KAMAL MAHESHWARI,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX DEPARTMENT MUMBAI REGION

PDF · subscribers
ITA 3820/MUM/2026Status: DisposedITAT Mumbai06 August 2026AY 2019-206 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the disallowance of the deduction. It found that the donation was not genuine, as the political party was involved in providing bogus donation entries to enable donors to claim deductions.

What were the facts?

The assessee claimed a deduction of Rs. 5,00,000 under Section 80GGC for a donation made to a political party. The Assessing Officer disallowed this deduction, considering the donation to be bogus based on investigation findings.

What were the issues?

Whether a donation made to a political party flagged for providing bogus entries is eligible for deduction under Section 80GGC, and if the assessee can rebut investigation findings with mere documentary evidence of payment.

Which sections of the Income-tax Act were involved?

Section 80GGC,Section 148,Section 250

AI-generated summary — verify with the full judgment below

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “E” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.3820/MUM/2026 (AY: 2019-20) Kamal Maheshwari vs. DCIT, Circle-42 (2) (1) 1404, Daffodil, Neelkanth Garden, Kautilya Bhavan, Bandra Kurla Govandi Station Road, T F Donor Complex, Bandra (East), Mumbai- Mumbai-400088. 400051. PAN/GIR No: ADUPM2611E (Appellant) (Respondent) Assessee by Shri Yash Chauhan Revenue by Smt. Sujatha Iyyanger (Sr. DR) Date of Hearing 06.08.2026 Date of Pronouncement 02.09.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the assessee emanates from the order passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless

Appeal Centre [in short, ‘CIT(A)’], dated 03.02.2026 for the assessment year (AY)

2019-20.

2.

The grounds of appeal raised by the assessee are as under:

“1. That the Learned Assessing Officer erred in disallowing the deduction claimed by the appellant under Section 80GGC of the Income-tax Act, 1961 amounting to 5,00,000, despite the fact that the donation was made through proper banking channels and supported by valid documentary evidence including the receipt issued by the political party.

2.

That the Learned Assessing Officer has made the addition merely on the basis of generalized Investigation findings relating to certain political parties without bringing any specific evidence on record demonstrating that the appellant had received any cash refund or accommodation entry against the donation made.

3.

That the Learned Assessing Officer failed to establish any direct nexus between the appellant and the alleged accommodation entry mechanism and therefore the addition made is purely based on presumption and suspicion.

4.

That no evidence whatsoever has been brought on record to demonstrate that the appellant received any benefit, directly or indirectly, in the form of cash or otherwise against the donation made.

5.

That the Learned Assessing Officer erred in making the impugned addition by relying upon statements and investigation findings relating to political parties, without furnishing copies of such statements and materials to the appellant and without providing any opportunity to cross-examine the persons whose statements were relied upon, thereby violating the principles of natural justice.

6.

That the Learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of deduction claimed under Section 80GGC of the Income-tax Act, 1961 without properly appreciating the documentary evidence placed on record by the appellant, Including the donation receipt issued by the political party and the bank statement evidencing payment through banking channels.

7.

The Learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of deduction under Section 80GGC despite the fact that the political party to which the donation was made, namely Rashtriya Samajwadi Party (Secular), was duly registered with the Election Commission of India under Section 29A of the Representation of the People Act, 1951, as evidenced from the list of registered political parties Issued by the Election Commission, a copy of which has been placed on record.

8.

That the burden of proving the non-genuineness of the transaction lies upon the department, which has not been discharged in the present case.

9.

That in absence of any assessee-specific evidence or corroborative evidence, the disallowance made is unsustainable in law.”

3.

Facts of the case, in brief, are that the assessee filed return of income for

the AY 2019-20 declaring total income at Rs. 78,42,720/-. The case was reopened for the reasons that the assessee had obtained bogus entries in the form of political donation amounting to Rs.5,00,000/- through Rashtriya Samajwadi Party (S) during the year under consideration. In response to the notice u/s 148 of the Act, assessee filed returned of income declaring total income of Rs.79,44,700/-. The AO during the re-assessment proceedings issues notices and after considering the reply of the assessee, added Rs.5,00,000/- to the returned income and determined total income at Rs.84,44,700/-. 4. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A).

The CIT(A) condoned the delay in filing appeal and decided the case on merit. The

relevant part of the decision dismissing the appeal is at pages 22 to 24 of the

appellate order. The same is reproduced below for ready reference:

“In this case, information was received that a search and survey action was conducted on Registered Unrecognized Political Parties (RUPP Group), wherein several political parties, intermediary entities and exit providers were covered. The investigation revealed that the modus operandi of such political parties was to accept donations either directly from donors or through Chartered Accountants, tax consultants, and other intermediaries, with the intention of enabling donors to claim bogus deductions under sections 80GGB / 80GGC of the Income-tax Act, 1961. It was further found that such donations were routed through multiple layering entities under the guise of political or social expenditure, and ultimately the funds were returned to the original donors in cash after deducting a certain percentage as commission. The commission so deducted was shared amongst party office bearers, intermediaries and facilitators of such transactions. As per the information on record, it is seen that the appellant was one of the beneficiary of such bogus entry in the form of political donation of Rs. 5,00,000/- from Rashtriya Samajwadi Party (Secular) during the A.Y. 2019-20 and on verification of the return of income of the appellant for A.Y. 2019-20, it was noticed that the appellant had claimed deduction of Rs. 5,00,000/- u/s 80GGC of the Act on the basis of such donation. Thus, the donation claimed was found to be non-genuine, and the deduction claimed on the basis of such bogus donation was rightly held to be not allowable. The political party in question was flagged by the Investigation Wing for providing bogus donation entries. The Assessing Officer acted on investigation-backed information indicating that the said political party was being used as an entry provider. Statements of Smt. Sandhya Singh party president, her husband Sh. Bishwajeet Singh and Sh. Ritesh Kumar S. Shah were recorded wherein they categorically admitted the modus operandi of the said scam discussed in proceeding paragraphs. The donation receipt and payment through banking channels alone cannot override the adverse material brought on record. Payment through banking channels is not sacrosanct and does not, by itself, establish the genuineness of a transaction. Reliance in this regard is placed on the judgment in CIT vs. Precision Finance (P) Ltd. (208 ITR 465). The appellant, in his submissions, contended that the donation was genuine, made in good faith, and that no cash or other benefit was received back. These contentions were duly considered; however, the same were found to be not satisfactory, as the appellant failed to rebut the adverse findings of the Investigation Wing based on search and postsearch investigations. Mere denial of receipt of cash, without supporting and corroborative material, is insufficient to dislodge the conclusions drawn in the assessment proceedings. Accordingly, the appellant failed to furnish any cogent explanation or supporting evidence either during the assessment proceedings or during the appellate proceedings to satisfactorily explain the same. In view of the above discussion, the deduction claimed u/s 80GGC was rightly disallowed by the Assessing Officer. Accordingly, the disallowance of Rs. 5,00,000/- u/s 80GGC is hereby confirmed. Therefore, Grounds No. 1, 2, 4, 5 and 6 are dismissed.”

5.

Aggrieved by the order of CIT(A), the assessee filed appeal before the

Tribunal. The Ld. AR submitted that the assessee has made the donation through

proper banking channel which is supported by documentary evidence including

receipt by the political party. There is no nexus between the assessee and the

alleged accommodation entry mechanism and the addition is purely on

presumption and suspicion. The CIT(A) erred in confirming the disallowance

without appreciating the documentary evidences placed on record. He requested

to set aside the order of CIT(A) and allowed claim of the donation.

6.

On the other hand, the Ld. Sr. DR supported the order of lower authorities.

He submitted that similar donations made to Rashtriya Samajwadi Party (S) have

been disallowed by the lower authorities in a number of cases. He further

submitted that the orders have been upheld by the ITAT. Hence, the order of

CIT(A) may be confirmed.

7.

We have heard both sides and perused the materials on record. We find

that the CIT(A) has dismissed the appeal by a speaking order incorporating the

details of the case, which could not be controverted by the Ld. AR of the assessee.

The undisputed fact is that the assessee has made donation of Rs.5,00,000/- to

Rashtriya Samajwadi Party (S) and claimed deduction u/s 80GGC of the Act. We

find that the co-ordinate Bench of Mumbai Tribunal in case of Ritesh Sugan Jain

vs. ITO in ITA No.8546/Mum/2025 dated 27.04.2026 has dismissed the appeal of

the assessee on similar facts. In the said case, the assessee had claimed deduction

of Rs.9,90,000/- u/s 80GGC of the Act in respect of donation made to Rashtriya

Samajwadi Party (S). The ITAT relied on the decision in case of Milind Pankajbhai

Shroff vs. Pr. CIT-1, Rajkot in ITA No.93/RJT/2023 dated 20.05.2024, wherein it was

found that the donation received by Rashtriya Samajwadi Party was bogus. The

assessee has also claimed deduction u/s 80GGC of the Act and 80G(5) of the Act,

which was also bogus. In conclusion, the Tribunal dismissed the appeal of

assessee by stating as under:

“6. We find that the facts of the present case are pari-materia to the facts before the Coordinate Bench in case of Milind Pankajbhai Shroff (supra) and where, the ld CIT(Appeal) following the said decision has returned a finding that it is a case of bogus donation and the denial of claim of deduction u/s 80GGC was upheld, we do not find any legal or factual infirmity in the order so passed by the ld CIT(A) and the findings therein are confirmed and the grounds of appeal so raised by the assessee are dismissed. In the result, the appeal of the assessee is dismissed.”

7.1 The Ld. AR of the assessee has not been able to distinguish the decision

either on fact or in law. Hence, following the above decision, the order of CIT(A)

is confirmed and the grounds of appeal raised by the assessee are dismissed.

8.

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

Order is pronounced on 02.09.2026.

Sd/- Sd/- (SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 02.09.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order

Assistant Registrar ITAT, MUMBAI

More judgments on Section 80GGC

All 195 judgments and leading authorities on Section 80GGC →

Recent GST High Court judgments

Search GST case law →