Abhishek Jayketu Joshi Vs AC CIR-42(2)(1) (ITAT Mumbai)
ITAT Mumbai Quashes Reassessment and Allows Section 80GGC Deduction on Political Donation
The Mumbai Bench of the ITAT allowed the assessee’s appeal for AY 2019-20 and quashed the entire reassessment proceedings, holding that the mandatory procedure under section 148A was violated. Consequently, the disallowance of ₹5,00,000 claimed under section 80GGC towards political donation was also deleted.
The assessee, Abhishek Jayketu Joshi, had claimed deduction under section 80GGC for a donation made by cheque to Kisan Party of India, a political party registered under section 29A of the Representation of the People Act, 1951. Reassessment was initiated based on investigation inputs alleging that certain political parties were used as conduits for providing accommodation entries.
The Tribunal found serious jurisdictional defects in the notice issued under section 148A(b). The show cause notice proceeded on an incorrect factual premise, repeatedly alleging donations to Aadhar Foundation, an entity to which the assessee had admittedly made no payment. This factual error was later acknowledged by the Assessing Officer himself in the order passed under section 148A(d). The ITAT held that once the jurisdictional notice itself is founded on incorrect facts, the assumption of jurisdiction under section 147 is vitiated and cannot be cured by subsequent clarification.
Further, the Tribunal held that the Assessing Officer failed to furnish the material relied upon, including third-party statements recorded under section 132(4), despite specific request by the assessee. Merely referring to the existence of such statements without supplying them was held to be a clear violation of section 148A and principles of natural justice. Relying on the Bombay High Court decision in Anurag Gupta v. ITO, the ITAT held that such failure renders reassessment proceedings unsustainable.
Even on merits, the Tribunal held that the disallowance under section 80GGC could not survive. The assessee had discharged the primary onus by producing:
