SAGAR RAJENDRA MASKE ,VADODARA vs. THE ITO, WARD 1(2)(2), VADODARA

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 2433/AHD/2025 (Assessment Year: 2019-20) Sagar Rajendra Maske, The Income Tax Officer, Vs. B-205 Tulaja Bhavani Complex, Ward-1(2)(2), Opposite My Apple School, Vadodara. Visvamitri Road Vadodara-390011. [PAN : ATQPM8259 E] (Appellant) .. (Respondent) Appellant represented by : Shri Sanket Bakshi, A.R Respondent represented by: Shri Amit Pratap Singh, Sr.DR Date of Hearing 20.07.2026 Date of Pronouncement 22.07.2026

O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay Condoned

This appeal has been filed by the Assessee against the order dated 30.09.2025 passed by the Ld. Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2019-20.

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 2– 1 The learned Commissioner of Income Tax (Appeals) ["the CIT(A)"] and the Income Tax Officer, Ward 1(2)(1), Vadodara ("the AO") erred in fact and in law in reopening the proceedings of the Appellant u/s. 148 of the Act. 2 The learned AO erred in fact and in law in issuing the notice u/s 148A of the Act as the same ought to have been issued by the Faceless Assessing Officer ("the FAO")

Deduction of Rs.6,50,000/- u/s, 80GGC

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 3– Reopening u/s. 148 of the Act 3. The reassessment proceedings were initiated on the basis of tangible information received through the Insight Portal pursuant to the search conducted under Section 132 of the Act. We find that the Assessing Officer followed the prescribed procedure for reopening the assessment. Therefore, grounds Nos. 1 and 2 challenging the validity of reopening under Section 148 of the Act are dismissed

Deduction of Rs.6,50,000/- u/s, 80GGC 4. The assessee is an individual who filed his original return of income for Assessment Year 2019-20 on 23.08.2019 declaring a total income of ₹23,03,120/-. While filing the return of income, the Appellant claimed a deduction of ₹6,50,000/- under Section 80GGC of the Income- tax Act, 1961, in respect of a donation made to Rashtriya Samajwadi Party (Secular). Subsequently, based on information received through the Insight Portal under the CBDT's Risk Management Strategy and the findings of a search and seizure operation conducted under Section 132 of the Act on 07.09.2022 in the case of a group of Registered Unrecognized Political Parties (RUPPs), including Rashtriya Samajwadi Party (Secular), the Assessing Officer formed a belief that income chargeable to tax had escaped assessment. According to the Revenue, the investigation revealed that certain RUPPs were allegedly engaged in providing accommodation entries by issuing bogus donation receipts and returning the donation amounts to the donors through cash, RTGS or NEFT after deducting a commission. On the basis of the said information, the assessee was alleged to be one of the beneficiaries of such accommodation entries. Accordingly, reassessment proceedings

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 4– were initiated under Section 147 of the Act, and a notice under Section 148 dated 20.04.2023 was issued to the Appellant. The Appellant did not file a return of income in response to the said notice. Thereafter, notices under Section 142(1) of the Act were issued calling upon the Appellant to substantiate the genuineness of the donation claimed under Section 80GGC of the Act. In response, the Appellant submitted that the donation had been made through normal banking channels and was duly supported by documentary evidence, and therefore the deduction claimed under Section 80GGC of the Act was genuine and allowable. However, the learned Assessing Officer was not satisfied with the explanation furnished by the Appellant. Relying upon the investigation findings, the Assessing Officer held that Rashtriya Samajwadi Party (Secular) was not carrying out any genuine political activities and was allegedly engaged in providing accommodation entries in the guise of political donations. Accordingly, the Assessing Officer disallowed the deduction of ₹6,50,000/- claimed under Section 80GGC of the Act and completed the assessment under Section 147 of the Act.

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 5– Tribunal in in the case of Saurabh Pravinbhai Patel Vs. ITO in ITA No. 1017/Ahd/2023 vide order dated 30.04.2025 on donation made to political parties u/s. 80GGC of the Act wherein it was held as follows:

“4. Aggrieved against the assessment order, assessee filed an appeal before Ld. CIT(A). After considering the Tribunal’s decision, confirmed the disallowance made by the Assessing Officer by observing as follows: “While adjudicating the instant case by the undersigned, the eye- opening facts came in notice in the case of Pavan Anil Bakeri vs. Deputy Commissioner of Income-tax adjudicated by the Hon'ble ITAT, Ahmedabad Bench which changed the course of the case to a whole new direction In the above case the Hon'ble ITAT held that where assessee made donation to a political party and claimed deduction under section 80GGC, since Assessing Officer found that bank accounts of above political party had been used by accommodation entry provider where donation received by cheques were layered though various bank accounts and ultimately cash was returned back, donation claimed under section 80GGC was merely accommodation entry and thus, disallowance of deduction under section 80GGC was proper. The sequence of events in the above case are "The assessee paid donation of Rs 52,00,000/- to Rashtriya Samajwadi Party (Secular) To verify the genuineness and utilization purpose of the donation, a notice u/s 133(6) was issued on 5-10- 2018 to Rashtriya Samajwadi Party (RSP) There was no representation from RSP Therefore another opportunity was granted vide letter dated 16-10-2018 Again there was no response from RSP. Therefore a summon u/s 131(1) of the Act was issued to Shri S.N. Chaturvedi, National President, RSP to attend the office on 19-11-2018 to produce the requisite the donation details. No one attended the office of the said date of hearing. 21 RSP is a political party registered with Election Commission of India. The Assessing Officer called for the bank details of RSP with Oriental Bank of Commerce, New Naroda Branch. From the perusal of the bank statement, it was observed there was a credit entry of Rs. 52,00,000/-on 07-10-2015 which is donation given by the assessee and there was two debit entries amounting to Rs. 27,00,000/- and Rs 25,00,000/- respectively on the same day On further enquiry from the Oriental Bank of Commerce the amount of Rs. 27,00,000/- credited to Sterlite Inc and Rs 25,00,000/-credited to Shah And Co. on 7-10-2015.

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 6– 2.2. On examination of the RSP bank statement, it was found that it is a general practice of crediting huge cash and subsequently transferring to another party on same day. Further analysis of the transaction particulars reveals that the cash was transferred to mainly four parties namely Guru Enterprise, Unique Trading, Mahavaisnavi and KK Indersriz. It was also observed that no cash withdrawal for expenses like rent, electricity, water, newspaper, fuel etc of RSP and is not reflecting in the bank account. There is an Inspector of Income-tax was deputed to visit the premises of RSP at UG-8. Harekrishna Complex, C.TM Char Rasta, Amraiwadi, Ahmedabad-380026 on 15-11-2018 The Inspector submitted his report that RSP office situated on 2nd Floor of 3 storey building which is a small shop and shutter of which was half closed on that day. Nearby peoples were inquired that RSP Office which is found to be closed in most of the times. Copy of the said RSP Office photographs is reproduced in the assessment order. Further perusal of the records of RSP it is observed that during the assessment year 2016-17, RSP has received only donation amounting to Rs. 14,73,309/- whereas as per the bank account statement of the RSP in Oriental Bank of Commerce, total amount credited is Rs. 38,15,03,885/-That apart from RSP is maintaining two other bank account one at Bank of India and another of Central Bank of India. Further enquiry of Mis. Sterlite Inc and Shah And Co both the accounts were closed on 30-3-2016. An enquiry by the Bank both the proprietorship firms, where there is no stocks found and the office premises were being occupied by another person. 2.3 On further verification the donation amount of Rs. 52,00,000/- paid by the assessee to RSP was transferred to Waheguru Enterprise and Sapan Traders on 7-10-2015 of Rs. 25,00 000/-and Rs. 27,00,000/- respectively. This systematic pattern of transferring the funds credited by RSP clearly establishes the modus operandi of the account opening i.e. to route or transfer the funds of RSP back to the donator. Thus the assessee gave Rs. 52,00,000/- to RSP in the form of donation which was transferred to accounts of Shri Mukesh Mehta who claimed to be a businessman. Again the said amount was transferred to Sapan Traders and Waheguru Enterprise. Thus the donation claimed to be paid by the assesse is found to be bogus and the same is disallowed u/s. 80GGC of the Act and added back to the total income of the assessee and also initiated penalty proceedings u/s. 271(1)(c) of the Act for concealment of income." On further appeal Ld. CIT (A) observed in the case "The Assessing Officer has clearly brought out facts that bank accounts of above political party have been used by the accommodation entry provider where the donation received by cheques were layered through

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 7– various bank accounts and ultimately cash was returned back. I therefore, agree with the findings given by the AO that donation of Rs. 52,00,000/-claimed u/s. 80GGC is merely accommodation entry. The Honorable ITAT Ahmedabad in the case of Pavankumar M. Sanghvi v. ITO, Wd. 3(1)(2), Baroda [2017] 81 taxmann.com 308 on the issue of accommodation entry has observed as under- "8. As I proceed to deal with genuineness aspect, it is important to bear in mind the fact that what is genuine and what is not genuine is a matter of perception based on facts of the case vis-a-vis the ground realities. The facts of the case cannot be considered in isolation with the ground realities. It will, therefore, be useful to understand as to how the shell entries, which the loan creditors are alleged to be, typically function, and then compare these characteristics with the facts of the case and in the light of well settled legal principles. A shell entity is generally an entity without any significant trading, manufacturing or service activity, or with high volume low margin transactions to give it colour of a normal business entity used as a vehicle for various financial manoeuvers. A shell entity, by itself, it not an illegal entity but it is their act of abatement, of, and being part of financial manoeuvring to legitimize illicit monies and evade taxes, that takes it actions beyond what is legally permissible These entities have every semblance of a genuine business its legal ownership by persons in existence, statutory documentation as necessary for a legitimate business and a documentation trail as a legitimate transaction would normally follow. The only thing which sets its apart from a genuine business entity is lack of genuineness in its actual operations. The operations came out by these entities, are only to facilitate financial manoeuvring for the benefit of its clients, or with that predominant underlying objective, to give the colour of genuineness to these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the financial world, as many other evils. Even a layman, much less a Member of this specialized Tribunal, cannot be oblivious of these ground realities." In the aforesaid case, the Hon'ble ITAT bench held "As regarding ground no. 2, donation of Rs. 52,00,000/- made u/s. 80GGC, the ground is general in nature. The assessee has not produced any additional evidence in support of its claim. In fact the assessee had stated that it had cordial relationship with Mr. Kamlendu Tripathi Secretary of RSP and no other criteria was followed for making

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 8– these donations. 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. It is appropriate to follow the Hon'ble Supreme Court judgment, wherein SLP filed by the assessee is dismissed confirming the Tribunal's decision to come to the conclusion that the entire loan transaction was not genuine, in the case of Pavankumar M. Sanghvi v. ITO [2018] 97 taxmann.com 398/258 Taxman 160 (SC) which held as follows: Assessee received certain sum as loan from two companies - Assessing Officer having found that said lender companies were shell entities added loan amount to income of assessee under section 68-Bank statement of lender companies revealed high transactions during day and a consistently minimal balance at end of working day-Further day when assessee was given loan there were credit entries of almost similar amounts, and balance after these transactions was a small amount Tribunal taking into account bank statements of lender companies and fact that assessee failed to produce these lenders for verification held that alleged loan transactions were not genuine -High Court by impugned order held that since Tribunal had given elaborate reasons to come to conclusion that entire loan transaction was not genuine, appeal filed before it was to be dismissed Whether Special Leave Petition against impugned order was to be dismissed. 5.2 In the absence of any evidence from the assessee, the grounds raised by the assessee are untenable and therefore the same is rejected. The findings given by the lower authorities does not require any interference and the addition is sustained. It is pertinent to mention here that out of two political parties to whom the appellant paid total donation of Rs. 1,13,51,000/- the modus operandi of the one political party named the Rashtriya Samajwadi Party (Secular) has already been discussed in details in the preceding paragraphs of the instant order. It can be safely presumed that the modus operandi of other political party named Kisan party of India is also indulging only in providing accommodation entry as can be ascertained from various newspaper reports and enquiries which is being conducted by various institutions.

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 9– In view of the findings in the above case I am inclined to agree with the decision made by the AO during the assessment proceedings regarding the donation made was basically a bogus donation as the Political Party is indulging only in providing accommodation entry. Thus in view of the above discussion, the submission made by the appellant regarding the claim of deduction for donation of Rs. 1.13.51,000/- to be allowed is not acceptable as already discussed in detail in the preceding Paras of the instant order. Therefore, the ground of appeal stands dismissed.” 5. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The learned National Faceless Appeal Centre has erred in law and facts by confirming the disallowance of claim for deduction under section 80GGC of the Act of Rs.1,13,51,000/- made by the learned A.O. and therefore the learned A.O. be directed to allow the same while computing total income. 2. That the appellant craves liberty to add, amend and alter any ground of appeal before the final hearing. 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.”

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 10– (iii) Rajen Jayantilal Merchant Vs. ITO (ITA No. 1683/Ahd/2025),

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 11– (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).

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 12– 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 ITA No.816/PUN/2018, order dated 22.11.2022. 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."

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 13–

The order pronounced in the open Court on 22.07.2026

Sd/- Sd/- (RAHUL CHAUDHARY) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 22.07.2026

ITA No. 2433/AHD/2025, AY-2019-20 Sagar R Maske Vs. The ITO - 14– आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent. 3. संबंिधतआयकरआयु�/ Concerned CIT 4. आयकरआयु�(अपील) /The CIT(A)- 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड�फाईल /Guard file. आदेशानुसार/ BY ORDER, True Copy सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपीलीयअिधकरण, अहमदाबाद / ITAT, Ahmedabad