Public Political Party Vs DCIT (Delhi High Court)
The Delhi High Court dismissed the appeals challenging the Income Tax Appellate Tribunal’s common order dated 17.12.2025. The appellant contended that after the Tribunal held the addition made by the Assessing Officer under Section 68 of the Income Tax Act, 1961 to be unsustainable, it could not direct taxation of 6% of the donation/contribution under Section 56. The appellant further argued that deletion of the Section 68 addition entitled it to exemption under Section 13A.
The Revenue submitted that the appellant political party had neither undertaken political activities nor received genuine political contributions, but had issued forged donation receipts, returned the donated amounts to the contributors, and retained only 6% as commission. It maintained that the Tribunal had correctly treated the 6% commission as income under Section 56, while reiterating, without prejudice, the Department’s stand that the entire amount was liable to be added under Section 68.
The High Court noted the Tribunal’s categorical factual finding that the appellant had issued bogus donation receipts to enable contributors to claim deductions under Sections 80GGB and 80GGC and had repaid the purported donations to those contributors. It held that these findings of fact could not be interfered with in an appeal under Section 260A.
