Kanal Sanatkumar Raval Vs ITO (ITAT Ahmedabad)
The Ahmedabad ITAT dismissed the assessee’s appeal against the CIT(A), NFAC order dated 24.07.2025 for A.Y. 2019-20, concerning disallowance of ₹1,80,000 claimed as deduction under Section 80GGC of the Income-tax Act, 1961 for a donation allegedly made to Rashtriya Samajwadi Party (Secular).
During assessment, the AO relied on information arising from search and survey proceedings under Sections 132 and 133A, including diaries, loose papers, WhatsApp chats and other material. The investigation indicated that donations were allegedly routed through banking channels and subsequently returned in cash through intermediaries after deduction of commission. A notice under Section 133(6) issued to the political party seeking confirmation of the donation received no response. The AO concluded that the assessee had not established the genuineness of the donation and disallowed ₹1,80,000.
The assessee challenged the disallowance and also raised grounds concerning reassessment proceedings, including approval under Sections 148 and 151, the limitation provision under Section 149(1)(b), unsigned approval, jurisdiction and other procedural issues. The Tribunal, however, focused on the substantive issue of deduction under Section 80GGC.
The Tribunal noted that the identical issue had been considered by its co-ordinate bench in Saurabh Pravinbhai Patel Vs. ITO, ITA No. 1017/Ahd/2023, order dated 30.04.2025. It also noted similar decisions in Mihir Bipinbhai Parekh Vs. DCIT, Milind Pankajbhai Shroff Vs. Pr. CIT-1, Rajkot, Ritesh Sugan Jain Vs. ITO, and Rajen Jayantilal Merchant Vs. ITO.
The Tribunal reproduced material from the decision in Milind Pankajbhai Shroff, including findings concerning the alleged modus operandi of Rashtriya Samajwadi Party (Secular), statements recorded under Section 132(4), bank-account transactions and the use of intermediary entities. It also referred to the Supreme Court decisions in CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) concerning examination of surrounding circumstances and the test of human probabilities.
Applying these principles and relying on the investigation material, statements, bank-trail analysis and findings regarding the recipient political party, the Tribunal held that the assessee failed to establish that the contribution was a genuine donation eligible for deduction under Section 80GGC. It specifically held that payment through banking channels and production of donation receipts could not, in the circumstances recorded, override the material demonstrating the alleged accommodation-entry mechanism.
The Tribunal found no infirmity in the CIT(A)’s order affirming the disallowance. The assessee’s grounds were dismissed and the appeal was dismissed. The order was pronounced in open Court on 13.07.2026.
Cases Discussed
- Mihir Bipinbhai Parekh Vs. DCIT (ITAT), ITA No. 1173/Mum/2026
- Ritesh Sugan Jain Vs. ITO (ITAT), ITA No. 8546/Mum/2025
- Saurabh Pravinbhai Patel Vs. ITO (ITAT Ahmedabad), ITA No. 1017/Ahd/2023, order dated 30.04.2025
- Rajen Jayantilal Merchant Vs. ITO (ITAT), ITA No. 1683/Ahd/2025
- Milind Pankajbhai Shroff Vs. Pr. CIT-1, Rajkot (ITAT), ITA No.93/RJT/2023 dtd 20/05/2024
- Pavankumar M. Sanghvi v. ITO, Wd. 3(1)(2), Baroda [2017] 81 taxmann.com 308
- Pavankumar M. Sanghvi v. ITO [2018] 97 taxmann.com 398/258 Taxman 160 (SC)
- Abhishek Ashok Lohade (ITAT Pune), ITA No.816/PUN/2018, order dated 22.11.2022
- Sumati Dayal v. CIT (SC), (1995) 214 ITR 801 (SC)
- CIT v. Durga Prasad More (SC), (1971) 82 ITR 540 (SC)
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order dated 24.07.2025 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 the following grounds of Appeal:-
“1. Condonation of Delay: – The Appellant prays that any unintentional delay in filing this appeal may be condoned under section 253(5) of the Income Tax Act, 1961, as the delay is due to sufficient cause, substantiated by an affidavit on oath.
2. The Ld. AO has erred in law and on facts by not obtaining prior approval of the competent authority as required under Explanation 2(iv) to Section 148, rendering the reassessment proceedings invalid, particularly when case is reopened based on third party search.
3. The Ld. AO has erred in obtaining approval u/s 151 from the PCIT instead of the PCCIT, despite he himself has invoked Section 149(1)(b) in the 151 approval form. Such approval from an incompetent authority vitiates the reassessment proceedings.
4. The Ld. AO has erred in law and on facts in invoking Section 149(1)(b), despite for matters beyond three years from the end of A.Y. 2019-20 the alleged escapement should exceed ₹50,00,000, which is not fulfilled in present case.
5. The Ld. AO has erred in law and on facts by relying on an unsigned approval u/s 151, in violation of Section 282A and the DSC Policy, 2018. The absence of valid sanction renders the reassessment proceedings void.
6. The Ld. AO has erred in law and on facts in completing the assessment through the NFAC, even though the matter emanates from search-related information, for which jurisdiction is specifically conferred upon the Central Circle. The assessment order passed by an authority lacking such jurisdiction is therefore vitiated in law and liable to be held void ab initio.
7. The Ld. CIT(A) has upheld the decision of Ld. AO by disallowing the deduction of Rs. 1,80,000/- claimed u/s 80GGC, without properly appreciating the evidences and documents furnished by the assessee. The disallowance is unjustified and contrary to the material on record.
8. The Appellant reserves the right to add, alter, amend, or modify any of the grounds of appeal during the course of the appellate proceedings.”
3. Facts of the case are that assessee claimed a deduction of ₹1,80,000/- under section 80G of the Income-tax Act, 1961, in respect of a donation allegedly made to the Rashtriya Samajwadi Party (Secular). During the course of assessment proceedings, the Assessing Officer (AO), relying upon information received from search and survey actions conducted under sections 132 and 133A of the Act at various locations including Maharashtra, Bihar, Uttar Pradesh, NCR and Silvassa, observed that the said donation formed part of a bogus donation racket. The investigation revealed that donors had allegedly made donations through banking channels and subsequently received the donated amounts back, mainly in cash, through intermediaries after deduction of commission ranging from 1.5% to 5%. The AO relied upon various incriminating materials seized during the search proceedings, including diaries, loose papers, WhatsApp chats and other documents recovered from the office bearers and key handlers of the Rashtriya Samajwadi Party (Secular), which allegedly evidenced such cash-back arrangements. Further, a notice under section 133(6) of the Act was issued to the Rashtriya Samajwadi Party (Secular) seeking confirmation of the donation; however, no response was received. The investigation also indicated that the political party and its associated intermediaries were shell entities allegedly engaged in facilitating tax evasion through accommodation entries disguised as political or social welfare contributions. The assessee furnished replies to notices issued under sections 142(1) and 133(6) on 04.09.2024 and 22.10.2024 respectively, and also responded to the show-cause notice dated 08.11.2024. However, according to the AO, the assessee failed to produce satisfactory documentary evidence to establish the genuineness of the donation and the eligibility of the deduction claimed under section 80G of the Act. Accordingly, the Assessing Officer treated the donation as a fictitious transaction and disallowed the deduction of ₹1,80,000/-, and added the same to the total income of the assessee for Assessment Year 2019-20.
4. On careful consideration of the grounds of appeal, 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 5-102018 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.”
5. 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),
6. 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 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.”
7. 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.
8. 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 are dismissed.
9. In the result, the appeal of the assessee is dismissed.
The order pronounced in the open Court on 13.07.2026
