Pareshbhai Savjibhai Khunt Vs ITO (ITAT Rajkot)
Political Donations Through Banking Channels: ITAT Allows Donors’ Appeals Following Precedent
The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) allowed two appeals concerning political donation deductions, following its earlier decision involving donations made through banking channels. The Tribunal found that the Revenue had produced no material distinguishing the applicable precedent.
The appeals concerned political donations of ₹2,20,000 by Pareshbhai Savjibhai Khunt and ₹1,50,000 by Savan Dayalal Ladani. Both assessees challenged appellate orders arising from reassessments under Section 147 of the Income-tax Act, 1961.
Assessees relied on banking trail and absence of cash-back evidence
Before the Tribunal, the assessees’ representative submitted that the dispute was covered by Nihil Nitinbhai Bhuptani, ITA No. 479/RJT/2025, dated 30 October 2025.
He referred to the findings in that decision that the donation had been made through banking channels, the political party’s registration was effective when the donation was made, and there was no instance of the donor receiving cash back.
The Revenue relied on the Assessing Officer’s findings.
Earlier ruling protected donor from political party’s accounting default
The Tribunal reproduced the relevant findings in Nihil Nitinbhai Bhuptani, which had followed the Delhi Tribunal’s decision in Ashish Dubey v. ACIT, ITA No. 222/Del/2020, dated 8 May 2024.
In Ashish Dubey, the donor had produced a donation receipt, the political party’s PAN and registration particulars, confirmation and bank statements supporting the payment.
The tax authorities had questioned the deduction because the political party had not accounted for the donation in its return.
The Delhi Tribunal held that, once the donor established the payment and its acknowledgement through documentary evidence, the political party’s failure to account for the receipt could not, by itself, justify denying the donor’s deduction.
Revenue failed to distinguish precedent
Applying the Rajkot Bench’s earlier decision, the Tribunal found that the issues in the present appeals were covered in favour of the assessees.
It recorded that there was no change in the relevant facts and law and that the Revenue had not produced material contradicting or distinguishing the precedent relied upon.
Accordingly, the Tribunal allowed both appeals, granting relief concerning the disputed political donations of ₹2.20 lakh and ₹1.50 lakh.
Cases Discussed
- Nihil Nitinbhai Bhuptani — ITA No. 479/RJT/2025, ITAT Rajkot, 30.10.2025 — followed.
- Ashish Dubey Vs ACIT — ITA No. 222/Del/2020, ITAT Delhi, 08.05.2024 — relied upon in the earlier Rajkot decision.
FULL TEXT OF THE ITAT RAJKOT JUDGMENT/ORDER
Captioned two appeals filed by the different assessees, pertaining to assessment year (AY) 2019-20, are directed against the separate orders passed under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 14.11.2025 and 19.12.2025 by the National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income Tax (Appeals) [in short ‘Ld.CIT(A)’] which in turn arise out of separate assessment orders passed by the Assessing Officer (in short ‘AO’) u/s. 147 of the Act.
2. At the outset, Ld. Counsel for the assessee argued that in case of assessee Savan Dayalal Ladani vide ITA No. 575/Rjt/2026, for A.Y. 2019-20, the assessee made donation of Rs.1,50,000/- to political party and assessee Pareshbhai Savjibhai Khunt, vide ITA No.842/Rjt/2025, the assessee made donation of Rs.2,20,000/- to the political party. The Ld. Counsel for the assessee submitted that the said issue on political donation is squarely covered in favour of these assessees by the decision of Hon’ble ITAT Rajkot Bench, in the case of Nihil Nitinbhai Bhuptani in ITA No.479/Rjt/2025 for AY 2019-20, vide order dated 30.10.2025, wherein it was held that donation was made through banking channel and there were no instances that the assessee had received cash back from the said political party. When the donation was given, as per assessee, the political party was effective, therefore no addition should be made on account of donation.
3. On the other hand, Ld. DR for the revenue relied on the findings of the Assessing Officer.
4. I have heard, both the parties. I see no reason to take any other view of the matter then the view so taken by the Hon’ble ITAT, Rajkot Bench in the case of Nihil Nitinbhai Bhuptani in ITA No.479/Rjt/2025 for AY 2019-20, vide order dated 30.10.2025. In this order, the Tribunal has inter alia observed as under:
“3. When this appeal was called out for hearing, Ld. Counsel for the assessee invited my contention to the order dated 08.05.2024 passed by the Division Bench of Tribunal in the case of Ashish Dubey vs. ACIT in ITA No. 222/Del/2020 for A.Y. 2015-16, wherein donation made to political party through banking channel and since the certificate of the political party was effective at the time of donation, therefore, addition made by the AO was deleted. The Ld. Counsel for the assessee submitted that present appeal is squarely covered by the aforesaid order of the Tribunal. A copy which was also placed before the Bench.
4. The Ld. DR for the Revenue relied on the orders of the authorities below.
5. I see no reason to take any other view of the matter, then the view so taken by the Division Bench of the Tribunal-Delhi in the case of Ashish Dubey (supra) vide order dated 08.05.2024, in this order, the Tribunal has inter alia observed as follows:
“4. Appreciating the material on record it comes up that at page no. 5 of the paper book assesse has provided a copy of receipt of donation issued by Rashtriya Komi Ekta Party. PAN of Rashtriya Komi Ekta Party is made available at page no. 6, which is similar to one mentioned on the receipt. Further, at page nos. 7 & 8 assessee has provided a copy of letter dated 19.01.2001 from Election Commission of India, which recognizes Rashtriya Komi Ekta Party as a political party registered u/s 29A of the Representation of the People Act, 1951. A copy of ITR of Rashtriya Komi Ekta Party for relevant assessment year 2015-16 is provided at page no. 9. The assessee has also provided a copy of confirmation by way of email dated 19.12.2017 from Rashtriya Komi Ekta Party at page nos. 10 & 11 of the paper book. The extract of assessee’s bank statement, available at pages 12-22 of the paper book, corroborates the fact of donations being made to the said political party by banking channel and corresponds to the details mentioned in the receipt issued by the said political party as made available at page 5 of the paper book. However, this evidence is discredited by the tax authorities below on the basis that the said political party has not shown the donation in its return of income. The order of learned CIT(A) shows that aforesaid evidences were found to substantiate that assessee had paid donation to the registered political party. We are of the considered view that once the assessee had established, on the basis of material evidences, the fact of payment of the donation and the receipt acknowledged to the assessee then the mere fact that the political party on its part has failed to account for the donation received, the assessee as a donor cannot be faulted so as to deny the deduction. Grounds raised are sustained. Appeal of assessee is allowed with consequential effect.”
6. As the issue is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench in the case of Ashish Dubey (supra), the assessee’s facts under consideration is similar to Ashish Dubey(supra) and, there is no change in facts and law and the Revenue is unable to produce any materials to controvert the aforesaid findings of the Co-ordinate Bench in case of Ashish Dubey (supra), therefore, I respectfully following the binding precedent of the Co- ordinate Bench in case of Ashish Dubey (supra) delete the addition made by the assessing officer.
7. In the result, appeal filed by the assessee is allowed.
5. As the issue is squarely covered in favour of the assessee by the decision of the ITAT, Rajkot Bench in the case of Nihil Nitinbhai Bhuptani in ITA No.479/Rjt/2025 for AY 2019-20, and there is no change in facts and law and the revenue is unable to produce any material to controvert the aforesaid findings of the Division Bench (supra). I find no reason to interfere in the said order of the Division Bench. Therefore, respectfully following the binding precedent of the Coordinate Bench (supra), I allow these two appeals of the different assessees.
6. In the result, both appeals (ITA No.842/Rjt/2025 and ITA No.575/Rjt/2026) of the different assessees, are allowed.
Order is pronounced in the open Court Today on 19/10/2026.
