Sunil Kamlashankar Dubey Vs ITO (ITAT Mumbai)
Mumbai ITAT upheld disallowance of ₹2 lakh claimed u/s 80GGC, holding that the alleged political donation was not genuine despite payment through banking channels.
The Tribunal observed:
- Reopening was based on search findings on political parties engaged in bogus donation entries, including cash return after commission
- The assessee claimed donation to such a party but:
- Failed to provide any credible evidence of genuine intent or connection
- Could not establish association or involvement with the political party
On reopening:
- ITAT upheld validity relying on prima facie material (Raymond Woollen Mills principle)
- Assessee failed to file objections as per GKN Driveshafts, weakening challenge
On merits:
- Mere banking channel payment and receipt is not sufficient
- Applying test of human probabilities:
- Assessee (salary ₹1 lakh/month) donating ₹2 lakh appeared improbable
- No evidence that donation was bona fide or for legitimate political purpose
On procedural grounds:
- No cross-examination sought by assessee, hence argument rejected
Accordingly:
- Disallowance u/s 80GGC confirmed
- Appeal dismissed in full
The ruling reinforces a key principle: “Documentation alone cannot prove genuineness—transactions must pass the test of human probability.”
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. This appeal by assesseeis directed against the order of Ld. CIT(A) / NFAC dated 15.07.2025 for A.Y. 2019-20. The assessee has raised following grounds of appeal;
i. That the reassessment u/s 147 based on generic 3 VRU/CRIU intelligence without assessee-specific material lacks live nexus, rendering proceedings void ab-initio.
ii. That the mandatory pre-assessment enquiry u/s 148A is vitiated as complete relied-upon documents were not supplied, defeating meaningful hearing opportunity.
iii. That the authorities relied upon third-party statements without affording cross-examination opportunity, breaching natural justice. [Andaman Timber Industries v. CCE (SC)]
iv. That the CIT(A) order violates Section 250(6) by failing to address specific submissions point-wise and demonstrating non-application of mind.
v. That the disallowance u/s 80GGC is erroneous as statutory conditions are satisfied: banking channel payment, Section 29A registration, proper disclosure. “Unrecognised party” is not a statutory bar.
vi. That the CIT(A) abdicated co-terminus powers by issuing vague directions instead of conclusively deciding the Chapter VI-A claim.
vii. That sustaining disallowance on grounds not raised in 7 show cause notice violates SCN-order congruence, rendering addition ultra vires.
viii. That interest u/s 234A/B/C and penalty u/s 270A deserve deletion given bona fide compliance and consequential nature.
2. Brief facts of the case are that the assessee is an individual, filed his return of income for AY 2019-20 on 23.08.2019, declaring income of Rs. 8,31,810/-. The case of the assessee was reopened on the basis of information in the Insight portal that his search and seizure action under Section 132 was carried out on various political parties and charitable organisation on 02.02.2021 at the premises of Manvadhikar National Party (MNP). During the course of search operation, it was revealed that such political party has accepted donation from various individual through banking channel and after deducting certain percentage of commission, the amount was returned. The assessee has claimed donation of Rs.2.00 Lacs to Manvadhikar National Party and claim deduction under Section 80GGC. On the basis of such information, the Assessing Officer (in short ‘AO’) recorded reasons of reopening and after obtaining necessary approval, notice was issued under Section 148 on 11.04.2023. In response to notice under Section 148, the assessee filed his return of income on 26.05.2023, declaring income of Rs. 8,76,810/-. During the assessment proceeding, the AO noted that assessee has claimed various deductions including deduction of Rs.2.00 Lacs under Section 80 GGC. The AO issued show cause notice to substantiate the genuineness of such deduction and as to why such deduction be not treated as bogus. The assessee filed his reply dated 09.12.2024. The assessee in his reply stated that the donation was given in good faith through bank account. He was not aware about operation undertaken by Ram Bhawan Ojha. The reply of assessee was not accepted by AO and it was added back to the income of assessee for assessment year dated 20.01.2025.
