ANURAG JANU,MUMBAI vs. NATIONAL FACELESS APPEAL CENTRE, DELHI

The assessee has raised the following grounds of appeal before us:

The assessee is an individual and salaried employee of M/s Air India Ltd. For A.Y. 2019-20, the assessee filed the return of income declaring total income of Rs.70,17,060/- and claimed deduction of Rs.5,00,000/- under section 80GGC of the Act in respect of donation made to M/s Rashtriya Samajwadi Party (Secular) through banking channels. The case was subsequently flagged on the Insight Portal on the basis of information received from the Investigation Wing, Ahmedabad, arising from search proceedings conducted on 07.09.2022 in the case of the RUPPs Group of Ahmedabad.

The Ld. AR submitted that the donation of Rs.5,00,000/- was genuine and was made entirely through banking channels. The assessee had furnished the donation receipt, certificate under section 13A and bank statement evidencing the payment. It was contended that the conditions prescribed under section 80GGC stood complied with and that no further condition regarding the political affinity or political activities of the donor is prescribed under the section. The Ld. AR further contended that the material collected during the search proceedings pertained to the political party and other persons and that there was no assessee-specific material showing that any part of the donation had been received back by the assessee in cash. It was submitted that no cash trail, unusual banking transaction or statement specifically naming the assessee 3 as a beneficiary was brought on record. The Ld. AR also challenged the reliance placed upon the test of human probabilities merely because the assessee was a salaried employee and had no demonstrated connection with political activities.

Per contra, the Ld. DR relied upon the orders of the lower authorities. The Ld. DR submitted that the search conducted in the cases of the RUPPs had unearthed incriminating material regarding bogus donation receipts, commission and routing of donations through intermediary entities. The investigation revealed a systematic arrangement whereby donations received through banking channels were routed through layers and returned to the original donors after deduction of commission. The Ld. DR further submitted that the assessee had claimed deduction under section 80GGC and, therefore, the primary onus to establish the bona fides and genuineness of such claim rested upon the assessee. The mere fact that payment was routed through banking channels would not, by itself, establish the genuineness of the transaction when the surrounding circumstances and investigation findings indicated otherwise. The Ld. CIT(A) had specifically recorded that the assessee was required to discharge the onus arising from the Investigation Wing's information concerning the recipient political party.

We have heard the rival submissions and perused the material available on record. The controversy is confined principally to the deduction of Rs.5,00,000/- claimed by the assessee under section 80GGC of the Act. It is undisputed that the payment was made through banking channels. However, the genuineness of a transaction cannot be examined merely from the mode through which the money was transferred, particularly where specific investigation material concerning the recipient establishes circumstances requiring a closer examination of the transaction. The Ld. CIT(A) recorded that the investigation concerning the very same political party disclosed that donations were received through banking channels, routed through intermediary entities and returned to donors after deduction of commission. The statements referred to in the impugned appellate order also recorded admissions concerning the alleged bogus-donation arrangement.

Another relevant circumstance in the present case is the conduct of the assessee. The assessee is a salaried employee of M/s Air India Ltd. and has made a sizeable donation of Rs.5,00,000/- to the said registered unrecognized political party. As recorded by the Ld. CIT(A), there is nothing on record showing any earlier or subsequent contribution by the assessee to any political party. Before us also, no material has been brought on record demonstrating any association, affinity or connection of the assessee with the said political party or its political activities which could explain the surrounding circumstances of this isolated donation. The assessee has made such political donation only during the year under consideration, and no material has been placed before us showing a similar political contribution in the preceding or succeeding years.

We clarify that political affinity or a history of political donations is not, by itself, a statutory condition prescribed under section 80GGC. However, in the peculiar facts of the present case, the absence of any such material is a relevant surrounding circumstance while appreciating the genuineness of the transaction in the light of the specific investigation findings concerning the recipient political party. The claim cannot be tested merely on the existence of a donation receipt and movement of money through banking channels while ignoring the surrounding circumstances brought on record. The Ld. AR relied on the order of Coordinate Bench of ITAT-Mumbai in Abhishek J Joshi vs AC Cir- 42(2)(1), ITA No. 5775/Mum/2025 date of pronouncement 13/01/2026 where the Bench has allowed the appeal of the assessee considering the legal grounds. So, the said order is misplaced for current appeal.

The Ld. CIT(A) has also considered the matter on the touchstone of human probabilities and relied upon the principles enunciated in CIT v. Durga Prasad More reported in (1971) 82 ITR 540 (SC) and Sumati Dayal v. CIT reported in (1995) 214 ITR 801 (SC). The impugned order records that circumstantial material can be taken into account in income-tax proceedings and that the reality of a transaction may be examined having regard to its surrounding circumstances.

Considering the totality of the facts and circumstances, particularly the investigation material relating to the recipient political party, the modus operandi brought on record, the isolated nature of the donation during the year under consideration and the absence of material explaining the assessee's connection or affinity with the recipient political party, we do not find sufficient reason to interfere with the finding of the Ld. CIT(A) sustaining the disallowance of deduction of Rs.5,00,000/- under section 80GGC of the Act.

Accordingly, Ground Nos. 1 to 7 and 9 raised by the assessee are dismissed. Ground No. 8 relating to levy of interest under sections 234A, 234B and 234C is consequential in nature and is accordingly dismissed, subject to correct computation in accordance with law. Ground No. 10 being general in nature requires no separate adjudication.

In the result, the appeal of the assessee bearing ITA No.3087/Mum/2026 is dismissed. Order pronounced in the open court on 10th day of September 2026. Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, िदनांक/Dated: 10/09/2026 Soumili, PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , �ितवादी/ The Respondent. 2. आयकरआयु� CIT 3. 4. िवभागीय�ितिनिध,आय.अपी.अिध.,मुंबई/DR, ITAT, Mumbai गाड�फाइल/Guard file. 5.