Tushar Vipinchandra Shukla Vs ITO (ITAT Ahmedabad)
Political donation and deduction under section 80GGC – reopening, borrowed satisfaction and violation of natural justice
Summary: In Income Tax Appellate Tribunal, Ahmedabad, the Tribunal examined the validity of reassessment proceedings and disallowance of political donation deduction under section 80GGC for A.Y. 2019-20. The reassessment was initiated based on Investigation Wing inputs arising from a search on Ahmedabad-based registered unrecognised political parties. The Tribunal upheld the reopening under sections 147/148A with sanction under section 151, holding that the Assessing Officer acted within the scope of the show cause notice and that objections on borrowed satisfaction, change in quantum, and invalid sanction were untenable at the reopening stage. However, on merits, the Tribunal found that the Assessing Officer had mechanically relied on unverified third-party statements without furnishing copies or granting cross-examination, despite the assessee producing donation receipts, bank statements, and party registration details. The disallowance was held to violate principles of natural justice and reflect borrowed satisfaction. Consequently, the section 80GGC disallowance was set aside and the matter remanded for fresh adjudication with due opportunity of hearing. The appeal was partly allowed for statistical purposes.
Core Issue Whether:
1. Reopening of assessment under sections 147 / 148A, based on Investigation Wing inputs, with sanction u/s 151, was valid in law; and
2. Disallowance of deduction u/s 80GGC for political donations could be sustained when the addition was made solely on the basis of unverified third-party statements, without furnishing copies or granting cross-examination, thereby violating the principles of Audi Alteram Partem and amounting to borrowed satisfaction.
Facts of the Case The assessee, an individual, filed his return of income for A.Y. 2019-20 declaring total income of ₹36,07,440.He claimed deduction u/s 80GGC for political donations aggregating to ₹10,00,000, made through banking channels.
