MANOJ KUMAR JAGETIA,BHILWARA vs. INCOME TAX OFFICER, WARD-1, BHILWARA

आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM:

This appeal by the assessee is directed against the order dated 24.09.2025 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, [hereinafter referred to as "the CIT(A)"]under section 250 of the Income-tax Act, 1961[hereinafter referred to as "the Act"] for the

2 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia assessment year 2019-20. The learned CIT(A) dismissed the appeal of the assessee and upheld the reassessment order dated 07.01.2025 passed under section 147 read with section 144B of the Act.

On the facts and circumstances of the case and in law, 1. The Ld. CIT(A) erred in upholding the reassessment initiated u/s 147, as it was based solely on third-party search information in the case of other persons and lacked any independent application of mind or objective satisfaction by the AO; consequently, the reopening is legally infirm, invalid, and liable to be quashed. 2. The Ld. CIT(A) failed to appreciate that the AO neither provided the statements or documents relied upon from the search proceedings nor granted any opportunity for cross-examination of the alleged third-party statements, amounting to a gross violation of the principles of natural justice and thereby rendering the addition bad in law. 3. The Ld. CIT(A) erred in confirming the disallowance of the deduction u/s 80GGC of Rs.3,00,000/- despite the appellant having substantiated the donation through proper banking channels and supporting receipts from the political party, and without the Department bringing any material evidence on record to establish that the said amount was ever returned to the appellant. 4. The Ld. CIT(A) erred in upholding the addition of Rs.2,85,000/- u/s 69A solely on the basis of an alleged generic modus operandi attributed to certain RUPP entities, without producing any direct evidence that the appellant received back any cash or was found in possession of unexplained money. The burden of proof under section 69A was not discharged by the Revenue.

3 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia 5. The Ld. CIT(A) erred in mechanically relying on generalized investigation findings and alleged third-party confessions recorded u/s 132(4) in the case of political party operatives, and in incorrectly applying them to the appellant without any specific corroborative linkage. 6. The Ld. CIT(A) erred in relying on judgments not applicable to the facts of the present case while ignoring binding judicial precedents supporting the allowability of deduction u/s 80GGC where donations are made through verifiable banking channels. 7. The order of the Ld. CIT(A) is bad in law, contrary to facts, arbitrary and unsustainable, and the additions confirmed therein deserve to be deleted in full. The appellant craves leave to add, amend, alter or withdraw any of the above grounds at the time of hearing. Facts of the Case

4 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia alleged exit providers. Rashtriya Samajwadi Party (Secular), PAN AAAAR7090L, was stated to be one of the registered unrecognized political parties covered in the search. 5. The Assessing Officer recorded that documents relating to donation receipts, diaries containing details of commission, loose papers and WhatsApp chats found in the mobile phones of the office-bearers and alleged handlers of the political parties were seized during the search. Statements of certain office-bearers were also recorded under section 132(4) of the Act. According to the information received by the Assessing Officer, these political parties were accepting donations through cheque, RTGS or NEFT, routing the money through intermediary entities and returning the amount to the donors in cash after deducting commission ranging from 3.5% to 5%. 6. The information received by the Assessing Officer indicated that the assessee had made a political contribution of Rs.3,00,000/- to Rashtriya Samajwadi Party (Secular) during the financial year 2018-19 and had claimed deduction of the said amount under section 80GGC of the Act. 7. On the basis of the said information, proceedings under section 148A of the Act were initiated. After passing an order under section 148A(d) and obtaining the prescribed approval, a notice under section 148 was issued on 10.04.2023. In response, the assessee filed his return of income on 09.05.2023 declaring

5 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia the same total income of Rs.17,26,020/-.A notice under section 143(2) was issued on 22.05.2024. In response, the assessee furnished a reply on 17.06.2024 along with, inter alia, the computation of total income, details of bank accounts, Form No.16, bank statement, proof of payment of life insurance premium, invoice relating to mediclaim and preventive health check-up, donation receipt and the relevant bank entry evidencing payment of the donation.A further notice under section 142(1) was issued on 06.08.2024. The assessee filed a reply on 21.08.2024 and furnished the documents called for by the Assessing Officer. A final show-cause notice was issued on 21.11.2024, to which the assessee responded on 28.11.2024. On the request of the assessee, an opportunity of hearing through video conference was also provided, and the assessee filed a further response on 13.12.2024. 8. The assessee submitted before the Assessing Officer that the donation of Rs.3,00,000/- was genuine and had been made through an official banking channel. The assessee furnished the bank statement evidencing the payment and the receipt issued by Rashtriya Samajwadi Party (Secular). It was contended that the source of the contribution was fully explained and that the conditions prescribed under section 80GGC of the Act stood satisfied. The assessee denied having received the donation amount or any part thereof in cash. It was contended that the conclusion regarding the receipt of Rs.2,85,000/- in cash had

6 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia been drawn without any direct evidence. The assessee requested the Assessing Officer to furnish the evidence allegedly establishing repayment of cash to him. The assessee further submitted that the proposed additions were based upon statements of third parties and material found during a search conducted in their cases. The relied-upon statements and documents were not furnished to the assessee, nor was an opportunity to cross-examine the persons whose statements were proposed to be used against him provided. The assessee contended that a general allegation against the political party could not establish that the particular contribution made by him was an accommodation entry. 9. The Assessing Officer did not accept the explanation of the assessee. He observed that the material collected during the search and the statements of the office-bearers established that Rashtriya Samajwadi Party (Secular) was engaged in accepting donations through banking channels and returning the amounts to the donors in cash after deducting commission. 10. The Assessing Officer observed that the assessee had not produced any evidence regarding the political activities of the recipient party or explained the reason for making the contribution to a party which allegedly had no political presence and had not complied with the requirements of the Election Commission of India. The Assessing Officer concluded that the

7 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia assessee had knowingly entered into a transaction with the political party for obtaining a deduction under section 80GGC.

Particulars Amount Income returned under section 139(1) Rs.17,26,020/- Income returned in response to notice under section 148 Rs.17,26,020/- Disallowance under section 80GGC Rs.3,00,000/- Addition under section 69A Rs.2,85,000/- Disallowance under section 80D Rs.2,050/- Total assessed income Rs.23,13,070/-

8 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia validity of the reopening, the disallowance under section 80GGC and the addition under section 69A. 14. The assessee reiterated that the reopening was based upon third-party information without independent application of mind by the Assessing Officer. On the merits, the assessee submitted that the donation was made to a registered political party through a banking channel and was supported by a donation receipt. It was contended that the wrongdoing of the recipient, if any, could not result in denial of the deduction to a donor who had fulfilled the statutory conditions. The assessee further submitted that no material had been produced to establish repayment of the donation in cash. The allegation of repayment was based entirely on statements of third parties which were not furnished to the assessee and in respect of which no opportunity of cross- examination had been provided. 15. The learned CIT(A) upheld the validity of the reassessment proceedings. It was held that specific information had been received pursuant to the search conducted in the cases of the RUPP group and that the assessee’s name appeared in the list of beneficiaries. The learned CIT(A) observed that the Assessing Officer had verified the return of income and found that the assessee had claimed deduction under section 80GGC in respect of the contribution referred to in the information. The reopening was, therefore, held to be based upon tangible material and independent satisfaction.

9 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia 16. On the merits, the learned CIT(A) held that Rashtriya Samajwadi Party (Secular) was engaged in providing accommodation entries by accepting donations through banking channels and returning the money to donors in cash after deducting commission. According to the learned CIT(A), the statements of the office-bearers, diaries, WhatsApp chats and analysis of the bank accounts corroborated the modus operandi. The learned CIT(A) held that the assessee had not demonstrated that his contribution was an exception to the general practice followed by the political party. The learned CIT(A), therefore, confirmed the disallowance of Rs.3,00,000/- under section 80GGC. 17. The learned CIT(A) further held that the seized material and statements established that the donations were returned to the donors in cash. The assessee had failed to rebut the evidence by producing any contrary material. Reference was also made to the presumptions under sections 132(4A) and 292C of the Act. The addition of Rs.2,85,000/- under section 69A was accordingly sustained. The disallowance of Rs.2,050/- under section 80D was also confirmed on the ground that the assessee had not furnished any evidence in excess of the invoice for Rs.5,450/-. Consequently, the appeal was dismissed. 18. Before us, the learned Authorised Representative (AR) reiterated the facts and submitted that the assessee had discharged the burden cast upon him under section 80GGC. The

10 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia contribution of Rs.3,00,000/- was made to Rashtriya Samajwadi Party (Secular) through a banking channel. The assessee had furnished the bank statement evidencing the payment and the receipt issued by the political party. The status of the recipient as a registered unrecognized political party had not been disputed by the Assessing Officer. 19. The learned AR submitted that no material had been brought on record to establish that the donation, or any part thereof, was returned to the assessee in cash. The statements of the office-bearers of the political party and the documents allegedly found during the search were neither furnished to the assessee nor was an opportunity of cross-examination afforded. Reliance was placed, inter alia, on the decision of the Co-ordinate Bench in the case of Mukesh Somani v. Assessing Officer, ITA No.1140/Jodh/2025, order dated 02.06.2026. 20. The learned Departmental Representative (DR), on the other hand, relied upon the order of the learned CIT(A). The learned DR invited our attention to page 31 of the impugned order and submitted that the learned CIT(A) had duly considered and distinguished the decisions relied upon by the assessee. It was submitted that the search material established that the political party was accepting donations through banking channels and returning the amounts to donors in cash after deducting commission. The learned DR accordingly supported the

11 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia disallowance under section 80GGC and the addition under section 69A. 21. We have considered the rival submissions and perused the material available on record, including the assessment order, the impugned appellate order and the decisions placed before us. The controversy is whether the general material found during the search in the cases of the RUPP group, without any assessee- specific evidence of repayment, is sufficient to deny the deduction of Rs.3,00,000/- under section 80GGC and further to assess Rs.2,85,000/- as unexplained money under section 69A. 22. The facts emerge from the record are that the assessee made a payment of Rs.3,00,000/- to Rashtriya Samajwadi Party (Secular);the payment was made through a banking channel; the assessee furnished the bank statement and the donation receipt; the recipient was treated by the Department as a registered unrecognized political party and no cash or other unexplained money was found in the possession of the assessee. 23. The dispute is confined to the allegation that the political party returned Rs.2,85,000/- to the assessee in cash after deducting commission of 5%. 24. Section 80GGC permits deduction of a contribution made by an eligible person to a political party, except where the contribution is made in cash. For this purpose, a political party means a political party registered under section 29A of the

12 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia Representation of the People Act, 1951. The provision does not require that the recipient should be a recognized political party or that it should have contested elections during the relevant period. Registration and recognition are distinct concepts. 25. In the present case, the Department itself proceeded on the basis that Rashtriya Samajwadi Party (Secular) was a registered unrecognized political party. The payment through a banking channel and the issuance of the donation receipt have not been disproved. The statutory identity of the recipient and the non- cash mode of payment, therefore, stand established from the material accepted in the assessment order. 26. We are conscious that payment through a banking channel and production of a receipt cannot, by themselves, make an otherwise sham transaction genuine. Nevertheless, an allegation that a transaction is an accommodation entry must be supported by material establishing a nexus between the alleged accommodation-entry operation and the particular assessee. A general modus operandi may constitute a basis for commencing an inquiry, but it cannot, without assessee-specific corroboration, constitute proof that every contribution received by the political party was returned to every donor in cash. 27. The assessment order contains a general narration regarding the activities of the RUPP group, the statements of certain office-bearers, routing of funds through intermediary

13 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia entities and alleged return of donations in cash. However, the assessment order does not identify or reproduce any seized document recording repayment of cash to the present assessee; any statement specifically naming the assessee as a recipient of cash; the date or place on which the alleged cash was returned; the identity of the person who allegedly handed over the cash; any intermediary or bank trail linking the contribution made by the assessee with the alleged cash repayment orany other corroborative material demonstrating receipt or ownership of Rs.2,85,000/- by the assessee. 28. Even assuming that the assessee’s name appeared in a list of donors, such an entry would establish the making of the donation, which the assessee has never denied. It would not, without further evidence, establish that the amount was returned to the assessee in cash. The statements and documents relied upon by the Assessing Officer were recorded or recovered from third parties. The assessee specifically disputed the allegation of having received cash and requested the supporting evidence. Neither the assessment order nor the order of the learned CIT(A) records that the relevant statements and seized documents were furnished to the assessee or that an opportunity to cross-examine the persons whose statements were used against him was provided. The general findings recorded against the recipient political party cannot automatically be imported into the assessment of every donor without confronting the donor with the

14 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia specific material and establishing the transactional nexus. When the assessee has produced primary evidence in the form of the bank statement and donation receipt, the same cannot be rejected merely by applying a generalized allegation without producing the material said to establish repayment to the assessee. 29. The learned CIT(A) invoked the presumptions under sections 132(4A) and 292C of the Act. In our considered view, the said presumptions do not establish the alleged receipt of cash by the present assessee. The presumptions primarily operate in respect of the person from whose possession or control the books of account, documents, money or other assets are found. The material referred to by the authorities below was not found in the possession or control of the assessee.In any event, a statutory presumption cannot establish a fact which the document itself does not record. A record showing the assessee as a donor may support the admitted fact that the assessee made a contribution, but it cannot be presumed to establish that the assessee received cash in return unless the document contains some material to that effect. 30. The issue is directly covered by the decision of the Co- ordinate Bench in Mukesh Somani v. Assessing Officer, ITA No.1140/Jodh/2025, order dated 02.06.2026. The said case also related to the assessment year 2019-20, a contribution to Rashtriya Samajwadi Party (Secular) and information received

15 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia from the Investigation Wing regarding alleged accommodation entries. The Co-ordinate Bench recorded in paragraph 4 as under:

“The Department allegation was that the said political party to which the assessee had made donation was tainted party providing bogus accommodation entries through donation. However, the AO had not brought on record, any evidence which suggests that the said political party has derived commission and has paid money back to the assessee through backdoor. Thus, nothing has been brought on record by the AO to establish the direct nexus regarding benefit derived by the assessee from the said political party while making the said donation of Rs. 1,00,000/-.” 31. The operative finding in paragraph 5 reads as under:

“Following the ITAT Raipur Bench decision on parity of facts, we delete the addition of Rs. 1,00,000/- made by the AO u/s 80GGC of the Act.” 32. The factual foundation in the present appeal is materially identical. No distinguishing evidence linking the present assessee with repayment of cash has been brought to our notice. Judicial consistency, therefore, requires that the view taken by the Co- ordinate Bench be followed.

“At the time of hearing, the assessee himself appeared. The allegation of the Department is that the said political party in which the assessee had made donation was tainted party providing bogus accommodation entries through donations. However, the A.O had not brought out any

16 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia evidence which suggests that the said political party has derived commission and has paid money back to the assessee through backdoor. Nothing has been brought on record by the A.O to establish the direct nexus regarding benefit derived by the assessee from the said political party while making the said donation. In view of the aforesaid facts and circumstances, I do not find any infirmity with the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld.” 34. The principle emerging from the aforesaid decisions is that evidence regarding the conduct of the recipient political party may justify an inquiry, but it cannot dispense with proof connecting the particular donor with the alleged cash-back transaction. The said principle applies squarely to the present case.

Paragraph 10 of the said order records:

“We have independently examined the facts of the present case. We find that the assessee has not replied to basic question and the

17 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia objection raised by the assessing officer about his doubt on the genuineness of contribution to such political party, except claiming that it is not his duty to verify the affairs of such political party. It is not the case of the assessee that he is one of the main officer bearer or having any organisational post either at the District level or State level in the said political party. Even the assessee has not provided the details of his bank account or the bank account of such political party. Before us, the assessee has filed copy of the receipt of contribution/donation to the said political party alongwith the bank statement. No certificate is furnished in the form of verification of list of documents, if such bank statement is filed before lower authorities.” 36. In the present case, the bank statement and donation receipt were furnished during the assessment proceedings. There is also no finding that the recipient political party did not acknowledge the contribution made by the present assessee. The factual deficiencies noticed in Jayeshkumar Gopalbhai Akbari are, therefore, absent in the present case.

“We note that assessee had paid donations of Rs 30,00,000/- to one political party known as „Rashtriya Samajwadi Party(Secular)‟ and claimed the 100% deduction under chapter VI-A, under section 80GGC of the Act, for said donation, the assessing officer never conducted enquiry by way of issuing

18 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia notice under section 142 (1) of the Act. That is, assessee had contributed donation of a sum of Rs.30,00,000/- under section 80GGC of the Act to the „Rashtriya Samajwadi Party (Secular)‟, a political party, which remain unexamined and unattended on the part of the assessing officer. Hence, it is a case of no enquiry, on the part of the assessing officer, so far deduction under section 80 GGC of the Act, is concerned.” 38. Thus, the issue before the Co-ordinate Bench in that case was whether the original assessment order was erroneous and prejudicial to the interests of the Revenue because the Assessing Officer had not conducted an inquiry. The Co-ordinate Bench was not adjudicating, after completion of an inquiry, whether any particular amount had actually been returned to that assessee. Observations made in the context of the jurisdiction under section 263 cannot substitute the requirement of assessee-specific evidence in a completed reassessment. The observations regarding fraud in Miling P. Shroff were also founded upon the nature and scope of the proceedings under section 263. Before any transaction of a particular assessee can be treated as fraudulent, the foundational facts connecting that assessee with the fraud must first be established. A general conclusion regarding the activities of the recipient cannot, by itself, establish participation by every donor.

19 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia Revenue was sufficient to initiate an inquiry into the genuineness of the donation, an addition under section 69A could be made only after establishing that the assessee was found to be the owner of money which was not recorded in the books of account, if any, and in respect of which the explanation offered was not satisfactory. 40. No money was found in the possession of the assessee. There is no statement specifically alleging delivery of cash to the assessee and no documentary or digital evidence recording such delivery has been identified. The ownership and receipt of Rs.2,85,000/- have been inferred merely by reducing commission of 5% from the contribution of Rs.3,00,000/-. Such an arithmetical inference does not satisfy the foundational requirements of section 69A. 41. The learned CIT(A) observed that the absence of seizure of cash from the assessee was not decisive and that the matter could be determined on the preponderance of probabilities. There can be no dispute that the test of preponderance of probabilities is applicable in income-tax proceedings. However, a probability must arise from proved foundational facts. It cannot take the place of evidence altogether.

20 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia 42. Before drawing the adverse inference, the Revenue was required to establish at least some assessee-specific circumstance indicating the return of money. In the absence of any such material, the conclusion that the assessee received exactly Rs.2,85,000/- remains conjectural. The initial burden of establishing receipt and ownership of unexplained money under section 69A was not discharged by the Revenue. 43. In view of the foregoing discussion, we hold that the assessee discharged the initial burden by establishing the identity and status of the recipient, payment through a banking channel and issuance of the donation receipt. The Revenue failed to bring on record any cogent material establishing that the contribution was returned to the assessee in cash. 44. The disallowance of Rs.3,00,000/- under section 80GGC is, therefore, unsustainable. We direct the Assessing Officer to allow the deduction of Rs.3,00,000/- under section 80GGC.For the same reasons, and independently for want of satisfaction of the statutory ingredients of section 69A, the addition of Rs.2,85,000/- is directed to be deleted. Grounds Nos.2 to 6 are accordingly allowed.

21 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia 45. Ground No.1 challenges the validity of the reassessment proceedings. Since we have deleted the disallowance under section 80GGC and the addition under section 69A on the merits, adjudication of the validity of reopening in relation to those issues would be academic. We, therefore, leave the legal issue raised in Ground No.1 open without expressing any concluded opinion thereon.

Order pronounced on 01.09.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER

Jodhpur, Dated 01.09.2026 ANKIT, PS

आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1. प्रत्यथी / The Respondent. 2. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, जोधपुर/ DR, ITAT, Jodhpur 5. 6. गार्ड फाईल / Guard file.

22 ITA No. 1050/Jodh/2025 Manoj Kumar Jagetia

आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy// उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, जोधपुर / ITAT, Jodhpur