting the returned income.
Subsequently, the PCIT invoked revisionary jurisdiction under Section 263 on the ground that the assessee had claimed deduction of ₹30,00,000 under Section 80GGC towards donation to a political party, which, according to the PCIT, was not properly examined during assessment. The PCIT relied on findings of the Investigation Wing, Ahmedabad, which had conducted search and seizure action on certain registered unrecognised political parties and identified a modus operandi involving routing of donations through intermediaries and return of funds in cash. It was alleged that such parties were used for bogus transactions and tax evasion.
