Nishant Agrawal Vs The ITO (ITAT, Ahmedabad)
Donation Claim Withdrawn, Tax Paid &; No Addition Made—Penalty u/s 270A Cannot Survive on Suspicion Alone
The Political Donation That Invited Reassessment
The Assessee filed his original return for AY 2019-20 after claiming deduction of ₹3 lakh u/s 80GGC towards a donation made to Apna Dal Party, a Registered Unrecognised Political Party. The donation was made through banking channels & was supported by the documents available with the Assessee.
A search & seizure operation was subsequently conducted on 07.09.2022 in the cases of 23 Registered Unrecognised Political Parties in Ahmedabad. The investigation allegedly revealed that certain political parties were accepting donations, facilitating deduction u/s 80GGC or 80GGB & thereafter rerouting the money to donors through cash, RTGS, NEFT or other channels after retaining commission.
Based on information emerging from the search, the Assessee’s case was reopened u/s 147. In response to the notice u/s 148, he filed a return on 18.05.2023, declaring income of ₹23,28,990 after withdrawing the deduction of ₹3 lakh. He also paid self-assessment tax of ₹1,40,500.
No Addition, Yet a 200% Penalty
The AO accepted the income disclosed in the return filed u/s 148 without making any further addition. Nevertheless, the AO observed that the deduction had not been withdrawn voluntarily but only after the Assessee was cornered by the information uncovered during the search on the political parties.
