Dixit Laxmanbhai Faldu Vs ITO (ITAT Rajkot)
Political Party’s Accounting Failure Cannot Defeat a Proven Donation: ₹10 Lakh Section 80GGC Disallowance Deleted
The Legal Principle
The Rajkot Tribunal held that a donor cannot be denied deduction merely because the recipient political party failed to account for the donation, where the contribution and its acknowledgment are established through supporting evidence.
Following its coordinate Bench decision in Nikhil Nitinbhai Bhuptani, the Tribunal deleted the ₹10 lakh disallowance under section 80GGC relating to a donation to Akhil Bhartiya Lokadhikar Party.
The principle is precise: the recipient’s accounting omission does not, by itself, invalidate a contribution otherwise proved by the donor.
Background of the Dispute
The assessee claimed deduction of ₹10,00,000 under section 80GGC for a donation made to Akhil Bhartiya Lokadhikar Party during the year relevant to Assessment Year 2024–25.
The Assessing Officer disallowed the claim in an assessment under section 143(3) dated 24 February 2026. The CIT(A), through the National Faceless Appeal Centre, confirmed the disallowance by an order dated 30 June 2026.
The assessee approached the Tribunal, contending that the deduction had been wrongly denied.
The present order is brief. It does not independently reproduce the complete assessment findings or describe every document furnished concerning this particular donation. Instead, the Tribunal resolved the controversy by following an earlier decision after finding the facts similar.
Earlier Rajkot Decision Covered the Issue
At the hearing, the assessee’s authorised representative relied on Nikhil Nitinbhai Bhuptani, ITA No. 479/Rjt/2025, AY 2019–20, decided on 30 October 2025.
Counsel submitted that the earlier decision had accepted a political-donation deduction where the contribution was made through banking channels and the political party’s registration was effective when the donation was made.
The Departmental Representative supported the Assessing Officer’s findings.
The Tribunal found no reason to take a different view and reproduced the earlier decision’s reasoning on proof of payment and the consequences of non-accounting by the recipient.
Documentary Evidence Supported the Adopted Precedent
The reproduced precedent concerned a donation to Rashtriya Komi Ekta Party, which must be distinguished from the recipient in the present case, Akhil Bhartiya Lokadhikar Party.
In that precedent, the evidence included a donation receipt, the political party’s PAN and an Election Commission letter establishing registration under section 29A of the Representation of the People Act, 1951.
An email confirmation from the political party and the donor’s bank statement were also available. The banking entries corroborated payment and corresponded with the particulars appearing in the receipt.
Thus, payment, recipient identity, registration and acknowledgment were supported by consistent material.
These detailed particulars belong to the precedent quoted in the order. The Tribunal applied its reasoning to the present appeal on the express finding that the facts were similar.
Recipient’s Omission Did Not Disprove Payment
In the adopted precedent, the tax authorities had discredited the evidence because the political party had not shown the donation in its return of income.
However, the documents established that the donor paid the contribution to the registered political party and that receipt was acknowledged.
The Tribunal held that, once those facts were proved, the donor could not be faulted solely for the political party’s failure to account for the amount received.
The omission in the recipient’s reporting therefore did not automatically negate the donor’s banking records, receipt and confirmation.
This was the substantive reasoning followed in granting relief to Dixit Laxmanbhai Faldu.
Revenue Showed No Basis for Departing From Precedent
The Tribunal recorded that the facts were similar to Nikhil Nitinbhai Bhuptani and that there was no relevant change in facts or law.
It further observed that the Revenue had produced no material warranting a different conclusion.
Respectfully following the coordinate Bench decision, the Tribunal deleted the ₹10 lakh addition arising from disallowance of the section 80GGC deduction and allowed the appeal.
The relief was granted outright. There was no remand for further verification.
Author’s Comments
A donor’s tax claim cannot be made entirely dependent on the recipient’s accounting discipline. When the contribution is established by reliable evidence, a reporting lapse by the political party requires more than an automatic disallowance in the donor’s hands.
The supporting evidence remains important. The precedent adopted here relied on several mutually consistent documents; it did not treat a bank transfer alone as conclusive proof of every aspect of the claim.
Equally, the decision should not be presented as granting blanket protection to all political donations. A case involving evidence of a fictitious contribution, money returned to the donor or documents disproved through enquiry would raise different questions.
The useful proposition is narrower: non-accounting by the political party alone cannot defeat an otherwise established donation. The Tribunal’s acceptance of factual similarity and the Revenue’s failure to produce distinguishing material were central to the result.
Cases Discussed
- Nikhil Nitinbhai Bhuptani Vs ITO (ITAT Rajkot)– ITA No. 479/Rjt/2025; Assessment Year 2019-20; Order dated 30/10/2025.
FULL TEXT OF THE ORIGINAL ORDER OF ITAT RAJKOT
Captioned appeal filed by the Assessee, pertaining to assessment year (AY) 2024-25, is directed against the order under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Appeal Centre (NAC) Delhi/Commissioner of Income-tax (Appeals) [in short ‘NFAC/Ld.CIT(A)’], dated 30.06.2026, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Act, dated 24.02.2026.
2. Grounds of appeal raised by the assessee are as follows:
“The Ld. CIT(A) erred in confirming the disallowance of deduction claimed u/s 80GGC of the Act of Rs. 10,00,000/-being donation given to the Akhil Bhartiya Lokadhikar Party. The disallowance may kindly be deleted.”
3. When the appeal was called out for hearing, Ld. Counsel for the assessee invited my attention that the issue is squarely covered in favour of the assessee by the decision of the ITAT Rajkot, in the case of Nikhil Nitinbhai Bhuptani, in ITA No.479/Rjt/2025, for AY 2019-20, order dated 30.10.2025 and stated that the issue under consideration relating to political donation is squarely covered by the said judgment, wherein the Tribunal held that donation was made to Political Parties 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 by the Tribunal.
4. On the other hand, Ld. DR for the revenue relied on the findings of the Assessing Officer.
5. 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 ITAT Rajkot Bench in the case of Nikhil Nitinbhai Bhuptani (supra) vide order dated 30.10.2025, 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 ITAT Rajkot Bench in the case of Nikhil Nitinbhai Bhuptani (supra), the assessee’s facts under consideration is similar to Nikhil Nitinbhai Bhuptani (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 ITAT Rajkot Bench in case of Nikhil Nitinbhai Bhuptani (supra), therefore, I respectfully following the binding precedent of the ITAT Rajkot Bench, delete the addition made by the assessing officer.
7. In the result, the appeal of the assessee is allowed.
Order is pronounced in the open Court Today on 09/10/2026.
