Sarojben Gaurang Doshi Vs ITO (ITAT Ahmedabad)
Summary: ITAT Ahmedabad dismissed Sarojben Gaurang Doshi’s appeal and upheld disallowance of ₹6,00,000 claimed as deduction under Section 80GGC for donation to Rashtriya Samajwadi Party (Secular). The assessee contended that the donation was made through banking channels and was supported by the bank statement, payment receipt and registration credentials of the political party.
The Revenue relied upon investigation material concerning RUPPs, non-compliance with notice under Section 133(6), physical verification showing that the party was not functioning at its stated address and its failure to regularly file returns and contribution reports. The Tribunal followed its consistent view in similar political-donation cases and held that banking-channel payment and donation receipts could not override evidence indicating systematic layering of funds and accommodation entries.
Relying also on the Supreme Court principles in CIT v. Durga Prasad More and Sumati Dayal v. CIT, the Tribunal held that taxing authorities can examine surrounding circumstances and apply the test of human probabilities rather than accepting documentary form alone. Since the assessee failed to establish that the contribution represented a genuine political donation eligible for deduction, the CIT(A)’s order was affirmed and the appeal was dismissed.
Cases Discussed
1. Saurabh Pravinbhai Patel Vs ITO, ITA No. 1017/Ahd/2023, order dated 30.04.2025 (ITAT Ahmedabad) — followed on disallowance of Section 80GGC deduction involving political donations.
2. Mihir Bipinbhai Parekh Vs DCIT (ITAT Mumbai) — cited as a coordinate-bench decision involving similar Section 80GGC political-donation issues.
3. Milind Pankajbhai Shroff Vs PCIT (ITAT Rajkot) — detailed findings concerning Rashtriya Samajwadi Party (Secular), its alleged accommodation-entry mechanism and bogus political donations were reproduced and relied upon.
4. Ritesh Sugan Jain Vs ITO, ITA No. 8546/Mum/2025 (ITAT Mumbai) — cited as another coordinate-bench decision on similar political-donation claims.
5. Rajen Jayantilal Merchant Vs Assessment Unit (ITAT Ahmedabad) — cited as a coordinate-bench decision sustaining disallowance involving Section 80GGC political donations.
6. Pavankumar M. Sanghvi v. ITO, [2017] 81 taxmann.com 308 — referred to concerning accommodation-entry transactions and genuineness.
7. Pavankumar M. Sanghvi v. ITO, [2018] 97 taxmann.com 398/258 Taxman 160 (SC) — SLP dismissal referred to while considering transactions involving alleged shell entities.
8. Abhishek Ashok Lohade, ITA No. 816/PUN/2018, order dated 22.11.2022 (ITAT Pune) — relied upon in the reproduced decision concerning the effect of fraud on documentary evidence.
9. CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) — relied upon for looking beyond documentary form and examining surrounding circumstances.
10. Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) — relied upon for applying human probabilities and determining the real nature of a transaction.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi dated 20.03.2026 under Section 250 of the Income Tax Act, 1961 for A.Y. 2019-20.
2. The assessee has raised the following grounds of appeal:
“1. General Ground: The learned Commissioner of Income Tax (Appeals) [CIT(A)] – NFAC erred in law and on facts in confirming the total assessed income at 11,02,130/- against the returned income of 5,02,130/-. The appellate order is bad in law, contrary to the facts of the case, and passed without proper appreciation of legal provisions.
2. Arbitrary Disallowance of Deduction u/s 80GGC (6,00,000/-): The learned CIT(A) erred in law and on facts in sustaining the disallowance of deduction of 6,00,000/- claimed by the Appellant under Section 80GGC of the Act. The lower authorities failed to appreciate that all legal prerequisites for claiming deduction under Section 80GGC were completely fulfilled.
3. Ignoring Undisputed Banking Channels and Primary Evidence: The learned CIT(A) erred in failing to consider that the donation of 6,00,000/- was made transparently through official banking channels. The Appellant produced primary corroborative evidence, including the bank account statement, payment receipt, and registration credentials of the political party, which were brushed aside on mere suspicion and third-party information.
4. Reliance on Third-Party Information Without Cross-Examination: The lower authorities heavily erred in placing reliance on adverse findings obtained from the ‘Insight Portal’ and investigations regarding “Rashtriya Samajwadi Party (Secular)” without providing the Appellant any direct material evidence or opportunity to cross-examine third parties. This constitutes a severe violation of the Principles of Natural Justice.
5. Responsibility of the Donor vs. Internal Compliance of Donee: The learned CIT(A) grossly erred in penalizing the Appellant for the alleged subsequent internal statutory non-compliances of the political party (such as non-filing of contribution reports under Section 29C of the Representation of the People Act, 1951). The Appellant, being an innocent individual donor, has no legal control over the internal management and administrative filings of a registered political party.
6. Levying of Consequential Interest: The learned CIT(A) erred in confirming the levy of consequential interest under Sections 234A, 234B, and 234C of the Act.
The appellaht prays your Honor to stay the demand.
The Appellant craves leave to add, amend, alter, delete, change or modify any of all grounds of appeal before or at the time of hearing.”
3. The assessee filed her return of income for A.Y. 2019-20 declaring total income of Rs.5,02,130/-. Subsequently, on the basis of information available with the Department regarding alleged bogus political donations, proceedings under section 147 were initiated and notice under section 148 was issued. In response, the assessee filed return declaring the same income.
4. During the assessment proceedings, it was noticed that the assessee had made a donation of Rs.6,00,000/- to Rashtriya Samajwadi Party (Secular) and claimed deduction under section 80GGC of the Act. The assessee furnished the donation receipt, bank statement and documents relating to registration of the political party and contended that the donation was made through banking channel.
5. The Assessing Officer, however, relying upon the information gathered during search proceedings conducted in the case of RUPPs group and the report of the Verification Unit, held that the said political party was involved in providing accommodation entries in the guise of political donations. It was further noted that notice issued under section 133(6) to the political party remained uncomplied with and physical verification revealed that the party was not functioning at the given address. It was further noticed that the political party was not filing tax returns regularly, nor filed any contribution report u/s 29C of R.P. Act, 1951. Accordingly, the deduction of Rs.6,00,000/- under section 80GGC was disallowed and added to the income of the assessee and the income was accordingly assessed at Rs.11,02,130/- added to the income of the assessee.
6. During the appellate proceeding before the Ld. CIT(A), the assessee repeated the same arguments as forwarded before the Assessing Officer, and claimed that the AO could not prove the cash trail of the donation given. After considering the contention of the assessee and the findings in the assessment order, the Ld. CIT(A), rejected the claim of the assessee, by observing as under:-
“…As per information received it was noted that Rashtriya Samajwadi Party (Secular) was not active and did not carry out any political activities during the year under consideration. Further it was seen that the impugned political party did not even file contribution report to the Hon’ble election Commission of India from FY 2017-18 which is mandatory as per Section 29C of Representation of People Act, 1951. Thus even though Rashtriya Samajwadi Party (Secular) was registered political party, its main objective was to provide accommodation entries in lieu of bogus political donation to various persons. The appellant was one of such beneficiary. Thus assessee’s claim of giving donation to the political party through banking channel is not acceptable as the impugned party was not utilizing the donation receipts for carrying out any political activity.”
7. Aggrieved against the appellate order, the assessee filed appeal before this tribunal. Before us, the learned counsel for the assessee submitted that the assessee has made the donation through official banking channels, has also submitted evidence before the AO his bank account statement, payment receipts and registration credentials of the political party. The ld. counsel further submitted that the AO has drawn the conclusion about the political party based on the information obtained from the insight portal but has not corroborated with independent enquiry. It was further argued before us that the assessee has no control over the political party and accordingly, should not be penalised for the subsequent internal statutory non-compliances by the political party u/s 29C of the R. P. Act, 1951.
8. On careful consideration of the grounds of appeal and the contention of both the parties, we notice that the identical issue was considered by Co-ordinate Bench of this Tribunal in in the case of Saurabh Pravinbhai Patel Vs. ITO in ITA No. 1017/Ahd/2023 vide order dated 30.04.2025 on donation made to political parties u/s. 80GGC of the Act wherein it was held as follows:
“4. Aggrieved against the assessment order, assessee filed an appeal before Ld. CIT(A). After considering the Tribunal’s decision, confirmed the disallowance made by the Assessing Officer by observing as follows:
“While adjudicating the instant case by the undersigned, the eye-opening facts came in notice in the case of Pavan Anil Bakeri vs. Deputy Commissioner of Income-tax adjudicated by the Hon’ble ITAT, Ahmedabad Bench which changed the course of the case to a whole new direction In the above case the Hon’ble ITAT held that where assessee made donation to a political party and claimed deduction under section 80GGC, since Assessing Officer found that bank accounts of above political party had been used by accommodation entry provider where donation received by cheques were layered though various bank accounts and ultimately cash was returned back, donation claimed under section 80GGC was merely accommodation entry and thus, disallowance of deduction under section 80GGC was proper. The sequence of events in the above case are “The assessee paid donation of Rs 52,00,000/- to Rashtriya Samajwadi Party (Secular) To verify the genuineness and utilization purpose of the donation, a notice u/s 133(6) was issued on 5-10-2018 to Rashtriya Samajwadi Party (RSP) There was no representation from RSP Therefore another opportunity was granted vide letter dated 16-10-2018 Again there was no response from RSP. Therefore a summon u/s 131(1) of the Act was issued to Shri S.N. Chaturvedi, National President, RSP to attend the office on 19-11-2018 to produce the requisite the donation details. No one attended the office of the said date of hearing.
2.1 RSP is a political party registered with Election Commission of India. The Assessing Officer called for the bank details of RSP with Oriental Bank of Commerce, New Naroda Branch. From the perusal of the bank statement, it was observed there was a credit entry of Rs. 52,00,000/-on 07-10-2015 which is donation given by the assessee and there was two debit entries amounting to Rs. 27,00,000/- and Rs 25,00,000/- respectively on the same day On further enquiry from the Oriental Bank of Commerce the amount of Rs. 27,00,000/- credited to Sterlite Inc and Rs 25,00,000/-credited to Shah And Co. on 7-10-2015.
2.2. On examination of the RSP bank statement, it was found that it is a general practice of crediting huge cash and subsequently transferring to another party on same day. Further analysis of the transaction particulars reveals that the cash was transferred to mainly four parties namely Guru Enterprise, Unique Trading, Mahavaisnavi and KK Indersriz. It was also observed that no cash withdrawal for expenses like rent, electricity, water, newspaper, fuel etc of RSP and is not reflecting in the bank account. There is an Inspector of Income-tax was deputed to visit the premises of RSP at UG-8. Harekrishna Complex, C.TM Char Rasta, Amraiwadi, Ahmedabad-380026 on 15-11-2018 The Inspector submitted his report that RSP office situated on 2nd Floor of 3 storey building which is a small shop and shutter of which was half closed on that day. Nearby peoples were inquired that RSP Office which is found to be closed in most of the times. Copy of the said RSP Office photographs is reproduced in the assessment order. Further perusal of the records of RSP it is observed that during the assessment year 2016-17, RSP has received only donation amounting to Rs. 14,73,309/- whereas as per the bank account statement of the RSP in Oriental Bank of Commerce, total amount credited is Rs. 38,15,03,885/-That apart from RSP is maintaining two other bank account one at Bank of India and another of Central Bank of India. Further enquiry of Mis. Sterlite Inc and Shah And Co both the accounts were closed on 30-3-2016. An enquiry by the Bank both the proprietorship firms, where there is no stocks found and the office premises were being occupied by another person.
2.3 On further verification the donation amount of Rs. 52,00,000/-paid by the assessee to RSP was transferred to Waheguru Enterprise and Sapan Traders on 7-10-2015 of Rs. 25,00 000/-and Rs. 27,00,000/- respectively. This systematic pattern of transferring the funds credited by RSP clearly establishes the modus operandi of the account opening i.e. to route or transfer the funds of RSP back to the donator. Thus the assessee gave Rs. 52,00,000/- to RSP in the form of donation which was transferred to accounts of Shri Mukesh Mehta who claimed to be a businessman. Again the said amount was transferred to Sapan Traders and Waheguru Enterprise. Thus the donation claimed to be paid by the assesse is found to be bogus and the same is disallowed u/s. 80GGC of the Act and added back to the total income of the assessee and also initiated penalty proceedings u/s. 271(1)(c) of the Act for concealment of income.”
On further appeal Ld. CIT (A) observed in the case “The Assessing Officer has clearly brought out facts that bank accounts of above political party have been used by the accommodation entry provider where the donation received by cheques were layered through various bank accounts and ultimately cash was returned back. I therefore, agree with the findings given by the AO that donation of Rs. 52,00,000/-claimed u/s. 80GGC is merely accommodation entry. The Honorable ITAT Ahmedabad in the case of Pavankumar M. Sanghvi v. ITO, Wd. 3(1)(2), Baroda [2017] 81 taxmann.com 308 on the issue of accommodation entry has observed as under-
“8. As I proceed to deal with genuineness aspect, it is important to bear in mind the fact that what is genuine and what is not genuine is a matter of perception based on facts of the case vis-a-vis the ground realities. The facts of the case cannot be considered in isolation with the ground realities. It will, therefore, be useful to understand as to how the shell entries, which the loan creditors are alleged to be, typically function, and then compare these characteristics with the facts of the case and in the light of well settled legal principles. A shell entity is generally an entity without any significant trading, manufacturing or service activity, or with high volume low margin transactions to give it colour of a normal business entity used as a vehicle for various financial manoeuvers. A shell entity, by itself, it not an illegal entity but it is their act of abatement, of, and being part of financial manoeuvring to legitimize illicit monies and evade taxes, that takes it actions beyond what is legally permissible These entities have every semblance of a genuine business its legal ownership by persons in existence, statutory documentation as necessary for a legitimate business and a documentation trail as a legitimate transaction would normally follow. The only thing which sets its apart from a genuine business entity is lack of genuineness in its actual operations. The operations came out by these entities, are only to facilitate financial manoeuvring for the benefit of its clients, or with that predominant underlying objective, to give the colour of genuineness to these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the financial world, as many other evils. Even a layman, much less a Member of this specialized Tribunal, cannot be oblivious of these ground realities.”
In the aforesaid case, the Hon’ble ITAT bench held “As regarding ground no. 2, donation of Rs. 52,00,000/- made u/s. 80GGC, the ground is general in nature. The assessee has not produced any additional evidence in support of its claim. In fact the assessee had stated that it had cordial relationship with Mr. Kamlendu Tripathi Secretary of RSP and no other criteria was followed for making these donations. The Ld AO made a detailed enquiry of RSP and its Bank accounts and transfer of funds to one Shri Mukesh Mehta proprietor of two firms and he transferred it to Waheguru Enterprise and Sapan Traders, which is clearly a systematic financial maneuver to legitimate illicit moneys and evade taxes. It is appropriate to follow the Hon’ble Supreme Court judgment, wherein SLP filed by the assessee is dismissed confirming the Tribunal’s decision to come to the conclusion that the entire loan transaction was not genuine, in the case of Pavankumar M. Sanghvi v. ITO [2018] 97 taxmann.com 398/258 Taxman 160 (SC) which held as follows:
Assessee received certain sum as loan from two companies – Assessing Officer having found that said lender companies were shell entities added loan amount to income of assessee under section 68-Bank statement of lender companies revealed high transactions during day and a consistently minimal balance at end of working day-Further day when assessee was given loan there were credit entries of almost similar amounts, and balance after these transactions was a small amount Tribunal taking into account bank statements of lender companies and fact that assessee failed to produce these lenders for verification held that alleged loan transactions were not genuine -High Court by impugned order held that since Tribunal had given elaborate reasons to come to conclusion that entire loan transaction was not genuine, appeal filed before it was to be dismissed Whether Special Leave Petition against impugned order was to be dismissed.
5.2 In the absence of any evidence from the assessee, the grounds raised by the assessee are untenable and therefore the same is rejected. The findings given by the lower authorities does not require any interference and the addition is sustained.
It is pertinent to mention here that out of two political parties to whom the appellant paid total donation of Rs. 1,13,51,000/- the modus operandi of the one political party named the Rashtriya Samajwadi Party (Secular) has already been discussed in details in the preceding paragraphs of the instant order. It can be safely presumed that the modus operandi of other political party named Kisan party of India is also indulging only in providing accommodation entry as can be ascertained from various newspaper reports and enquiries which is being conducted by various institutions.
In view of the findings in the above case I am inclined to agree with the decision made by the AO during the assessment proceedings regarding the donation made was basically a bogus donation as the Political Party is indulging only in providing accommodation entry. Thus in view of the above discussion, the submission made by the appellant regarding the claim of deduction for donation of Rs. 1.13.51,000/- to be allowed is not acceptable as already discussed in detail in the preceding Paras of the instant order. Therefore, the ground of appeal stands dismissed.”
5. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:
1. The learned National Faceless Appeal Centre has erred in law and facts by confirming the disallowance of claim for deduction under section 80GGC of the Act of Rs.1,13,51,000/- made by the learned A.O. and therefore the learned A.O. be directed to allow the same while computing total income.
2. That the appellant craves liberty to add, amend and alter any ground of appeal before the final hearing.
6. Ld. Counsel appearing for the assessee filed same set of documents filed before the Assessing Officer and reiterated its submissions. Nothing new documents or evidences filed before us to deviate from the findings of the Lower Authorities. The Ld AO has clearly brought out facts that bank accounts of above political parties have been used by the accommodation entry provider, where the donation received by cheques were layered through various bank accounts and ultimately cash was returned back. The same is not disputed by the assessee with relevant materials. Further the Ld AO made a detailed enquiry of RSP and its Bank accounts and transfer of funds to one Shri Mukesh Mehta proprietor of two firms and he transferred it to Waheguru Enterprise and Sapan Traders, which is clearly a systematic financial maneuver to legitimate illicit moneys and evade taxes. In the absence of any fresh materials in support of the assessee’s claim. The Grounds raised by the assessee is devoid of merits and liable to be dismissed.”
9. We also find that similar issue stands adjudicated by the Co-ordinate benches of this Tribunal in the cases of :-
i. Mihir Bipinbhai Parekh Vs. DCIT (ITA No. 1173/Mum/2026),
ii. Milind Pankajbhai Shroff Vs. Pr. CIT-1, Rajkot (ITA No.93/RJT/2023), Ritesh Sugan Jain Vs. ITO (ITA No. 8546/Mum/2025),
iii. Rajen Jayantilal Merchant Vs. ITO (ITA No. 1683/Ahd/2025),
10. For the sake of ready reference, the detailed adjudication in the case of Milind Pankajbhai Shroff, vs The Pr. CIT 1, Rajkot in ITA No.93/RJT/2023 dtd. 20/05/2024 is reproduced as under:-
“22. Now, we shall also adjudicate the other arguments advanced by Id. DR for the revenue to the effect that “fraud vitiates everything”. In this connection, at the cost of repetition, we reiterate the findings of ld PCIT, which are as follows:
i. Rashtriya Samajwadi Party (Secular) is a Registered Unrecognized Political Party and it is one of the 23 RUPPs covered in the RUPPs Group of Ahmedabad. This party was established on 21.10.2008 and its registered address as per its website is Samruddhi Complex, Opp- Sakar-3, Income Tax Circle, Ahmedabad. However, during pre-search enquiry, no party office is found at the aforesaid address.
ii. The modus-operandi of this political party is that the donation is received through cheque in the bank account of the party and then routed through intermediary(ies) (which is generally shell entity(ies) controlled by either the persons running the party or by any other person) in the garb of various purchases or other payments, which are found to be bogus in nature. It is pertinent to mention here that the political party doesn’t pay any tax since it is exempt u/s 13A of the Act.
iii. During the search proceedings, on 07.09.2022, statement on oath u/s 132(4) of the I.T. Act, was recorded of Smt. Sandhya Singh, National Party President of the Rashtriya Samajwadi Party (Secular). As evident from the declaration made on oath by Smt. Sandhya Singh that although she is national party president of the party, however, all the work related with party is being looked-after by her husband Shri Bishwajeet Singh. She was not aware about any activity of the party. Further, vide Q. No. 18 and 19, she was categorically asked regarding details of bank accounts, books of accounts, nature and quantum of the expenditures of the Rashtriya, Samajwadi Party. In reply to the same, she again stated that she is not aware of any details regarding these subjects. She stated that all these things are being handled by her husband Shri Bishwajeet Singh.
iv. It is on record that statement of Shri Bishwajeet Singh, on oath u/s 132(4) of the I.T. Act, was recorded on 07.09.2022. During the statement proceedings, Shri Bishwajeet Singh admitted the fact that on his instance, his wife Smt. Sandhya Singh joined RSP, as president. During the statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. RSP is involved in bogus donations scam across India and founder of party i.e. Shri Surya Nath Chaturvedi carried out bogus donations scam since inception of the party. He further stated that after deducting certain commission donations are being returned to the donors.
v. Furthermore, Shri Bishwajeet Singh stated that these affairs are also being the handled by the Shri Ritesh Shah. Shri Bishwajit Singh submitted list of some bogus entities used for cash generation, which is reproduced by Id PCIT on page number 13 of his order.
vi. During the post search inquiries, statement of Shri Amitkumar Chaturvedi (AHLPC7736R), past president of political party was also recorded, he categorically admitted that the party was engaged in bogus donations scam.
vii. It is relevant to refer to the fact that on verification with the website of regional Chief Electoral Officer where the party is registered i.e. CEO, Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) has not filed any contribution report, since F.Y. 2013-14 onward.
viii. The party been claiming wrong and invalid exemption, over the years under section 13A of the Act but it has also been, mentioning in its Income Tax Return of F.Y. 2018-19 that no contribution report has been filed u/s 29C of the R.P. Act, 1951.
ix. Rashtriya Samajwadi Party (Secular) is not registered, as of today, as informed by Id Counsel for the assessee, with Election Commission of India/R.P. Act, 1951.
(x) There is no retraction of statements given by Smt. Sandhay Singh, Shri Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct and valid.
On analysis of gathered data of the conducted search, it was learnt that these RUPP’s are either not carrying out any sort of genuine political or social activity or they are carrying out such activities to project themselves as genuine parties. However, in reality these political parties are being used as a vehicle of accommodation entries under the garb of political activities. The biggest advantage of creating a façade of a political party to propagate the accommodation entry scam is the fact that the income of political party is completely exempt from taxation as long as conditions laid down in section 13A of the Act, are satisfied. The persons making donations to such organizations, at the same time received back the donations made by them in the form of cash after deduction of certain percentage of commission. By this way, the assessee i.e. the donor becomes eligible for the deduction u/s 80GGC of the Act and evades the income tax liability by claiming 100% deduction on donated amount irrespective of his/her ITR. Further, In the light of disclosures made by Shri Suryanath Chaturvedi the former president and founder member of RSP (Secular), it is an established fact the Rashtriya Samajwadi Party has been formed to carry out bogus donations scam and bogus donation activities are being carried out from the inception of the party. All the party presidents from the inception have admitted that the RUPP is involved in the bogus donation scam. Moreover, Umapati IT Solution is a paper entity and has been used for layering of bogus donation received in the bank accounts of RSP(Secular).
23. From the above facts, it is abundantly clear that donation received by “Rashtriya Samajwadi Party” is bogus. The assessee has claimed deduction under Section 80GGC of the Act, and 80G(5) of the Act, which is also bogus and to that extent Assessment Order passed by assessing officer is erroneous and prejudicial to the interest of Revenue. There is a saying that The ‘tail’ cannot wag the ‘dog’. When there is a fraud, then the details and documents submitted by the assessee, before the assessing officer, during the assessment proceedings, do not assist the assessee in any manner, that is, the assessee cannot take the plea that he has submitted enough documents and details before the assessing officer and assessing officer has taken the plausible view. For that reliance can be placed on the judgment of the Coordinate Bench of ITAT Pune, in the case of Abhishek Ashok Lohade in ITA No.816/PUN/2018, order dated 22.11.2022.
From the above facts and relying on the decision cited above, it is abundantly clear that donation received by “Rashtriya Samajwadi Party” is bogus. The assessee has claimed deduction under Section 80GGC of the Act, which is also bogus and to that extent the assessment order passed by assessing officer in disallowing the deduction claimed by the assessee u/s 80GGC to the tune of Rs.xxxxx/- is upheld.”
11. It is now well settled by the Hon’ble Supreme Court in the cases of CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) that the taxing authorities are not required to put on blinkers while examining a transaction merely because it is supported by documentary evidence. They are entitled to look beyond the apparent, examine the surrounding circumstances, apply the test of human probabilities and ascertain the real nature of the transaction. Where the cumulative facts and attending circumstances establish that the apparent is not the real, the Revenue is justified in drawing an inference based on the preponderance of probabilities. In the present case, the investigation material, established the modus operandi of the recipient political party, supported with findings during physical verification on nonexistence of political party at the given address etc., constitute a complete chain of circumstances which overwhelmingly demonstrate that the impugned donation was merely an accommodation entry and not a genuine contribution eligible for deduction under section 80GGC of the Act.
12. In view of the foregoing discussion, the material brought on record by the Revenue, the findings emerging from the investigation and respectfully following the consistent view taken by the Co-ordinate Benches of this Tribunal in identical matters, we hold that the assessee has failed to establish that the impugned contribution represented a genuine donation eligible for deduction under section 80GGC of the Act. Mere payment through banking channels and production of donation receipt cannot, in the facts of the present case, override the overwhelming evidence demonstrating that the recipient political party was engaged in providing accommodation entries through a systematic layering of funds. The decisions relied upon by the Ld. AR are distinguishable on facts and do not advance the case of the assessee. We, therefore, find no infirmity in the order of the Ld. CIT(A) affirming the disallowance made by the Assessing Officer. Accordingly, the grounds raised by the assessee are dismissed.
13. In the result, the appeal of the assessee is dismissed.
In view of the repeated reference to consequential interest, relevant TaxGuru material on Sections 234A, 234B and 234C is available.
This Order pronounced in Open Court on 22/09/2026
