ITAT Ahmedabad Rejects Section 80GGC Deduction for Bogus Political Donation

Dhrumin Dhirenbhai Desai Vs ITO (ITAT Ahmedabad)

Seven-Day Safeguard Saves Reopening; Banking Proof Alone Does Not Establish Genuine Political Donation

Background of the Case

The assessee’s assessment was reopened following information concerning an alleged bogus donation to Rashtriya Samajwadi Party (Secular). The information arose from a search conducted on 7 September 2022 in the cases of registered unrecognised political parties.

The Assessing Officer disallowed the deduction claimed under section 80GGC. The CIT(A) upheld both the reopening and the disallowance.

Before the Tribunal, the assessee challenged the reassessment principally on limitation and also disputed the conclusion that the donation was an accommodation entry.

The order contains an amount discrepancy: the appeal grounds mention ₹2,25,000, while the factual narrative repeatedly refers to ₹22,05,000. This inconsistency should be verified before citing the disputed quantum.

The Limitation Controversy

For AY 2019–20, the ordinary three-year period under section 149(1)(a) ended on 31 March 2023. The alleged escapement was below ₹50 lakh, and the assessee contended that section 149(1)(b) could not support reopening beyond that period.

The notice under section 148A(b) was issued on 29 March 2023. Following the assessee’s request, the deadline for replying was extended to 17 April 2023. No reply was filed.

Both the section 148A(d) order and the fresh section 148 notice were issued on 20 April 2023.

The assessee accepted that the 19 days allowed for replying were excludable under the fifth proviso to section 149, extending limitation to 19 April 2023. He nevertheless argued that the notice issued on 20 April was one day late.

Why the Tribunal Applied the Sixth Proviso

The assessee argued that section 148A(d) independently permitted an order up to 31 May 2023, being one month from the end of the month in which the response period expired. Since this period exceeded seven days, he submitted that the sixth proviso to section 149 did not apply.

The Tribunal rejected that interpretation.

It held that the section 148A(d) timeline must be read with the outer limitation for issuing a section 148 notice under section 149. An independently available period for passing the preliminary order cannot preserve a reopening once the consequential notice becomes time-barred.

After excluding the response period, only two days remained between 17 April and 19 April 2023. The sixth proviso therefore extended the remaining period to seven days, making 24 April 2023 the final date.

Accordingly, the order and notice issued on 20 April 2023 were within limitation.

The Tribunal relied on Shailendra Rai v. ACIT [2026] 187 taxmann.com 14 (Delhi) and BKR Capital (P.) Ltd. v. ITO [2026] 187 taxmann.com 10 (Delhi), as discussed in the order, concerning the combined operation of the fifth and sixth provisos.

Political Donation: Documents Versus Investigation Material

On merits, the assessee argued that the Department had not demonstrated his involvement in the political party’s alleged fraudulent practices or established that the donated amount had been returned to him after deduction of commission.

The Tribunal followed Hira Navinbhai Patel v. ITO, ITA No. 2519/AHD/2026, involving the same recipient party.

The reasoning reproduced from that decision referred to search statements, bank-trail analysis and the party’s established modus operandi. Donations were allegedly received through banking channels, routed through intermediary entities and returned to donors after retaining commission.

The Tribunal also referred, through the precedent, to CIT v. Durga Prasad More, 82 ITR 540, and Sumati Dayal v. CIT, 214 ITR 801, concerning examination of surrounding circumstances and human probabilities.

It held that payment through banking channels and production of donation receipts could not override the adverse investigation material. Finding the present facts identical to the precedent followed, it upheld the section 80GGC disallowance.

The assessee’s appeal was dismissed on both limitation and merits.

Author’s Comments

The sixth proviso provides a minimum remaining window; it does not automatically add seven days to every extended deadline. Here, the Tribunal replaced the two-day balance with seven days counted from expiry of the response period. That distinction is essential when preparing a limitation calculation.

The donation finding also illustrates why banking evidence cannot be examined in isolation. A receipt and bank debit establish the outward payment, but adverse material suggesting a circular movement of funds requires a substantive response.

This ruling must be distinguished from decisions granting relief where the only objection was the political party’s failure to account for an otherwise established donation. An accounting omission and an alleged accommodation-entry arrangement present different evidentiary questions.

At the same time, the present order substantially adopts another decision’s reasoning rather than detailing a separate donor-specific investigation. Practitioners should examine the material actually supplied, its connection with the assessee and the opportunity afforded to rebut it, rather than treating the recipient party’s name as conclusive in every case.

The decision thus combines two distinct lessons: calculate the statutory extensions together, and assess donation genuineness against the complete evidentiary record.

Cases Discussed

• Shailendra Rai v. ACIT, [2026] 187 taxmann.com 14 (Delhi High Court) — Relied upon regarding the combined effect of the fifth and sixth provisos to Section 149 and the seven-day period governing reassessment notices.
• BKR Capital (P.) Ltd. v. ITO, [2026] 187 taxmann.com 10 (Delhi High Court); SLP dismissal reported at [2026] 187 taxmann.com 1077 (Supreme Court) — Relied upon for the reassessment limitation principles following Shailendra Rai.
• Hira Navinbhai Patel v. ITO, ITA No. 2519/AHD/2026 (ITAT Ahmedabad) — Followed concerning disallowance of Section 80GGC deduction in relation to Rashtriya Samajwadi Party (Secular).
• Mukesh Somani, ITA No. 1140/Jodh/2025, order dated 02.06.2026 (ITAT Jodhpur) — Relied upon by the assessee in support of the genuineness of the political donation.
• Anuj Prakash Gupta, ITA No. 11/RPR/2026, order dated 05.02.2026 (ITAT Raipur) — Relied upon by the assessee on merits of the Section 80GGC disallowance.
• Amit Sharma, ITA No. 593/AGR/2025, order dated 19.05.2026 (ITAT Agra) — Relied upon by the assessee concerning computation of the reassessment limitation period.
• Saurabh Pravinbhai Patel v. ITO, ITA No. 1017/AHD/2023, order dated 30.04.2025 (ITAT Ahmedabad) — Discussed in the reproduced precedent regarding investigation material and disallowance of bogus political donations.
• Milind Pankajbhai Shroff v. PCIT, ITA No. 93/RJT/2023, order dated 20.05.2024 (ITAT Rajkot) — Extensively reproduced concerning investigation into the alleged bogus political donation arrangement.
• Mihir Bipinbhai Parekh v. DCIT, ITA No. 1173/Mum/2026 (ITAT Mumbai) — Referred to in the coordinate Bench discussion concerning similar political donation disputes.
• Ritesh Sugan Jain v. ITO, ITA No. 8546/Mum/2025 (ITAT Mumbai) — Referred to among coordinate Bench decisions concerning political donation claims.
• Rajen Jayantilal Merchant v. ITO, ITA No. 1683/Ahd/2025 (ITAT Ahmedabad) — Referred to among decisions involving comparable Section 80GGC disputes.
• Abhishek Ashok Lohade, ITA No. 816/PUN/2018, order dated 22.11.2022 (ITAT Pune) — Cited concerning the effect of fraudulent transactions on the evidentiary value of supporting documentation.
• CIT v. Durga Prasad More, (1971) 82 ITR 540 (Supreme Court) — Relied upon for evaluating the real character of transactions through surrounding circumstances.
• Sumati Dayal v. CIT, (1995) 214 ITR 801 (Supreme Court) — Relied upon for the test of human probabilities in evaluating the genuineness of transactions.

FULL TEXT OF THE ORDER OF ITAT AHMEDABAD

This appeal has been filed by the Assessee against the order dated 07.05.2026 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2019-20.

2. The Assessee has raised following grounds of Appeal:-

“1) Ground 1: The learned CIT (A) has erred in law and on facts in dismissing the jurisdictional ground of appeal against proceedings u/s. 147 of the Act, thereby not quashing the proceedings and as a consequence not annulling the assessment order passed by the AO being void ab initio.

2) Ground 2: The learned CIT (A) has erred in law and on facts in not deleting the disallowance of Rs.2,25,000/- of the claim of deduction u/s. 80GGC of the Act.

3) Ground 3: On the facts and in the circumstances of the case and in law, the learned CIT (A) ought to have quashed the reassessment proceedings, ought to have annulled the order of assessment being void ab initio, and ought to have deleted the disallowance of Rs.2,25,000/-.

4) Ground 4: It is therefore prayed that the orders of the lower authorities may be set aside, proceedings u/s. 147 may be quashed, the assessment under appeal may be annulled and disallowance of Rs.2,25,000/- may be deleted.

5) Ground 5: Your appellant craves leave to add, amend, alter OR withdraw any ground of appeal at the time of hearing.”

3. Brief facts of the case are that, acting upon the information that the Assessee has given a bogus donation amounting to Rs. 22,05,000/- to Rashtriya Samajwadi Party (Secular), the assessment of the Assessee was reopened u/s 147/148 of the Act. The information related to search and seizure action u/s 132 of the Act in the case of Registered Unrecognised Political Parties (hereinafter referred to as the ‘RUPP’) conducted on 07.09.2022. The Rashtriya Samajwadi Party (Secular) was one among the 23 RUPPs covered under the search operation, and the Assessee had claimed donation to Rashtriya Samajwadi Party (Secular) amounting to Rs. 22,05,000/- u/s 80GGC of the Income Tax Act. During assessment proceedings, the Assessing Officer, (hereinafter referred to as “the AO) made an addition of Rs. 22,05,000/-, disallowing the claim of donation made by the Assessee u/s 80GGC of the Act.

3.1 Aggrieved by the Assessment Order, the Assessee preferred an appeal before the Ld. CIT(A), where the Assessee had raised legal grounds of reopening u/s 147/148 of the Act being void on account of limitation and also challenged the addition on merits. The Ld. CIT(A) dismissed the grounds raised by the Assessee and also dismissed the legal grounds on the merits of the addition, thereby upholding the order of the Ld. AO.

3.2 Now, the Assessee is in appeal against the impugned order of the Ld. CIT(A).

4. We have heard Shri K.C. Thaker, Ld. AR for the appellant Assessee and Shri Krishna Kumar, Ld. Senior DR for the Revenue.

5. Shri Thaker, Ld. AR, on the legal grounds, submitted that the notice u/s 148 of the Act dated 20.04.2023 was barred by limitation as it had been issued beyond the period of three years from the end of the Assessment Year in violation of the provisions of Section 149(1)(a) of the Act. It has been submitted that since the amount of escapement of income alleged in the notice is less than Rs. 50,00,000/-, the benefit of Section 149(1)(b) was not available to the Revenue. It was further submitted that notice u/s 148A(b) of the Act was issued in the case on 29.03.2023 seeking reply of the Assessee by 12.04.2023; the time granted to file reply was extended by the AO till 17.04.2023 on the request of the Assessee by the AO vide notice dated 12.04.2023. The Assessee in this case did not file any reply and, therefore, it was submitted that the time allowed for filing reply was liable to be excluded from the computation of time, i.e., 19 days in terms of the fifth proviso to Section 149 of the Act, which expired on 19.04.2023, and the notice u/s 148 having been issued on 20.04.2023 is barred by limitation and, therefore, the same is without jurisdiction and invalid. As regards the provisions of the sixth proviso to Section 149 of the Act, it was submitted by Mr. Thaker that the sixth proviso comes into play only when the time remaining to pass order u/s 148A(d) of the Act is less than 7 days. He further submits that Section 148A(d) of the Act provides for one month from the end of the month in which the reply is received or within one month from the end of the month in which reply was due to be filed. He argues that, the last date of time allowed to the Assessee being 17.04.2023, the period of limitation in terms of Section 148A(d) was expiring only on 31.05.2023, which is not less than 7 days, and, therefore, the sixth proviso to Section 149 of the Act will not have any implication in the facts of the present case. In support of his submissions, the Ld. AR relied upon the order of the Tribunal in the case of Amit Sharma, ITA No. 593/AGR/2025, dated 19.05.2026.

5.1 It has been submitted that the information available with the AO in the present case does not mention the Assessee having been involved in any manner with the fraudulent practices of the said RUPP, i.e., Rashtriya Samajwadi Party (Secular), and, therefore, it cannot be presumed that the Assessee made the donation with a view to escape assessment of income. Hence, notice u/s 148 of the Act issued without having any tangible material regarding the escapement of income will not stand the scrutiny of law and, therefore, is required to be declared void.

5.2 On the merits of the addition, Mr. Thaker, Ld. AR, submitted that the material available even at the stage of passing of the order under law does not show that the donation given by the Assessee was bogus and that he has received back the amount donated after deduction of commission, and, therefore, the AO was not justified in making the addition by disallowing the deduction claimed u/s 80GGC of the Act in the facts of the present case. In support of his proposition, the Ld. AR relied upon the order of the Tribunal in the case of Mukesh Somani, ITA No. 1140/Jodh/2025, dated 02.06.2026, and the order of the Tribunal in the case of Anuj Prakash Gupta, ITA No. 11/RPR/2026, dated 05.02.2026.

6. Per contra, Shri Krishna Kumar, Ld. DR for the Revenue, supported the orders of the authorities below and submitted that the Ld. CIT(A) has passed a reasoned order which requires no interference by the Tribunal.

7. We have given our thoughtful consideration to the submissions made by the parties and perused the materials on record. For the purpose of adjudication, the following important dates are required to be taken note of:

7.1 The plea of notice u/s 148 being time-barred is grossly misconceived and is required to be rejected. Mr. Thaker, Ld. AR, has misconstrued the scope and implication of the provisos to Section 149 of the Act read with Section 148A of the Act. Before proceeding further, it is necessary to have a look at the relevant provisions, i.e., Sections 148A(d), 149 as well as the fifth and sixth provisos to Section 149, which at the relevant time read as under:

“Conducting inquiry, providing opportunity before issue of notice under section 148.

148A. The Assessing Officer shall, before issuing any notice under section 148,—

(a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;

(b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);

(c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b);

(d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires:

Provided …

149. (1) No notice under section 148 shall be issued for the relevant assessment year,—

(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);

(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of—

(i) an asset;

(ii) expenditure in respect of a transaction or in relation to an event or occasion; or

(iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:

Fifth proviso to Section 149:-

Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded:

Sixth proviso to Section 149:-

Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A does not exceed seven days, such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly.”

Emphasis supplied.

8. In the present case, there is no dispute that, in terms of the fifth proviso to Section 149 of the Act, for computing the period of limitation u/s 149, the time or extended time allowed to the Assessee as per the show-cause notice issued u/s 148A(b) is required to be excluded. In the facts of the present case, there is no dispute that notice u/s 148A(b) was issued on 29.03.2023 and the time allowed to file reply by the AO to the Assessee was up to 17.04.2023, i.e., 19 days. The said period is required to be excluded from the computation of limitation. Thus, the limitation in terms of Section 149, which was otherwise coming to an end on 31.03.2023, was extended up to 19.04.2023 by virtue of the exclusion of 19 days from counting of limitation in terms of the fifth proviso to Section 149 of the Act in the facts of the present case. So, the controversy is restricted to the interpretation and implication of the sixth proviso to Section 149 of the Act.

8.1 It has been contended by the Ld. AR that unless the time allowed in terms of Section 148A(d) is less than 7 days, the sixth proviso will have no implication. Ld. AR failed to appreciate that the timeline u/s 148A(d) is subject to the outer limit to issue notice u/s 148 provided under the provisions of Section 149 of the Act. That is to say, when the outer limit to issue Section 148 notice has come to an end, the time limit provided u/s 148A(d) loses its relevance as no matter whatever time is available to pass order u/s 149AB, the consequential notice u/s 148 of the Act cannot be issued on account of it being time barred u/s 149 of the Act. The timeline u/s 148A(d) becomes relevant only when the limitation u/s 149 exceeds the time prescription granted u/s 148A(d) of the Act. In such a case, if the AO passes an order u/s 148A(d) beyond the time prescription of Section 148A(d), the same shall be in violation of the time limit provided u/s 148A(d), and such an order passed by the AO would be in violation of the provisions of Section 148A(d) and, therefore, the same would be without jurisdiction.

8.2 The sixth proviso to Section 149 affects the outer limit of issuance of notice u/s 148 is manifest from the use of words: “and the period of limitation under this sub-section shall be deemed to be extended accordingly”. The use of the words “this sub-section” makes it abundantly clear that the extension of limitation provided under the sixth proviso to Section 149 extends the limitation in terms of Section 149(2), i.e., the limitation for issuance of notice u/s 148 itself. The time limit available u/s 148A(d) of the Act on standalone basis is a static timeline, inasmuch as one month from the end of the month in which reply was received or was due to be received will not change in the factual matrix of any case. The timeline u/s 148A(d) becomes dynamic only when the timeline u/s 148A(d) and Section 149 are read in conjunction. When limitation for issuance of notice u/s 148 as a combined effect of provisions of Section 148A(d) and Section 149 result in remaining period to issue notice u/s 148 to be less than seven days, the same shall be extended to seven days by virtue of sixth proviso to Section 149 of the Act.

8.3 In view of the above deliberations, the relevant timelines for issuance of notice u/s 148 in the facts of the present case would be as under:

8.4 Since the limitation to issue notice u/s 148 of the Act, in the facts of the present case, was going to expire only on 24.04.2023, and the notice u/s 148 having been issued on 20.04.2023 is, therefore, well within limitation in terms of the provisions of Section 149 of the Act. The view taken by us is fortified by the judgment of the Hon’ble Delhi High Court in the case of Shailendra Rai vs. ACIT, reported as [2026] 187 taxmann.com 14 (Delhi), wherein the Hon’ble High Court has held as under:

“22. A combined reading of fifth and sixth proviso to Section 149 suggests that the time between the date of notice under Section 148A(b) i.e. 29.03.2024 and the date on which the petitioner had filed reply i.e. 21.04.2024 (as given under fifth proviso) is to be excluded and then, from that date, a period of 7 days is to be taken as per sixth proviso for the purpose of determining the last date of limitation, by which the AO has to pass the order under Section 148A(d) and issue the notice under Section 148 of the Act of 1961.

23. Accordingly, having received reply on 21.04.2024, the AO had only 7 days at his disposal to pass order under Section 148A(d) of the Act of 1961 and to issue notice under Section 148 of the Act of 1961, whereas he has passed the order under Section 148A(d) of the Act of 1961 and issued notice under Section 148 of the Act of 1961 on 30.04.2024 he has taken 9 days’ time to issue notice under Section 148 of the Act of 1961.

24. The notice under Section 148 was required to be issued within maximum of 7 days from the date, when reply was filed i.e. 21.04.2024. The notice could therefore be issued by 28.04.2024, whereas the same came to be issued on 30.04.2024. The impugned notice dated 30.04.2024 is, thus, barred by limitation.”

8.5 The aforesaid judgment was followed by the Hon’ble Delhi High Court in the case of BKR Capital (P.) Ltd. Vs. Income Tax Officer reported as (2026) 187 taxmann.com 10 (Delhi); and Special Leave Petition against the same was also dismissed by the Hon’ble Supreme Court [[2026] 187 taxmann.com 1077 (SC)].

8.6 In view of the foregoing deliberations, the ground taken by the Assessee regarding the impugned notice u/s 148 of the Act being time barred is dismissed.

9. As regards the merits of addition made by the AO on account of bogus donation made u/s 80GGC of the Act, we find that the Co-ordinate Bench of this Tribunal in the case of Hira Navinbhai Patel vs. ITO rendered in ITA No.2519/AHD/2026 involving the same donee i.e. Rashtriya Samajwadi Party (Secular), observed and held as under:

“6. We have heard the rival submissions and perused the material available on record.

In respect of the claim of Rs.20,00,000/- u/s 80GGC of the Act, the material gathered during the search proceedings revealed that the concerned political party was being used for providing accommodation entries in the guise of political donations. The assessee has failed to effectively rebut the said material or establish the genuineness of the impugned contribution. We further note that the identical issue relating to bogus political donations u/s 80GGC was considered by the Co-ordinate Bench in ITA No.1017/Ahd/2023, vide order dated 30.04.2025, wherein, on the basis of the investigation material, bank trail and modus operandi of the recipient political party, the disallowance u/s 80GGC was upheld.

7. 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),

(iv) Saurabh Pravinbhai Patel Vs. ITO (ITA No. 1017/Ahd/2023).

8. 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 Id 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 I.T. 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 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.”

9. 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, statements recorded under section 132(4), bank trail analysis and the established modus operandi of the recipient political party 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.

10. 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 receipts 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 in this regard are dismissed.”

10. In view of the above, as the facts of the present case are identical to the facts of the above referred case and, therefore, respectfully following the judgment of Co-ordinate Bench of this Tribunal, the grounds taken by the Ld. AR on the merits of the addition are also dismissed.

11. In the result, the appeal of the Assessee is dismissed.

The order pronounced on 12.10.2026.