JAYESH JAIN,AHMEDABAD vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), AHMEDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL "B” BENCH, AHMEDABAD DR. B.R.R. KUMAR VICE PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER Jayesh Jain 2 Chandroday Apartment, Bhaikakanagar, Thaltej, Ahmedabad-380059, Gujarat [PAN:ADIPJ7605D] …………. Appellant Vs The Deputy Commissioner of Income Tax, Circle-2(1)(1) Ahmedabad AaykarBahwan (Vejalpur), Nr. Sachin Tower, 100ft Ring Road, Anand Nagar-Prahalad Nagar Road, Ahmedabad-380015, Gujarat …………. Respondent Appearance For the Appellant/Assessee Shri Hardik Mehta For the Respondent/Department Shri Abhijit Date Conclusion of hearing 15.06.2026 Pronouncement of order 09.09.2026

O R D E R Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the Order, dated 15/01/2026, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 10/03/2025, passed under Section 147r.w.s 144 read with Section 144B of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’],for the Assessment year 2019-2020. The Assessee has raised following grounds of appeal: 2. 1. The learned CIT(A) erred in law by not considering the fact that the prior approval given by the Hon’ble PCIT u/s 151 of the Act is Assessment Year 2019-2020

invalid and without jurisdiction. 2. The learned Assessing Officer erred in not considering the fact that the notice dated 24 April 2023 u/s 148 of the Act was issued by the Jurisdictional Assessing Officer (JAO), instead of the Faceless Assessing Officer (FAO). Therefore, the issuance of notice is without legal jurisdiction and, therefore, void ab initio, since issued in violation of the provisions of section 144B r.w.s. 151A of the Act.

VI-A, including a deduction of INR.7,00,000/- under Section 80GGC of the Act for donations made to political party - ‘Apna Desh Party’. The aforesaid return was processed as filed and intimation under Section 143(1) of the Act was issued. Subsequently, a search under Section 132 of the Income Tax Act was conducted on ‘Apna Desh Party’. Based on the documents seized during the search, a notice under Section 148A was issued to the Assessee on 28/03/2023. In response to the notice under Section 148, the Assessee filed return of income on 29/05/2023 declaring a total income of INR.1,31,99,120/-. The Learned Assessing Officer passed Assessment Order, under Section 147 read with Sections 144 and 144B of the Act determining the total income of the Assessee at INR.1,38,99,120/- disallowing the deduction of INR.7,00,000 claimed under Section 80GGC.

Ground No. 1 6. By way of Ground No. 1, the Assessee has challenged the validity of the reassessment proceedings contending that prior-approval granted by the Learned PCIT under Section 151 of the Act is invalid and without jurisdiction. The case of the Assessee is that the aforesaid approval should have been granted by higher authority in terms of Section 151(ii) of the Act (as amended by the Finance Act, 2021) for the reason that the reassessment proceedings have been imitated after the expiry of 3 years from the end of the relevant previous year. According, to the Learned Authorised Representative for the Assessee, in the present case the prior approval should have been granted by the Principal Chief

Commissioner of Income Tax (PCCIT) or the Principal Director General of Income Tax (PDGIT).

Ground No. 2 9. Ground No. 2 raised by the Assessee challenges the validity of the reassessment proceedings on the ground that the notice under Section 148 of the Act was issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO). We note that Section

147A has been inserted by way of the Finance Act, 2026 with effect retrospective effect from 01/04/2021 and the same validates reassessment notices issued by JAO (even after the notification of the faceless reassessment scheme). In the present case the notice under Section 148 of the Act has been issued after 01/04/2021 and therefore, provisions of Section 147A of the Act would get attracted. As a result, Ground No. 2 raised by the Assessee is dismissed.

Ground No. 3 10. By way of Ground No. 3 the Assessee has contended that the Assessment Order was required to be passed on or before 31/03/2024 and therefore, the Assessment Order, dated 10/03/2025, is barred by limitation. It was contended on behalf of the Assessee that even if the notice issued under Section 148 of the Act (issued and served on 24/04/2023) is considered to be valid, the date of issuance and service of the said notice shall be deemed to be 31/03/2023 (i.e., within three years from the end of the relevant Assessment Year 2019-2020). Consequently, as per the provisions of Section 153(2) of the Act, the Assessing Officer had tile till 31/03/2024, for completing the assessment initiated under Section 147 of the Act [being twelve months from the end of the Financial Year in which the notice issued under Section 148 of the Act was deemed to be served (i.e. 31/03/2024)]. We do not find any merit in the aforesaid contention advanced on behalf of the Assessee. It is admitted position that notice under Section 148 of the Act was served on 24/04/2023. We note that the time period for completion of assessment is governed by Section 153(2) of the Act which clearly gives time of 12 months from the end of the financial year in which notice under Section 148 of the Act notice is served. Therefore, the Assessing Officer had time till 31/03/2025 to pass the Assessment Order. Since the Assessment Order has been passed on 10/03/2025, it is not barred by limitation. Accordingly, Ground No. 3 raised by the Assessee is also dismissed.

Ground No. 4 to 7 11. As regards Ground No. 4 to 7 raised by the Assessee challenging the additions that the disallowance made by the Assessing Officer under section 80GGC of the Act on merits is concerned, we find that the identical issues had come up for consideration before the Tribunal in the case of (a) Mihir Bipinbhai Parekh DCIT 1173/MUM/2026),, (b) Milind Pankajbhai Shroff Vs. Pr. CIT-1, Rajkot (ITA No.93/RJT/2023), (c) Ritesh Sugan Jain Vs. ITO (ITA No. 8546/MUM/2025), and (d) Rajen Jayantilal Merchant Vs. ITO (ITA No. 1683/AHD/2025). We note that in all the aforesaid cases the Tribunal dismissed the appeal preferred by the assessee challenging the order passed by Learned CIT(A) upholding the decision of the assessing officer making disallowance of deduction claimed by the assessee under section 80GGC of the Act in respect of similar donations made political parties which were subjected to search action. Contentions identical to those raised by the Assessee in the present case were rejected by the Tribunal. The decisions relied upon by the Learned Authorised Representative for the Assessee are distinguishable on facts and do not advance the case of the Assessee. Mere payment through banking channels and production of donation receipts cannot override the fact that overwhelming evidence was found which showed that the political party was engaged in providing accommodation entries. After considering the material brought on record by the Revenue, the findings emerging from the investigation and respectfully following the consistent view taken by the Co-ordinate Benches of this Tribunal in above/identical matters, the Tribunal dismissed appeal similar ground raised by the Assessee in the case of Kanal Sanatkumar Raval, Ahmedabad vs ITO, Ward-1(2)(1), Ahmedabad (ITA No. 2155/AHD/2025). The relevant extract of the aforesaid decision of the Tribunal reads as under:

“6. Ld. Counsel appearing for the assessee filed same set of documents filed before the Assessing Officer and reiterated its submissions. Nothing new documents or evidences filed before us to deviate from

the findings of the Lower Authorities. The Ld AO has clearly brought out facts that bank accounts of above political parties have been used by the accommodation entry provider, where the donation received by cheques were layered through various bank accounts and ultimately cash was returned back. The same is not disputed by the assessee with relevant materials. Further the Ld AO made a detailed enquiry of RSP and its Bank accounts and transfer of funds to one Shri Mukesh Mehta proprietor of two firms and he transferred it to Waheguru Enterprise and Sapan Traders, which is clearly a systematic financial maneuver to legitimate illicit moneys and evade taxes. In the absence of any fresh materials in support of the assessee's claim. The Grounds raised by the assessee is devoid of merits and liable to be dismissed." 5. We also find that similar issue stands adjudicated by the Co- ordinate benches of this Tribunal in the cases of :- (i) Mihir Bipinbhai Parekh DCIT 1173/Mum/2026), (ii) Milind Pankajbhai Shroff Vs. Pr. CIT-1, Rajkot (ITA No.93/RJT/2023), Ritesh Sugan Jain Vs. ITO (ITA No. 8546/Mum/2025), (iii) Rajen Jayantilal Merchant ITO 1683/Ahd/2025), 6. For the sake of ready reference, the detailed adjudication in the case of Milind Pankajbhai Shroff, vs The Pr. CIT 1, Rajkot in ITA No.93/RJT/2023 dtd 20/05/2024 is reproduced as under :- "22. Now, we shall also adjudicate the other arguments advanced by Id. DR for the revenue to the effect that "fraud vitiates everything". In this connection, at the cost of repetition, we reiterate the findings of Id PCIT, which are as follows: (i) Rashtriya Samajwadi Party (Secular) is a Registered Unrecognized Political Party and it is one of the 23 RUPPs covered in the RUPPs Group of Ahmedabad. This party was established on 21.10.2008 and its registered address as per its website is Samruddhi Complex, Opp- Sakar-3, Income Tax Circle, Ahmedabad. However, during pre-search enquiry, no party office is found at the aforesaid address. (ii) The modus-operandi of this political party is that the donation is received through cheque in the bank account of the party and then routed through intermediary(ies) (which is generally shell entity(ies) controlled by either the persons running the party or by any other person) in the garb of various

purchases or other payments, which are found to be bogus in nature. It is pertinent to mention here that the political party doesn't pay any tax since it is exempt u/s 13A of the Act. (iii) During the search proceedings, on 07.09.2022, statement on oath u/s 132(4) of the I.T. Act, was recorded of Smt. Sandhya Singh, National Party President of the Rashtriya Samajwadi Party (Secular). As evident from the declaration made on oath by Smt. Sandhya Singh that although she is national party president of the party, however, all the work related with party is being looked-after by her husband Shri Bishwajeet Singh. She was not aware about any activity of the party. Further, vide Q. No. 18 and 19, she was categorically asked regarding details of bank accounts, books of accounts, nature and quantum of the expenditures of the Rashtriya, Samajwadi Party. In reply to the same, she again stated that she is not aware of any details regarding these subjects. She stated that all these things are being handled by her husband Shri Bishwajeet Singh. (iv) It is on record that statement of Shri Bishwajeet Singh, on oath u/s 132(4) of the I.T. Act, was recorded on 07.09.2022. During the statement proceedings, Shri Bishwajeet Singh admitted the fact that on his instance, his wife Smt. Sandhya Singh joined RSP, as president. During the statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. RSP is involved in bogus donations scam across India and founder of party i.e. Shri Surya Nath Chaturvedi carried out bogus donations scam since inception of the party. He further stated that after deducting certain commission donations are being returned to the donors. (v) Furthermore, Shri Bishwajeet Singh stated that these affairs are also being the handled by the Shri Ritesh Shah. Shri Bishwajit Singh submitted list of some bogus entities used for cash generation, which is reproduced by Id PCIT on page number 13 of his order. (vi) During the post search inquiries, statement of Shri Amitkumar Chaturvedi (AHLPC7736R), past president of political party was also recorded, he categorically admitted that the party was engaged in bogus donations scam. (vii) It is relevant to refer to the fact that on verification with the website of regional Chief Electoral Officer

where the party is registered i.e. CEO, Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) has not filed any contribution report, since F.Y. 2013-14 onward. (viii) The party been claiming wrong and invalid exemption, over the years under section 13A of the I.T. Act but it has also been, mentioning in its Income Tax Return of F.Y. 2018-19 that no contribution report has been filed u/s 29C of the R.P. Act, 1951. (ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as informed by Id Counsel for the assessee, with Election Commission of India/R.P. Act, 1951. (x) There is no retraction of statements given by Smt. Sandhay Singh, Shri Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct and valid. On analysis of gathered data of the conducted search, it was learnt that these RUPP's are either not carrying out any sort of genuine political or social activity or they are carrying out such activities to project themselves as genuine parties. However, in reality these political parties are being used as a vehicle of accommodation entries under the garb of political activities. The biggest advantage of creating a façade of a political party to propagate the accommodation entry scam is the fact that the income of political party is completely exempt from taxation as long as conditions laid down in section 13A of the Act, are satisfied. The persons making donations to such organizations, at the same time received back the donations made by them in the form of cash after deduction of certain percentage of commission. By this way, the assessee i.e. the donor becomes eligible for the deduction u/s 80GGC of the Act and evades the income tax liability by claiming 100% deduction on donated amount irrespective of his/her ITR. Further, In the light of disclosures made by Shri Suryanath Chaturvedi the former president and founder member of RSP (Secular), it is an established fact the Rashtriya Samajwadi Party has been formed to carry out bogus donations scam and bogus donation activities are being carried out from the inception of the party. All the party presidents from the inception have admitted that the RUPP is involved in the bogus donation scam. Moreover, Umapati IT Solution is a paper entity and has been used for layering of bogus donation received in the bank accounts of RSP(Secular). 23. From the above facts, it is abundantly clear that donation received by "Rashtriya Samajwadi Party" is bogus. The assessee has claimed deduction under Section 80GGC of the Act, and 80G(5) of the Act, which is also bogus and to that

extent Assessment Order passed by assessing officer is erroneous and prejudicial to the interest of Revenue. There is a saying that The 'tail' cannot wag the 'dog'. When there is a fraud, then the details and documents submitted by the assessee, before the assessing officer, during the assessment proceedings, do not assist the assessee in any manner, that is, the assessee cannot take the plea that he has submitted enough documents and details before the assessing officer and assessing officer has taken the plausible view. For that reliance can be placed on the judgment of the Coordinate Bench of ITAT Pune, in the case of Abhishek Ashok Lohade in From the above facts and relying on the decision cited above, it is abundantly clear that donation received by "Rashtriya Samajwadi Party" is bogus. The assessee has claimed deduction under Section 80GGC of the Act, which is also bogus and to that extent the assessment order passed by assessing officer in disallowing the deduction claimed by the assessee u/s 80GGC to the tune of Rs.xxxxx/- is upheld." 7. It is now well settled by the Hon'ble Supreme Court in the cases of CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) that the taxing authorities are not required to put on blinkers while examining a transaction merely because it is supported by documentary evidence. They are entitled to look beyond the apparent, examine the surrounding circumstances, apply the test of human probabilities and ascertain the real nature of the transaction. Where the cumulative facts and attending circumstances establish that the apparent is not the real, the Revenue is justified in drawing an inference based on the preponderance of probabilities. In the present case, the investigation material, statements recorded under section 132(4), bank trail analysis and the established modus operandi of the recipient political party constitute a complete chain of circumstances which overwhelmingly demonstrate that the impugned donation was merely an accommodation entry and not a genuine contribution eligible for deduction under section 80GGC of the Act. 8. In view of the foregoing discussion, the material brought on record by the Revenue, the findings emerging from the investigation and respectfully following the consistent view taken by the Co-ordinate Benches of this Tribunal in identical matters, we hold that the assessee has failed to establish that the impugned contribution represented a genuine donation eligible for deduction under section 80GGC of the Act. Mere payment through banking channels and production of donation receipts cannot, in the facts of the present case, override the overwhelming evidence demonstrating that the recipient political party was engaged in providing accommodation entries through a systematic layering of funds. The decisions relied upon by the Ld. AR are distinguishable on facts and do not advance the case of the assessee. We, therefore, find no infirmity in the order of the

Ld. CIT(A) affirming the disallowance made by the Assessing Officer. Accordingly, the grounds raised by the assessee are dismissed. 9. In the result, the appeal of the assessee is dismissed.” (Emphasis Supplied) 12. In the facts and circumstances of the present case, we find no reason to depart from the consistent view taken by the Tribunal in identical cases. In the present case also the Assessee had failed to establish that the donation made to political party represented a genuine donation eligible for deduction under section 80GGC of the Act. On the other hand, the findings of the authorities below are supported by the material found during search.

The order is pronounced on 09.09.2026 (Dr. B.R.R. Kumar) Judicial Member

िदनांकDated :09.09.2026 अहमदाबाद Ahmedabad; H.C. PS

आदेशक""ितिलिपअ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ"/ The Appellant 2. ""यथ"/ The Respondent. 3. संबंिधतआयकरआयु"/ Concerned CIT 4. आयकरआयु"(अपील) / The CIT(A) 5. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण/ DR, ITAT, 6. गाड"फाईल /Guard file. आदेशानुसार/BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.