ITAT Deletes Section 80GGC Disallowance as No Evidence Linked Donation to Accommodation Entry Scheme

Mukesh Somani Vs Assessing Officer (ITAT Jodhpur)

The Jodhpur Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal and deleted the disallowance of ₹1,00,000 made under Section 80GGC of the Income Tax Act, 1961.

The appeal arose from the order of the National Faceless Appeal Centre (NFAC)/CIT(A) dated 05.09.2025 for Assessment Year 2019-20, whereby the deduction claimed by the assessee under Section 80GGC in respect of a donation made to Rashtriya Samajwadi Party (Secular) had been disallowed.

The Tribunal noted that the issue was covered by the decision of the ITAT Raipur Bench in Assistant Commissioner of Income Tax v. Anuj Prakash Gupta [2026] 183 taxmann.com 392. In that case, the Tribunal had held that where deduction under Section 80GGC for donations to a political party was disallowed merely on allegations that the party was providing accommodation entries, such disallowance could not be sustained in the absence of evidence showing that the donation amount had been returned to the assessee or that the assessee had derived any direct benefit from the transaction.

In the present case, the assessee had claimed deduction of ₹1,00,000 under Section 80GGC for a donation made to Rashtriya Samajwadi Party (Secular). Based on information received from the Investigation Wing, Ahmedabad, alleging that the political party was involved in providing bogus accommodation entries through donations, the assessee’s case was reopened under Sections 147 and 148 of the Act. The Assessing Officer thereafter disallowed the deduction claimed under Section 80GGC.

However, the Tribunal observed that the Assessing Officer had not brought any evidence on record to establish that the political party had received commission and repaid the donated amount to the assessee through any backdoor arrangement. Further, no material had been produced to demonstrate any direct nexus between the donation made by the assessee and any benefit allegedly derived by him.

Following the decision of the ITAT Raipur Bench on parity of facts, the Tribunal held that the disallowance lacked evidentiary support. Consequently, the addition of ₹1,00,000 made by the Assessing Officer under Section 80GGC was deleted.

Accordingly, the appeal of the assessee was allowed.

FULL TEXT OF THE ORDER OF ITAT JODHPUR

This appeal by assessee is filed against the order of National Faceless Appeal Centre Delhi [hereinafter referred to as NFAC/ CIT(A)] dated 05.09.2025 with respect to assessment year 2019-20 challenging therein confirmation of the disallowance of Rs. 1,00,000/- u/s 80GGC in respect of donation to Rashtriya Samajwadi Party (Secular).

2. This appeal was heard as a covered matter by the decision delivered by ITAT Raipur Bench in the case of Assistant Commissioner of Income Tax Vs. Anuj Prakash Gupta [2026] 183 taxmann.com 392 (Raipur-Trib.) where the Tribunal has observed that where deduction u/s 80GGC for donation to political party was disallowed merely on alleging accommodation entries, but no evidence show refund of donation or any direct nexus of benefit to assessee, such disallowance was unjustified and liable to be deleted. The relevant para of the judgment reads hereunder:

“At the time of hearing, the assessee himself appeared. The allegation of the Department is that the said political party in which the assessee had made donation was tainted party providing bogus accommodation entries through donations. However, the A.O had not brought out any evidence which suggests that the said political party has derived commission and has paid money back to the assessee through backdoor. Nothing has been brought on record by the A.O to establish the direct nexus regarding benefit derived by the assessee from the said political party while making the said donation.

In view of the aforesaid facts and circumstances, I do not find any infirmity with the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld.”

3. In the present case, assessee has claimed deduction of Rs. 1,00,000/- u/s 80GGC of the Income Tax Act, 1961 for donation given to Rashtriya Samajwadi Party (Secular) based on the information received from investigation wing, Ahmedabad that the said political party was involved in providing accommodation entries of bogus donation. The case of the assessee was reopened u/s 147/148 of the Act, wherein the AO had disallowed the deduction of Rs. 1,00,000/- u/s 80GGC of the Act.

4. The Department allegation was that the said political party to which the assessee had made donation was tainted party providing bogus accommodation entries through donation. However, the AO had not brought on record, any evidence which suggests that the said political party has derived commission and has paid money back to the assessee through backdoor. Thus, nothing has been brought on record by the AO to establish the direct nexus regarding benefit derived by the assessee from the said political party while making the said donation of Rs. 1,00,000/-.

5. Following the ITAT Raipur Bench decision on parity of facts, we delete the addition of Rs. 1,00,000/- made by the AO u/s 80GGC of the Act.

6. In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 02/06/2026.