VIDUSHI ASHISH AGRAWAL,MUMBAI vs. ITO, WARD - 41 (4) (4), MUMBAI

Briefly stated facts of the case are that the assessee had filed return of income showing income of Rs. 3,49,140/-. It had claimed deduction of Rs. 50,000/- on account of donation u/s 80GGC of the Act. Subsequently based on certain information, it was reopened u/s 148 of the Act. In the reassessment proceedings, the AO made addition on account of donation of Rs. 50,000/- given to Rastriya Samajwadi Party (Secular) alleged to be involved in providing accommodation entries.

The case was re-opened on the basis of search and seizure operation u/s 132 of the Act conducted by the Investigation Wing where it has been established that the Rashtriya Samajwadi Party (Secular) was involved in receiving bogus donations and return the money to the respective donors. During the course of search and seizure operation, the key persons of the Rashtriya Samajwadi Party (Secular) and few beneficiaries had categorically accepted that the party was involved in receiving bogus donations. Based on detailed investigation in such bogus donation, it was found by the Department that modus operandi of such entities typically involved receiving donations through cheques credited to the bank accounts of the RUPPs. These funds were subsequently

1 The assessee bears the onus of establishing the genuineness of the said transaction. In the present case, as discussed in the foregoing paragraphs, the transaction had been found to be non-genuine and merely a sham arrangement. Further, as per Section 29C of the Representation of the People Act, 1951, every political party registered under Section 29A must submit a report to the Election Commission of India (ECI) on contributions received. It is seen that Rashtriyas Samajwadi Party (Secular) had not disclosed Contribution Reports. Therefore, the assessee was not eligible to claim deduction under section 80GGC of the Act in respect of the impugned transaction.

1 The AO based on the said Investigation report concluded that the Rashtriya Samajwadi Party (Secular) was involved in receiving bogus donations and return the money to the respective donors. During the course of search and seizure operation, the key persons of the said Party

In the subsequent appeal, the ld.CIT(A) endorsed the assessment order. He also placed reliance on the decision of coordinate bench of ITAT, Rajkot in the case of Milind Pankajbhai Shroff vs The Principal Commissioner of Income order dated 20/05/2024 vide ITA No. 93/RJT/2023 (AY 2018-19) which was stated to be conclusive in enabling the rejection of the claim of the assessee in this regard in case of the same RUPP held that assessee could not be allowed deduction under section 80GGC of the Act for contribution made to political party where said party had not furnished their bank statement, highlighting transactions during relevant financial year and copy of Form 24A submitted to Election Commissioner of India. Respectfully following the Hon'ble ITAT Rajkot Bench decision, he concurred with the AO that the assessee was not eligible for deduction under section 80GGC of the Act.

When the case was called out for hearing by the Bench, the appeal was not attended by anyone. No adjournment petition was also filed. The ld.DR placed reliance reliance on the orders of the lower authorities.

We have carefully considered all the aspects of the case. On perusal of the assessment order as also the appellate order, it is evident that the impugned sum was added by disallowing the claim of deduction/s 80GGC of the Act based on investigation report revealed that the whole process was bogus and non-genuine. From the detailed enquiries made during the pre and post search investigation by the Department, it could be construed that Rashtriyas Samajwadi Party (Secular), a Registered Unrecognized Political Party, has indulged in Bogus Donations Scam. The modus operandi of above political party was to accept donations directly from various donors or through CAs/Tax Consultants/Accountants, who were keen on claiming bogus deductions u/s.80GGC of the Income-tax Act, 1961. Such donated funds are routed through various dummy layering entities under the garb of political and social welfare expenses and persons controlling the dummy intermediaries earn commission for routing the funds or for converting it into cash.

1 Considering the detailed discussion forming part of the assessment and the appellate order and in the absence of any compliance by the assessee before us, we find no reasons to differ from the said order. Therefore, the appellate order is upheld dismissing the ground of appeal of the assessee.

In the result, the appeal of the assessee stands dismissed.