MANOJ JAYRAM SARANG,MUMBAI vs. INCOME TAX OFFICER, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J (SMC)” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER)

ITA No. 2531/MUM/2026 Assessment Year: 2019-20

Manoj Jayram Sarang, Kaveri Income Tax Officer, Piramal Nagari Nivara CHS, 2/B/16, Chambers, Lower Parel, Mumbai- Vs. Plot No. 3, Santosh Nagar, 400012, Maharashtra. Goregaon Eat, Mumbai – 400065, Maharashtra. PAN NO. BAHPS 9760 H Appellant Respondent

Assessee by : Shri Mahesh Mara, Adv. Revenue by : Shri Mukesh Thakwani (SR DR)

Date of Hearing : 15/06/2026 : 17/06/2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

This appeal by the Assessee is directed against order dated 24.12.2025, passed by the learned Commissioner of Income-tax (Appeals) – National Faceless Appeal Centers- Delhi (in short, “the Ld. CIT(A)”), for the Assessment Year 2019–20, raising following grounds: “1. DISALLOWANCE BASED ON INCORRECT ASSUMPTIONS AND GENERALIZED FINDINGS: That on the facts and in the circumstances of the case, the Assessing

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Officer erred in relying upon generalized findings from search operations Officer erred in relying upon generalized findings from search operations Officer erred in relying upon generalized findings from search operations conducted in third party cases involving RUPPS group, Ahmedabad, without conducted in third party cases involving RUPPS group, Ahmedabad, without conducted in third party cases involving RUPPS group, Ahmedabad, without establishing any specific link between the Appellants transaction and the alleged stablishing any specific link between the Appellants transaction and the alleged stablishing any specific link between the Appellants transaction and the alleged modus operandi. The reliance placed by the Assessing Officer on the 1 Election operandi. The reliance placed by the Assessing Officer on the 1 Election operandi. The reliance placed by the Assessing Officer on the 1 Election Commission website data showing zero contributions OR non filing of accounts by Commission website data showing zero contributions OR non filing of accounts by Commission website data showing zero contributions OR non filing of accounts by the political party cannot be deemed conclusive proof of non rty cannot be deemed conclusive proof of non-genuineness of the rty cannot be deemed conclusive proof of non Appellants specific transaction. Compliance failures of the donee political party Appellants specific transaction. Compliance failures of the donee political party Appellants specific transaction. Compliance failures of the donee political party cannot be imputed to the Appellant donor. As held in ACIT v. Armee Infotech cannot be imputed to the Appellant donor. As held in ACIT v. Armee Infotech cannot be imputed to the Appellant donor. As held in ACIT v. Armee Infotech supra and confirmed in the Raipur supra and confirmed in the Raipur ITATs order, disallowance made purely on ITATs order, disallowance made purely on presumption and general findings cannot be upheld in absence of specific presumption and general findings cannot be upheld in absence of specific presumption and general findings cannot be upheld in absence of specific corroboration. 2. DONOR CANNOT BE HELD RESPONSIBLE FOR THE DONOR CANNOT BE HELD RESPONSIBLE FOR THE ACTS OF THE DONEE ACTS OF THE DONEE That on the facts and in the That on the facts and in the circumstances of the case, the Asses circumstances of the case, the Assessing Officer erred in holding the Appellant accountable for any alleged non compliance, the Appellant accountable for any alleged non compliance, the Appellant accountable for any alleged non compliance, irregularity, OR misuse of funds by Rashtriya Samajwadi Party Secular, the irregularity, OR misuse of funds by Rashtriya Samajwadi Party irregularity, OR misuse of funds by Rashtriya Samajwadi Party donee political party. The Honble Supreme Court of donee political party. The Honble Supreme Court of India in LIC of India v CIT India in LIC of India v CIT 1997 219 ITR 410 SC has laid down 2 that donors cannot be held responsible for 410 SC has laid down 2 that donors cannot be held responsible for 410 SC has laid down 2 that donors cannot be held responsible for the manner in which political parties OR other recipients utilize donated funds the manner in which political parties OR other recipients utilize donated funds the manner in which political parties OR other recipients utilize donated funds post donation, applying the Doctrine of Impossibility. The Appellants obligations post donation, applying the Doctrine of Impossibility. The Appellants obligations post donation, applying the Doctrine of Impossibility. The Appellants obligations ended upon making the donati ended upon making the donation through banking channels and furnishing the on through banking channels and furnishing the requisite documentary evidence. The Income Tax Act, 1961 imposes no obligation requisite documentary evidence. The Income Tax Act, 1961 imposes no obligation requisite documentary evidence. The Income Tax Act, 1961 imposes no obligation upon the donor to monitor OR control the utilization of donations by the donee upon the donor to monitor OR control the utilization of donations by the donee upon the donor to monitor OR control the utilization of donations by the donee subsequent to the making of such donation subsequent to the making of such donation. 3. ERRONEOUS LEVY OF INTEREST UNDER SECTIONS 234A, 234B AND 234C. EOUS LEVY OF INTEREST UNDER SECTIONS 234A, 234B AND 234C. EOUS LEVY OF INTEREST UNDER SECTIONS 234A, 234B AND 234C. That on the facts and in the circumstances of the case, the Assessing Officer That on the facts and in the circumstances of the case, the Assessing Officer That on the facts and in the circumstances of the case, the Assessing Officer erred in levying interest under Sections 234A, 234B erred in levying interest under Sections 234A, 234B and 234C amounting to and 234C amounting to Rs.61178 as per the computation forming part o s per the computation forming part of the Order Giving Effect dated 31 f the Order Giving Effect dated 31 Dec 2025. Since the entire addition of Rs. 4,00,000 under Section 80GGC is Dec 2025. Since the entire addition of Rs. 4,00,000 under Section 80GGC is Dec 2025. Since the entire addition of Rs. 4,00,000 under Section 80GGC is unsustainable and liable to be deleted, consequential interest under Sections unsustainable and liable to be deleted, consequential interest under Sections unsustainable and liable to be deleted, consequential interest under Sections 234A, 234B, and 234C ought to be deleted OR recalculated accordingly. Without 234A, 234B, and 234C ought to be deleted OR recalculated accordingly 234A, 234B, and 234C ought to be deleted OR recalculated accordingly prejudice, the Assessing Officer be directed to recompute interest strictly in prejudice, the Assessing Officer be directed to recompute interest strictly in prejudice, the Assessing Officer be directed to recompute interest strictly in accordance with law upon deletion of the impugned addition. accordance with law upon deletion of the impugned addition. 4. DEMAND UNDER SECTION 156 IS UNSUSTAINABLE: DEMAND UNDER SECTION 156 IS UNSUSTAINABLE: That the Notice of Demand under Section 156 of the Act dated Demand under Section 156 of the Act dated 31 Dec 2025 raising a demand of Rs. 31 Dec 2025 raising a demand of Rs. 149841 is unsustainable in law as it flows from the wrongful disallowance of 149841 is unsustainable in law as it flows from the wrongful disallowance of 149841 is unsustainable in law as it flows from the wrongful disallowance of deduction under Section 80GGC and the erroneous levy of interest. The TDS deduction under Section 80GGC and the erroneous levy of interest. The TDS deduction under Section 80GGC and the erroneous levy of interest. The TDS credit of Rs. 97366 as per Form 26AS has been correctly granted by the CIT credit of Rs. 97366 as per Form 26AS has been correctly granted by th credit of Rs. 97366 as per Form 26AS has been correctly granted by th Appeal and the ITO in the Order Giving Effect. Upon deletion of the impugned Appeal and the ITO in the Order Giving Effect. Upon deletion of the impugned Appeal and the ITO in the Order Giving Effect. Upon deletion of the impugned addition and interest there will be no outstanding tax liability. The demand be addition and interest there will be no outstanding tax liability. The demand be addition and interest there will be no outstanding tax liability. The demand be quashed accordingly. quashed accordingly. 5. RESERVATION OF RIGHT TO ADD GROUNDS: The Appellant reserves the right RESERVATION OF RIGHT TO ADD GROUNDS: The Appellant reserves the right RESERVATION OF RIGHT TO ADD GROUNDS: The Appellant reserves the right to add, amend, alter, OR withdraw any of the foregoing grounds of appeal at any to add, amend, alter, OR withdraw any of the foregoing grounds of appeal at any to add, amend, alter, OR withdraw any of the foregoing grounds of appeal at any

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time before OR at the time of hearing, as may be deemed fit by the Appellant OR time before OR at the time of hearing, as may be deemed fit by the Appellant OR time before OR at the time of hearing, as may be deemed fit by the Appellant OR by the Appellants authorized representative. by the Appellants authorized representative. 6. ERRONEOUS DISALLOWANCE OF DEDUCTION UNDER SECTI ERRONEOUS DISALLOWANCE OF DEDUCTION UNDER SECTI ERRONEOUS DISALLOWANCE OF DEDUCTION UNDER SECTION 80GGC: That on the facts and in the circumstances of the case the Ld. CIT APPEAL erred in on the facts and in the circumstances of the case the Ld. CIT APPEAL erred in on the facts and in the circumstances of the case the Ld. CIT APPEAL erred in upholding the disallowance of deduction of 400000 claimed by the Appellant upholding the disallowance of deduction of 400000 claimed by the Appellant upholding the disallowance of deduction of 400000 claimed by the Appellant under Section 80GGC of the Act in respect of donation made to Ms Rashtriya under Section 80GGC of the Act in respect of donation made to Ms Rashtriya under Section 80GGC of the Act in respect of donation made to Ms Rashtriya Samajwadi Party Secular. The Appellant made the donation through proper ty Secular. The Appellant made the donation through proper ty Secular. The Appellant made the donation through proper banking channels and furnished the donation receipt Section 13A certificate, and banking channels and furnished the donation receipt Section 13A certificate, and banking channels and furnished the donation receipt Section 13A certificate, and bank statements in 6 evidence thereof. The Assessing Officer did not examine OR bank statements in 6 evidence thereof. The Assessing Officer did not examine OR bank statements in 6 evidence thereof. The Assessing Officer did not examine OR rebut these documents. The disallowa rebut these documents. The disallowance is arbitrary and contrary to the settled nce is arbitrary and contrary to the settled legal position that once a deduction is claimed with documentary evidence, the legal position that once a deduction is claimed with documentary evidence, the legal position that once a deduction is claimed with documentary evidence, the onus shifts to the Revenue to disprove the same with specific material. That the onus shifts to the Revenue to disprove the same with specific material. That the onus shifts to the Revenue to disprove the same with specific material. That the Honble Income Tax Appellate Tribunal, Raipur Bench, Honble Income Tax Appellate Tribunal, Raipur Bench, in ITA No 11RPR2026 ACIT in ITA No 11RPR2026 ACIT Circle 11 Bilaspur v Anuj Prakash Gupta, Assessment Year 2019 20, decided on Circle 11 Bilaspur v Anuj Prakash Gupta, Assessment Year 2019 20, decided on Circle 11 Bilaspur v Anuj Prakash Gupta, Assessment Year 2019 20, decided on 05 Feb 2026 has categorically held 05 Feb 2026 has categorically held. 7. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE DENIAL OF CROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE DENIAL OF CROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE DENIAL OF CROSS EXAMINATION: That on the facts and in the circumstances of the case the EXAMINATION: That on the facts and in the circumstances EXAMINATION: That on the facts and in the circumstances Assessing Officer violated the fundamental principles of natural justice by relying Assessing Officer violated the fundamental principles of natural justice by relying Assessing Officer violated the fundamental principles of natural justice by relying upon statements and findings from search proceedings carried out against third upon statements and findings from search proceedings carried out against third upon statements and findings from search proceedings carried out against third parties without confronting the Appellant with such material and without parties without confronting the Appellant with such material and without parties without confronting the Appellant with such material and without affording him any opportunity to cross examine the persons whose statements ording him any opportunity to cross examine the persons whose statements ording him any opportunity to cross examine the persons whose statements were relied upon. It is a well settled principle that any adverse evidence OR were relied upon. It is a well settled principle that any adverse evidence OR were relied upon. It is a well settled principle that any adverse evidence OR statement relied upon by the Assessing Officer must be communicated the statement relied upon by the Assessing Officer must be communicated the statement relied upon by the Assessing Officer must be communicated the Appellant and the opportunity to Appellant and the opportunity to cross examine must be given. Reliance is placed cross examine must be given. Reliance is placed on the judgments in Shobhit Gupta v ACIT and Principal Commissioner of Income on the judgments in Shobhit Gupta v ACIT and Principal Commissioner of Income on the judgments in Shobhit Gupta v ACIT and Principal Commissioner of Income Tax v Kishore Kumar Mohapatra. Tax v Kishore Kumar Mohapatra.” 2. Briefly stated facts of the case are that Briefly stated facts of the case are that assessee assessee an employee of M/s. JP Morgan Services JP Morgan Services India Pvt. Ltd. filed his return of income return of income for the year under consideration on 14.07.2019 declaring total at for the year under consideration on 14.07.2019 declaring total at for the year under consideration on 14.07.2019 declaring total at Rs. 5,01,250/-. Subsequently, the Assessing Officer received . Subsequently, the Assessing Officer received . Subsequently, the Assessing Officer received information, disseminated disseminated by the investigation wing by the investigation wing that assessee had availed accommod accommodation entry of bogus claim of deduction u/s bogus claim of deduction u/s 80GGC of the Income of the Income-tax Act, 1961 (in short ‘the Act’). T Act, 1961 (in short ‘the Act’). The Assessing Officer issued notice u/s 148A(b) Assessing Officer issued notice u/s 148A(b) and after considering after considering submission of the assessee pass submission of the assessee passed order u/s 148A(d) followed order u/s 148A(d) followed by

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notice u/s 148 of the /s 148 of the Act on 17.04.2023. In response the assessee Act on 17.04.2023. In response the assessee filed a return of income on 06.05.2023 declaring the total income of filed a return of income on 06.05.2023 declaring the total income of filed a return of income on 06.05.2023 declaring the total income of Rs. 5,01,250/-. 2.1 During the course of reassessment proceedings the During the course of reassessment proceedings the During the course of reassessment proceedings the Assessing Officer brought to the notice of the assessee that brought to the notice of the assessee that brought to the notice of the assessee that a search and seizure operation was conducted by the Directorate of Income-tax seizure operation was conducted by the Directorate of Income seizure operation was conducted by the Directorate of Income (Investigation) in the cases of certain Registered Unrecognised (Investigation) in the cases of certain Registered Unrecognised (Investigation) in the cases of certain Registered Unrecognised Political Parties (RUPPs). The material unearthed during the course Political Parties (RUPPs). The material unearthed during the course Political Parties (RUPPs). The material unearthed during the course of the search allegedly revealed a modus operandi whereby of the search allegedly revealed a modus operandi whereby of the search allegedly revealed a modus operandi whereby donations were received through banking channels and, thereafter, donations were received through banking channels and, thereafter, donations were received through banking channels and, thereafter, the corresponding amounts were withdrawn in cash and returned the corresponding amounts were withdrawn in cash and returned the corresponding amounts were withdrawn in cash and returned to the donors after retention of a commission. According to the to the donors after retention of a commission. According to the to the donors after retention of a commission. According to the Investigation Wing, the search disclosed that such entities were Investigation Wing, the search disclosed that such entities wer Investigation Wing, the search disclosed that such entities wer engaged in facilitating accommodation entries in the guise of engaged in facilitating accommodation entries in the guise of engaged in facilitating accommodation entries in the guise of political donations. During the course of the said proceedings, the political donations. During the course of the said proceedings, the political donations. During the course of the said proceedings, the political party, namely, political party, namely, Rashtriya Samajwadi Party (Secular) Rashtriya Samajwadi Party (Secular), to which the assessee had made a donation, was also stated to have which the assessee had made a donation, was also stated to which the assessee had made a donation, was also stated to been covered by the investigation. been covered by the investigation. The Assessing Officer he Assessing Officer further informed that the said political party was allegedly involved in the the said political party was allegedly involved in the the said political party was allegedly involved in the aforesaid arrangement of accepting donations through cheques, aforesaid arrangement of accepting donations through cheques, aforesaid arrangement of accepting donations through cheques, withdrawing the funds in cash, and returning the same to the withdrawing the funds in cash, and returning the same to the withdrawing the funds in cash, and returning the same to the donors after deducting commission ranging from approximately donors after deducting commission ranging from approximately donors after deducting commission ranging from approximately 1.5% to 5% of the donation amount, thereby enabling the donors to donation amount, thereby enabling the donors to donation amount, thereby enabling the donors to claim inadmissible tax benefits. In response to notice u/s 148A(b) , claim inadmissible tax benefits. In response to notice u/s 148A(b) , claim inadmissible tax benefits. In response to notice u/s 148A(b) ,

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the assessee, vide submission dated 08.04.2023, contended that the assessee, vide submission dated 08.04.2023, contended that the assessee, vide submission dated 08.04.2023, contended that the donation had been made through normal banking channels and the donation had been made through normal banking channels and the donation had been made through normal banking channels and that all the statutory conditions prescribed under section 80GGC of statutory conditions prescribed under section 80GGC of statutory conditions prescribed under section 80GGC of the Act stood duly complied with. In support of the claim, the the Act stood duly complied with. In support of the claim, the the Act stood duly complied with. In support of the claim, the assessee furnished, inter alia inter alia, a copy of the donation receipt issued , a copy of the donation receipt issued by the political party and the relevant bank statement evidencing by the political party and the relevant bank statement evidencing by the political party and the relevant bank statement evidencing the payment. 3. Thereafter, before the Thereafter, before the ld Assessing officer, the assessee ssessing officer, the assessee again filed copy of the receipt received from the said political party, the filed copy of the receipt received from the said political party, the filed copy of the receipt received from the said political party, the copy of the bank account statement and the copy of the registration copy of the bank account statement and the copy of the registration copy of the bank account statement and the copy of the registration of the impugned party from the Election party from the Election Commission of India. The Commission of India. The ld Assessing officer however, notice ssessing officer however, noticed that the said political party did that the said political party did not comply to the provision of Section 29C of the Representation of not comply to the provision of Section 29C of the Representation of not comply to the provision of Section 29C of the Representation of Peoples Act, 1951 and had not filed the Peoples Act, 1951 and had not filed the contribution contribution report for the period from financial financial year 2013-14 to 2022-23. Similarly, the said 23. Similarly, the said political party did not file political party did not file the annual report for the period for the period from financial year 2013-14 to 14 to 2022-23 and therefore assessing officer and therefore assessing officer held the conditions laid down in Section 13A of the Income the conditions laid down in Section 13A of the Income the conditions laid down in Section 13A of the Income-tax Act were not fulfilled by the said party and therefore said party was lfilled by the said party and therefore said party was lfilled by the said party and therefore said party was not entitled to claim exemption exemption on the income earned in respect to the income earned in respect to the relevant assessment year. Accordingly, the assessing Officer issued relevant assessment year. Accordingly, the assessing Officer issue relevant assessment year. Accordingly, the assessing Officer issue a show cause notice to the assessee a show cause notice to the assessee, relevant part which is relevant part which is reproduced as under: produced as under:

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“2.4 Variation proposed on the basis of inference drawn (specify the basis 2.4 Variation proposed on the basis of inference drawn (specify the basis 2.4 Variation proposed on the basis of inference drawn (specify the basis of inference and quantify the variation proposed, if possible) of inference and quantify the variation proposed, if possible) of inference and quantify the variation proposed, if possible) From the information received from the Directorate of Income tax (Investigation), From the information received from the Directorate of Income tax (Investigation), From the information received from the Directorate of Income tax (Investigation), the said party did not carry out any political activities. The incriminating material did not carry out any political activities. The incriminating material did not carry out any political activities. The incriminating material found and seized during the course of search operations and the sworn found and seized during the course of search operations and the sworn found and seized during the course of search operations and the sworn statements made by the president of the party and the other key persons statements made by the president of the party and the other key persons statements made by the president of the party and the other key persons emphasizes that the party was existent for emphasizes that the party was existent for the facilitation of the bogus donations the facilitation of the bogus donations only. Further, from the enquiries conducted by the Assessing Officer also revealed that Further, from the enquiries conducted by the Assessing Officer also revealed that Further, from the enquiries conducted by the Assessing Officer also revealed that the impugned party had not filed its Contribution Report and Annual Audit the impugned party had not filed its Contribution Report and Annual Audit the impugned party had not filed its Contribution Report and Annual Audit Statements for the FY 2013 Statements for the FY 2013-14 to 2022-23 within the prescribed time limits before escribed time limits before the Chief Electoral Office concerned. the Chief Electoral Office concerned. In view of the above, the copy of the receipt and the bank account statement does In view of the above, the copy of the receipt and the bank account statement does In view of the above, the copy of the receipt and the bank account statement does not suffice to prove the genuineness of the transaction and the onus of proving the not suffice to prove the genuineness of the transaction and the onus of proving the not suffice to prove the genuineness of the transaction and the onus of proving the genuineness of the trans genuineness of the transaction lies with the assessee. In view of the above discussion, it is hereby proposed to disallow the deduction In view of the above discussion, it is hereby proposed to disallow the deduction In view of the above discussion, it is hereby proposed to disallow the deduction under section 80GGC of the Act of Rs 4,00,000/ under section 80GGC of the Act of Rs 4,00,000/- claimed by the assessee for the claimed by the assessee for the year under consideration. In this connection, you are hereby required to show year under consideration. In this connection, you are hereby req year under consideration. In this connection, you are hereby req cause as to why the assessment shall not be completed by disallowing the claim cause as to why the assessment shall not be completed by disallowing the claim cause as to why the assessment shall not be completed by disallowing the claim of the deduction under section 80GGC of the Income Tax Act, 1961 of Rs of the deduction under section 80GGC of the Income Tax Act, 1961 of Rs of the deduction under section 80GGC of the Income Tax Act, 1961 of Rs 4,00,000/- claimed for the year under consideration and added to the total claimed for the year under consideration and added to the total claimed for the year under consideration and added to the total income for the year under consideration. ar under consideration. (Addition proposed by disallowing the claim of deduction u/s 80GGC at (Addition proposed by disallowing the claim of deduction u/s 80GGC at (Addition proposed by disallowing the claim of deduction u/s 80GGC at Rs.4,00,000/-)” 4. After considering the After considering the submission of the assessee, submission of the assessee, the ld Assessing officer rebutted rebutted the submission of the assessee and the submission of the assessee and made the disallowance, observing as under: observing as under:

“4.5. Pont-wise rebuttal of reply of the assessee including analysis of any wise rebuttal of reply of the assessee including analysis of any wise rebuttal of reply of the assessee including analysis of any case law relied upon: law relied upon: 4.5.1 In response to the show cause notice, the assessee had mad reiterated the 4.5.1 In response to the show cause notice, the assessee had mad reiterated the 4.5.1 In response to the show cause notice, the assessee had mad reiterated the same submissions made in response to the notice under same submissions made in response to the notice under section 142(1) of the section 142(1) of the Income Tax Act, 1961. The assessee submitted that the impugned political party Income Tax Act, 1961. The assessee submitted that the impugned political party Income Tax Act, 1961. The assessee submitted that the impugned political party was registered with Election Commission of India and added that he had made was registered with Election Commission of India and added that he had made was registered with Election Commission of India and added that he had made the donation claimed through banking channel. The point the donation claimed through banking channel. The point-wise rebuttal of reply wise rebuttal of reply of the assessee to the show cause notice is discussed as under: the assessee to the show cause notice is discussed as under: the assessee to the show cause notice is discussed as under:

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Now, after 4 Now, after 4-5 years, if any search is carried out by the Income Tax 5 years, if any search is carried out by the Income Tax Authority at the office of political party who is approved by Election Authority at the office of political party who is approved by Election Authority at the office of political party who is approved by Election Commission of India and Income Tax Authority and; th Commission of India and Income Tax Authority and; th Commission of India and Income Tax Authority and; thereafter if the same party was involved in activity of accommodating entry by accepting bogus party was involved in activity of accommodating entry by accepting bogus party was involved in activity of accommodating entry by accepting bogus donation, then why the genuine donation has to be disallowed to the donation, then why the genuine donation has to be disallowed to the donation, then why the genuine donation has to be disallowed to the innocent assessee, where no cash has been received after making such innocent assessee, where no cash has been received after making such innocent assessee, where no cash has been received after making such contribution. Section 80GGC of the income tax permits an individual to claim a tax GC of the income tax permits an individual to claim a tax GC of the income tax permits an individual to claim a tax deduction for any donations or contributions made towards any political deduction for any donations or contributions made towards any political deduction for any donations or contributions made towards any political party. We have claimed such deduction in our return in good faith and in party. We have claimed such deduction in our return in good faith and in party. We have claimed such deduction in our return in good faith and in bona fide manner. bona fide manner. ….. I hereby submit that I file my I hereby submit that I file my income tax return regularly and honestly income tax return regularly and honestly with all due income tax on the income earned by me during the respective with all due income tax on the income earned by me during the respective with all due income tax on the income earned by me during the respective financial year. I had made genuine contribution to Rashtriya Samajwadi financial year. I had made genuine contribution to Rashtriya Samajwadi financial year. I had made genuine contribution to Rashtriya Samajwadi Party (Secular) for a sum Party (Secular) for a sum of Rs. 4,00,000/- during FY 2018 during FY 2018-19 after going through the independent approved documents as submitted above; and my through the independent approved documents as submitted above; and my through the independent approved documents as submitted above; and my claim of deduction u/s. 80GGC is legal and as per the Law. claim of deduction u/s. 80GGC is legal and as per the Law. claim of deduction u/s. 80GGC is legal and as per the Law. The assessee had reported net income of Rs 5,01,250/ The assessee had reported net income of Rs 5,01,250/- in the return of income in the return of income filed for the year under consideration after t filed for the year under consideration after the claim of the donation of Rs he claim of the donation of Rs 4,00,000/- to an unrecognized political party and there is no proof that said to an unrecognized political party and there is no proof that said to an unrecognized political party and there is no proof that said political party is active or ever contested any regional election in state or national political party is active or ever contested any regional election in state or national political party is active or ever contested any regional election in state or national level. The assessee had donated almost 80% of his net taxable income earned to level. The assessee had donated almost 80% of his net taxabl level. The assessee had donated almost 80% of his net taxabl a paper political party. It was the duty of assessee to check and verify the a paper political party. It was the duty of assessee to check and verify the a paper political party. It was the duty of assessee to check and verify the existence of such unrecognized political party. Hence, the submission of the existence of such unrecognized political party. Hence, the submission of the existence of such unrecognized political party. Hence, the submission of the assessee is not acceptable. assessee is not acceptable. On our specific request, your honor has kind enough to On our specific request, your honor has kind enough to On our specific request, your honor has kind enough to provide us material. Kindly provide us materials gathered on conducting preliminary material. Kindly provide us materials gathered on conducting preliminary material. Kindly provide us materials gathered on conducting preliminary enquiries, if any, after obtaining information from department, which enquiries, if any, after obtaining information from department, which enquiries, if any, after obtaining information from department, which propelled your honor to form a 'reason to belief. So, we have enclosed here propelled your honor to form a 'reason to belief. So, we have enclosed here propelled your honor to form a 'reason to belief. So, we have enclosed here with evidences of donation with evidences of donation i.e. Bank statement, receipts etc Please provide i.e. Bank statement, receipts etc Please provide us opportunity of cross examination of the person(s) who may have given us opportunity of cross examination of the person(s) who may have given us opportunity of cross examination of the person(s) who may have given the adverse depositions against us and referred to in your above the adverse depositions against us and referred to in your above the adverse depositions against us and referred to in your above- mentioned letter mentioned letter The Assessing Officer had conducted the enquiries a The Assessing Officer had conducted the enquiries and obtained the status of nd obtained the status of filing of contribution report & annual report by the impugned political party and filing of contribution report & annual report by the impugned political party and filing of contribution report & annual report by the impugned political party and the same facts were duly provided to the in the show cause notice issued to him. the same facts were duly provided to the in the show cause notice issued to him. the same facts were duly provided to the in the show cause notice issued to him. Further, no depositions/statements were used against the assessee in the show Further, no depositions/statements were used against the assessee i Further, no depositions/statements were used against the assessee i cause notice issued. Hence, the question of providing cross examination does not cause notice issued. Hence, the question of providing cross examination does not cause notice issued. Hence, the question of providing cross examination does not arise.

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4.5.2 Further, as per the request of the assessee, personal hearing has been 4.5.2 Further, as per the request of the assessee, personal hearing has been 4.5.2 Further, as per the request of the assessee, personal hearing has been provided to the assessee through VC. In the VC also, the assessee had reiterated provided to the assessee through VC. In the VC also, the assessee had reiterated provided to the assessee through VC. In the VC also, the assessee had reiterated the same submissions without making any new additional evidence. the same submissions without making any new additional evidence. the same submissions without making any new additional evidence. 4.6. Conclusion drawn: 4.6. Conclusion drawn: 4.6.1 Further, the Hon'ble ITAT Surat Bench in ITA No.49/SRT/2024 upheld the 4.6.1 Further, the Hon'ble ITAT Surat Bench in ITA No.49/SRT/2024 upheld the 4.6.1 Further, the Hon'ble ITAT Surat Bench in ITA No.49/SRT/2024 upheld the disallowance of the claim of donation made to the political parties under section disallowance of the claim of donation made to the political parties under section disallowance of the claim of donation made to the political parties under section 80GGC of the Income Tax Act, 1961. Relevant extract of the order is reproduced the Income Tax Act, 1961. Relevant extract of the order is reproduced the Income Tax Act, 1961. Relevant extract of the order is reproduced hereunder:

"...7. We have considered the rival submission of both the parties and "...7. We have considered the rival submission of both the parties and "...7. We have considered the rival submission of both the parties and perused the materials available on record carefully. We have also perused the materials available on record carefully. We have also perused the materials available on record carefully. We have also deliberated on various case law reli deliberated on various case law relied by Ld. AR for the assessee and Ld. ed by Ld. AR for the assessee and Ld. Sr-DR for the Revenue. We have also seen the various documents/papers DR for the Revenue. We have also seen the various documents/papers DR for the Revenue. We have also seen the various documents/papers filed on record by assessee. We find that the assessing officer disallowed filed on record by assessee. We find that the assessing officer disallowed filed on record by assessee. We find that the assessing officer disallowed the claim of assessee under section 80GGC by taking view that notice the claim of assessee under section 80GGC by taking view that notice the claim of assessee under section 80GGC by taking view that notice under section 133(6) to the said political party, which failed to furnish their r section 133(6) to the said political party, which failed to furnish their r section 133(6) to the said political party, which failed to furnish their bank showing the transaction during the relevant bank showing the transaction during the relevant financial year and copy financial year and copy of Form-24A to Election Commissioner of India. The assessing officer also 24A to Election Commissioner of India. The assessing officer also 24A to Election Commissioner of India. The assessing officer also held that the genuineness of the held that the genuineness of the transaction and existence of said political transaction and existence of said political party is not established by the assessee. The Assessing Officer further party is not established by the assessee. The Assessing Officer further party is not established by the assessee. The Assessing Officer further held that only copy of ITR by said political party was filed on 10.08.2017, held that only copy of ITR by said political party was filed on 10.08.2017, held that only copy of ITR by said political party was filed on 10.08.2017, wherein in the statement of income for the period ended on 31.03 wherein in the statement of income for the period ended on 31.03 wherein in the statement of income for the period ended on 31.03.2016 they have shown nil amount regarding voluntary contribution, Further, as they have shown nil amount regarding voluntary contribution, Further, as they have shown nil amount regarding voluntary contribution, Further, as per information on ITBA portal about ITR of said political party, they have per information on ITBA portal about ITR of said political party, they have per information on ITBA portal about ITR of said political party, they have mentioned that no contribution is received. The Assessing Officer further mentioned that no contribution is received. The Assessing Officer further mentioned that no contribution is received. The Assessing Officer further held that even in the prece held that even in the preceding year, the assessee has paid similar ding year, the assessee has paid similar contribution of Rs.35.00 lakh to the same political party, which is also contribution of Rs.35.00 lakh to the same political party, which is also contribution of Rs.35.00 lakh to the same political party, which is also more than 40% of the gross total income. The Assessing Officer took his more than 40% of the gross total income. The Assessing Officer took his more than 40% of the gross total income. The Assessing Officer took his view that assessee is contributing almost 50% of his income in all two view that assessee is contributing almost 50% of his income in all two view that assessee is contributing almost 50% of his income in all two years to said political party and such political party has not contested any years to said political party and such political party has not contested any years to said political party and such political party has not contested any election nor they have any presence in the Regional or at National level. On election nor they have any presence in the Regional or at National level. On election nor they have any presence in the Regional or at National level. On the basis of such adverse report /material gathered by Assessing Officer, the basis of such adverse report /material gathered by Assessing Officer, the basis of such adverse report /material gathered by Assessing Officer, the Assessing Officer disal the Assessing Officer disallowed the entire donation of Rs. 50.00 lakh lowed the entire donation of Rs. 50.00 lakh under section 80GGC. under section 80GGC. 8. We find that before Id CIT(A) the assessee has not given any specific 8. We find that before Id CIT(A) the assessee has not given any specific 8. We find that before Id CIT(A) the assessee has not given any specific evidence or pleaded facts otherwise than pleaded before assessing officer evidence or pleaded facts otherwise than pleaded before assessing officer evidence or pleaded facts otherwise than pleaded before assessing officer except on relying on certain case laws, whic except on relying on certain case laws, which has been distinguish by Id h has been distinguish by Id CIT(A) on the basis of specific facts of those cases. We find that the Id CIT(A) on the basis of specific facts of those cases. We find that the Id CIT(A) on the basis of specific facts of those cases. We find that the Id CIT(A) held that the Assessing Officer brought sufficient information and CIT(A) held that the Assessing Officer brought sufficient information and CIT(A) held that the Assessing Officer brought sufficient information and evidence before issued show cause notice to assessee. The assessee has evidence before issued show cause notice to assessee. The assessee has evidence before issued show cause notice to assessee. The assessee has earned gross total income of Rs. 1.08 crores out of which Rs.50.00 lakh ross total income of Rs. 1.08 crores out of which Rs.50.00 lakh ross total income of Rs. 1.08 crores out of which Rs.50.00 lakh was donated to unrecognized political party. There is no evidence that said was donated to unrecognized political party. There is no evidence that said was donated to unrecognized political party. There is no evidence that said

Manoj Jayram Sarang 9 ITA No. 2531/MUM/2026

political party is active or ever contested any regional election in state or political party is active or ever contested any regional election in state or political party is active or ever contested any regional election in state or national level. The assessee has not e national level. The assessee has not explained as to how he came with the xplained as to how he came with the contract with such political party and why such huge donation made to contract with such political party and why such huge donation made to contract with such political party and why such huge donation made to them. The Id CIT(A) held the assessee has not furnished anything either in them. The Id CIT(A) held the assessee has not furnished anything either in them. The Id CIT(A) held the assessee has not furnished anything either in the assessment proceedings or appellate proceedings as to why he the assessment proceedings or appellate proceedings as to why he the assessment proceedings or appellate proceedings as to why he donated almost his half gross total income earned to a paper political party most his half gross total income earned to a paper political party most his half gross total income earned to a paper political party about whom he does not even basis fact. The Id CIT(A) also held that the about whom he does not even basis fact. The Id CIT(A) also held that the about whom he does not even basis fact. The Id CIT(A) also held that the assessing Officer has brought more than sufficient material to prove that assessing Officer has brought more than sufficient material to prove that assessing Officer has brought more than sufficient material to prove that the done is a paper political party which the done is a paper political party which is not recognized by Election is not recognized by Election Commissioner of India and have no address or infrastructure nor filed Commissioner of India and have no address or infrastructure nor filed Commissioner of India and have no address or infrastructure nor filed annual account to State Election Commissioner or Election Commissioner of annual account to State Election Commissioner or Election Commissioner of annual account to State Election Commissioner or Election Commissioner of India and confirmed the additions made by assessing officer. India and confirmed the additions made by assessing officer. India and confirmed the additions made by assessing officer. 9. We find that the I 9. We find that the Id CIT(A) distinguished the case law relied by d CIT(A) distinguished the case law relied by assessee. In case of Soni Ishwarlal Harjivandas (supra) the Ld.CIT(A), find assessee. In case of Soni Ishwarlal Harjivandas (supra) the Ld.CIT(A), find assessee. In case of Soni Ishwarlal Harjivandas (supra) the Ld.CIT(A), find that in the said case, the political party furnished the statutory form and it that in the said case, the political party furnished the statutory form and it that in the said case, the political party furnished the statutory form and it was notified by Election Commissioner of India and Elec was notified by Election Commissioner of India and Elec was notified by Election Commissioner of India and Election Commissioner of India certified that said Rashtriya Vikas Party was a recognized of India certified that said Rashtriya Vikas Party was a recognized of India certified that said Rashtriya Vikas Party was a recognized National Political Party. However, in the present case, said political party National Political Party. However, in the present case, said political party National Political Party. However, in the present case, said political party is an unrecognized political party. Confirmation was filed about the is an unrecognized political party. Confirmation was filed about the is an unrecognized political party. Confirmation was filed about the donation to political pa donation to political party. In another case of Pavan Anil Bakeriv v. DCIT Pavan Anil Bakeriv v. DCIT (supra) the assessing officer found the bank account of the said political (supra) the assessing officer found the bank account of the said political (supra) the assessing officer found the bank account of the said political party for providing accommodation entry. party for providing accommodation entry. 10. We have independently examined the facts of the present case. We 10. We have independently examined the facts of the present case. We 10. We have independently examined the facts of the present case. We find that the assess find that the assessee has not replied to basic question and the objection ee has not replied to basic question and the objection raised by the assessing officer about his doubt on the genuineness of raised by the assessing officer about his doubt on the genuineness of 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 contribution to such political party, except claiming that it is not his duty to contribution to such political party, except claiming that it is not his duty to verify the affairs of such political party. It is verify the affairs of such political party. It is not the case of the assessee not the case of the assessee that he is one of the main officer bearer or having any organisational post that he is one of the main officer bearer or having any organisational post 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 either at the District level or State level in the said political party. Even the 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 assessee has not provided the details of his bank account or the bank 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 account of such political party. Before us, the assessee has filed copy of 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 receipt of contribution/ donation to the said political party alongwith the receipt of contribution/ donation to the said political party alongwith the bank statement. No certificate is furnished in the form of verification of the bank statement. No certificate is furnished in the form of verification of the bank statement. No certificate is furnished in the form of verification of list of documents, if suc list of documents, if such bank statement is filed before lower authorities. h bank statement is filed before lower authorities. Filing of such documents which were not certified, if filed before lower Filing of such documents which were not certified, if filed before lower Filing of such documents which were not certified, if filed before lower authorities, is not permissible. In view of the aforesaid factual discussions, authorities, is not permissible. In view of the aforesaid factual discussions, authorities, is not permissible. In view of the aforesaid factual discussions, we do not find any merit in the grounds of appeal ra we do not find any merit in the grounds of appeal raised by the assessee. ised by the assessee. 11. The case laws relied by the Id AR for for the assessee is not helpful to 11. The case laws relied by the Id AR for for the assessee is not helpful to 11. The case laws relied by the Id AR for for the assessee is not helpful to the assessee as the facts of the case in hand is quite distinguishable on the assessee as the facts of the case in hand is quite distinguishable on the assessee as the facts of the case in hand is quite distinguishable on facts. In case of CIT vs. Armee Infotech (supra), the assessee is the said facts. In case of CIT vs. Armee Infotech (supra), the assessee is the said facts. In case of CIT vs. Armee Infotech (supra), the assessee is the said case made donation to six different entity including to the said political e donation to six different entity including to the said political e donation to six different entity including to the said political party of Rs. 55.00 lakhs. Besides that, the said assessee also paid party of Rs. 55.00 lakhs. Besides that, the said assessee also paid party of Rs. 55.00 lakhs. Besides that, the said assessee also paid contribution/donation to Akhil Bhiatriya Hindu Mahasabha, Lok Jan contribution/donation to Akhil Bhiatriya Hindu Mahasabha, Lok Jan contribution/donation to Akhil Bhiatriya Hindu Mahasabha, Lok Jan Shakti and other Charitable organisation. That assessee Shakti and other Charitable organisation. That assessee Shakti and other Charitable organisation. That assessee has paid total

Manoj Jayram Sarang 10 ITA No. 2531/MUM/2026

donation of Rs. 6.79 Crore to various organisation and the donation to donation of Rs. 6.79 Crore to various organisation and the donation to donation of Rs. 6.79 Crore to various organisation and the donation to impugned political party is only 8 or 9% of their total donation. The said impugned political party is only 8 or 9% of their total donation. The said impugned political party is only 8 or 9% of their total donation. The said assessee is corporate entity, on the other hand the assessee is individual assessee is corporate entity, on the other hand the assessee is individual assessee is corporate entity, on the other hand the assessee is individual and has allegedly d and has allegedly donated his 50% of his total income. Moreover, in the onated his 50% of his total income. Moreover, in the said case the assessing officer has not brought such adverse material said case the assessing officer has not brought such adverse material said case the assessing officer has not brought such adverse material against the political as has been brought in the present case. In other case against the political as has been brought in the present case. In other case against the political as has been brought in the present case. In other case relied by the assessee in Soni Ishwarlal Harjivandas Vs relied by the assessee in Soni Ishwarlal Harjivandas Vs relied by the assessee in Soni Ishwarlal Harjivandas Vs DCIT (supra), we find that Id CIT(A) has already distinguished the facts of said case find that Id CIT(A) has already distinguished the facts of said case find that Id CIT(A) has already distinguished the facts of said case wherein he held that the political party namely Rashtriya Vikas Party has wherein he held that the political party namely Rashtriya Vikas Party has wherein he held that the political party namely Rashtriya Vikas Party has furnished the statutory form and it was notified by Election Commissioner furnished the statutory form and it was notified by Election Commissioner furnished the statutory form and it was notified by Election Commissioner of India and Election of India and Election Commissioner of India certified that said Rashtriya Commissioner of India certified that said Rashtriya Vikas Party was a recognized National Political Party. However, in the Vikas Party was a recognized National Political Party. However, in the Vikas Party was a recognized National Political Party. However, in the present case, the impugned political party is an unrecognized political present case, the impugned political party is an unrecognized political present case, the impugned political party is an unrecognized political party. Thus, we do not find any merits in the submissions of party. Thus, we do not find any merits in the submissions of party. Thus, we do not find any merits in the submissions of the Id AR for the assessee. In the result, the grounds of appeal raised by the assessee the assessee. In the result, the grounds of appeal raised by the assessee the assessee. In the result, the grounds of appeal raised by the assessee are dismissed. are dismissed. 12. In the result, appeal of assessee is dismissed". 12. In the result, appeal of assessee is dismissed". 4.6.2 Further, the Hon'ble ITAT Rajkot Bench in ITA No.93/RJT/2023, dismissed 4.6.2 Further, the Hon'ble ITAT Rajkot Bench in ITA No.93/RJT/2023, dismissed 4.6.2 Further, the Hon'ble ITAT Rajkot Bench in ITA No.93/RJT/2023, dismissed the appeal against the the appeal against the revision under section 263 of the Income Tax Act, 1961 in revision under section 263 of the Income Tax Act, 1961 in the similar grounds of donation to same registered unrecognized political party similar grounds of donation to same registered unrecognized political party similar grounds of donation to same registered unrecognized political party {M/s Rashtriya Samajwadi Party (Secular)}. {M/s Rashtriya Samajwadi Party (Secular)}. 22. Now, we shall also adjudicate the other arguments advanced by Id. 22. Now, we shall also adjudicate the other arguments advanced by Id. 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 or the revenue to the effect that "fraud vitiates everything". In this or the revenue to the effect that "fraud vitiates everything". In this connection, at the cost of repetition, we reiterate the findings of Id PCIT, connection, at the cost of repetition, we reiterate the findings of Id PCIT, connection, at the cost of repetition, we reiterate the findings of Id PCIT, which are as follows: which are as follows: (i) Rashtriya Samajwadi Party (Secular) is a Registered Unrecognized (i) Rashtriya Samajwadi Party (Secular) is a Registered Unrecognized (i) Rashtriya Samajwadi Party (Secular) is a Registered Unrecognized Political Party a Political Party and it is one of the 23 RUPPs covered in the RUPPs Group of nd 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 Ahmedabad. This party was established on 21.10.2008 and its registered Ahmedabad. This party was established on 21.10.2008 and its registered address as per its website is Samruddhi Complex, Opp address as per its website is Samruddhi Complex, Opp address as per its website is Samruddhi Complex, Opp-Sakar-3, Income Tax Circle, Ahmedabad. However, during pre Tax Circle, Ahmedabad. However, during pre-search enquiry search enquiry, no party office is found at the aforesaid address. office is found at the aforesaid address. (ii) The modus (ii) The modus-operandi of this political party is that the donation is operandi of this political party is that the donation is received through cheque in the bank account of the party and then routed received through cheque in the bank account of the party and then routed received through cheque in the bank account of the party and then routed through intermediary(ies) (which is generally shell entity through intermediary(ies) (which is generally shell entity 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 either the persons running the party or by any other person) in the garb of 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 various purchases or other payments, which are found to be bogus in 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 nature. It is pertinent to mention here that the political party doesn't pay nature. It is pertinent to mention here that the political party doesn't pay any tax since i 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 (iii) During the search proceedings, on 07.09.2022, statement on oath u/s (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 132(4) of the I.T. Act, was recorded of Smt. Sandhya Singh, National Party 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 President of the Rashtriya Samajwadi Party (Secular). As evident from the President of the Rashtriya Samajwadi Party (Secular). As evident from the

Manoj Jayram Sarang 11 ITA No. 2531/MUM/2026

declaration made on oath by Smt. Sandhya Singh that although she is eclaration made on oath by Smt. Sandhya Singh that although she is eclaration made on oath by Smt. Sandhya Singh that although she is national party president of the party, however, all the work related with national party president of the party, however, all the work related with national party president of the party, however, all the work related with party is being looked party is being looked-after by her husband Shri Bishwajeet Singh. She after by her husband Shri Bishwajeet Singh. She was not aware about any activity of the party was not aware about any activity of the party. Further, vide Q. No. 18 and . Further, vide Q. No. 18 and 19, she was categorically asked regarding details of bank accounts, books 19, she was categorically asked regarding details of bank accounts, books 19, she was categorically asked regarding details of bank accounts, books of accounts, nature and quantum of the expenditures of the Rashtriya, of accounts, nature and quantum of the expenditures of the Rashtriya, 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 Samajwadi Party. In reply to the same, she again stated that she is not 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 ny details regarding these subjects. She stated that all these ny details regarding these subjects. She stated that all these things are being handled by her husband Shri Bishwajeet Singh. things are being handled by her husband Shri Bishwajeet Singh. 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 (iv) It is on record that statement of Shri Bishwajeet Singh, on oath u/s (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. Duri 132(4) of the I.T. Act, was recorded on 07.09.2022. Duri 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, proceedings, Shri Bishwajeet Singh admitted the fact that on his instance, proceedings, Shri Bishwajeet Singh admitted the fact that on his instance, his wife Smt. Sandhya Singh joined RSP, as president. During the his wife Smt. Sandhya Singh joined RSP, as president. During the his wife Smt. Sandhya Singh joined RSP, as president. During the statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. RSP is involved in bogus RSP is involved in bogus donations scam across India and founder of donations scam across India and founder of party i.e. Shri Surya, Nath Chaturvedi carried out bogus donations scam since i.e. Shri Surya, Nath Chaturvedi carried out bogus donations scam since i.e. Shri Surya, Nath Chaturvedi carried out bogus donations scam since inception of the party. He further stated that after deducting certain inception of the party. He further stated that after deducting certain inception of the party. He further stated that after deducting certain commission donations are being returned to the donors. commission donations are being returned to the donors. commission donations are being returned to the donors. (v) Furthermore, Shri Bishwajeet Singh stated that these affairs are also Furthermore, Shri Bishwajeet Singh stated that these affairs are also Furthermore, Shri Bishwajeet Singh stated that these affairs are also being handled by the Shri Ritesh Shah. Siri Bishwajit Singh submitted list being handled by the Shri Ritesh Shah. Siri Bishwajit Singh submitted list being handled by the Shri Ritesh Shah. Siri Bishwajit Singh submitted list of some bogus entities used for cash generation, which is reproduced by Id of some bogus entities used for cash generation, which is reproduced by Id of some bogus entities used for cash generation, which is reproduced by Id PCIT on page number 13 of his order. PCIT on page number 13 of his order. (vi) During the post search inquiries, statement of Shri Amitkumar (vi) During the post search inquiries, statement of Shri Amitkumar (vi) During the post search inquiries, statement of Shri Amitkumar Chaturvedi (AHLPC7736R), past president of political party was also Chaturvedi (AHLPC7736R), past president of political party was also Chaturvedi (AHLPC7736R), past president of political party was also recorded, he categorically admitted that the party was engaged in bogus recorded, he categorically admitted that the party was engaged in bogus recorded, he categorically admitted that the party was engaged in bogus donations scam. donations scam. (vii). It is relevant to refer t (vii). It is relevant to refer to the fact that on verification with the website of o the fact that on verification with the website of regional Chief Electoral Officer where the party is registered i.e. CEO, regional Chief Electoral Officer where the party is registered i.e. CEO, regional Chief Electoral Officer where the party is registered i.e. CEO, Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) has not filed any contribution report, since F.Y. 2013 has not filed any contribution report, since F.Y. 2013-14 14 onward. (viii). The party been claiming wrong and invalid exemption, over the years (viii). The party been claiming wrong and invalid exemption, over the years (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 under section 13A of the I.T. Act but it has also been, mentioning in its under section 13A of the I.T. Act but it has also been, mentioning in its Income Tax Return of F.Y. 2018 Income Tax Return of F.Y. 2018-19 that no contribution report has been 19 that no contribution report has been filed u/s 29C of the R.P. filed u/s 29C of the R.P. Act, 1951. (ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as (ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as (ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as informed by Id Counsel for the assessee, with Election Commission of informed by Id Counsel for the assessee, with Election Commission of informed by Id Counsel for the assessee, with Election Commission of India/R.P. Act, 1951. India/R.P. Act, 1951. (x) There is no retraction of statements given by Smt. Sandhay Singh, Shri (x) There is no retraction of statements given by Smt. Sandhay Singh, Shri (x) There is no retraction of statements given by Smt. Sandhay Singh, Shri Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct and valid.

Manoj Jayram Sarang 12 ITA No. 2531/MUM/2026

Manoj Jayram Sarang 13 ITA No. 2531/MUM/2026

judgment/decree by the first court or by the highest court judgment/decree by the first court or by the highest court judgment/decree by the first court or by the highest court has to be treated as a nullity by every court, whether has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in superior or inferior. It can be challenged in a collateral proceedings." 21. In the said case it was clearly stated that the courts of 21. In the said case it was clearly stated that the courts law are meant for imparting justice between the parties and law are meant for imparting justice between the parties and one who comes to the court, must come with clean hands. A one who comes to the court, must come with clean hands. A person whose case is based on falsehood has no right to ehood has no right to approach the Court. A litigant who approaches the court, is approach the Court. A litigant who approaches the court, is bound to produce all the documents executed by him which bound to produce all the documents executed by him which are relevant to the litigation. If a vital document is withheld are relevant to the litigation. If a vital document is withheld in order to gain advantage on the other side he would be in order to gain advantage on the other side he would guilty of playing fraud on court as well as on the opposite guilty of playing fraud on court as well as on the opposite party. 22. In Smt. Shrist Dhawan v. M/s. Shaw Brothers [AIR 1992 22. In Smt. Shrist Dhawan v. M/s. Shaw Brothers [AIR 1992 SC 1555] it has been opined that fraud and collusion vitiate SC 1555] it has been opined that fraud and collusion vitiate even the most solemn proceedings in any civilised system of even the most solemn proceedings in any civilised system of jurisp jurisprudence. It has been defined as an act of trickery or rudence. It has been defined as an act of trickery or deceit. The aforesaid principle has been reiterated in Roshan deceit. The aforesaid principle has been reiterated in Roshan Deen v. Preeti Lal [AIR 2002 SC 33], Ram Preeti Yadav v. U. Deen v. Preeti Lal [AIR 2002 SC 33], Ram Preeti Yadav v. U. P. Board of High School and Intermediate Education and P. Board of High School and Intermediate Education and other [(2003) 8 SC 311] and Ram Chandra Singh v. Savitri nd Ram Chandra Singh v. Savitri Devi and others [(2003) 8 SCC 319]. 23. In State of Andhra Pradesh and another v. T. 23. In State of Andhra Pradesh and another v. T. Suryachandra Rao [AIR 2005 SC 3110] after referring to the Suryachandra Rao [AIR 2005 SC 3110] after referring to the earlier decision this court observed as follows:-"In Lazaurs earlier decision this court observed as follows: Estate Ltd. v. Beasley [(1956) 1 QB 702] Lord Denning ley [(1956) 1 QB 702] Lord Denning observed at pages 712 & 713, "No judgment of a Court, no observed at pages 712 & 713, "No judgment of a Court, no order of a Minister can be allowed to stand if it has been order of a Minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything." In the same obtained by fraud. Fraud unravels everything." In the same judgment Lord Parker LJ observed that fraud vitiates all judgment Lord Parker LJ observed that fraud vi judgment Lord Parker LJ observed that fraud vi transactions known to the law of however high a degree of transactions known to the law of however high a degree of solemnity." 24. Yet in another decision Hamza Haji v. State of Kerala 24. Yet in another decision Hamza Haji v. State of Kerala &Anr. [AIR 2006 SC 3028] it has been held that no court will &Anr. [AIR 2006 SC 3028] it has been held that no court will allow itself to be used as an instrument of fraud and no allow itself to be used as an instrument of fraud and no court, by way of rule of evidence and procedure, can allow court, by way of rule of evidence and procedure, can allow its eyes to be closed to the fact it is being used as an its eyes to be closed to the fact it is being used as an instrument of fraud. The basic principle is that a party who instrument of fraud. The basic principle is that a party who secures the judgment by taking recourse to fraud should not secures the judgment by taking recourse to fraud should not be enabled to enjoy the fruits thereof."

Manoj Jayram Sarang 14 ITA No. 2531/MUM/2026

“5.1 I have carefully perused the 'Form 35', the grounds of appeal and the I have carefully perused the 'Form 35', the grounds of appeal and the I have carefully perused the 'Form 35', the grounds of appeal and the Statement of Facts as well as impugned assessment order. Statement of Facts as well as impugned assessment order. 5.2.1. Briefly stating the background of the case, appellant is a salaried 5.2.1. Briefly stating the background of the case, appellant is a salaried 5.2.1. Briefly stating the background of the case, appellant is a salaried individual working during the year with a M/s JP Morgan Services India Pvt. Ltd. individual working during the year with a M/s JP Morgan Services India Pvt. Ltd. individual working during the year with a M/s JP Morgan Services India Pvt. Ltd. Originally the appellant had filed his Return of Income (Rol) on 14.07.2019 for the Originally the appellant had filed his Return of Income (Rol) on 14.07.2019 for the Originally the appellant had filed his Return of Income (Rol) on 14.07.2019 for the A.Y. 2019-20 declaring Total Income of Rs.5,01,250/ laring Total Income of Rs.5,01,250/-. Subsequently, the AO . Subsequently, the AO received information, disseminated by the Investigation Wing that the appellant received information, disseminated by the Investigation Wing that the appellant received information, disseminated by the Investigation Wing that the appellant

Manoj Jayram Sarang 15 ITA No. 2531/MUM/2026

had made availed accommodation entry of bogus claim of deduction u/s 80GGC, had made availed accommodation entry of bogus claim of deduction u/s 80GGC, had made availed accommodation entry of bogus claim of deduction u/s 80GGC, the AO issued notice and order u/s 148A(b the AO issued notice and order u/s 148A(b) and 148A(d) respectively; and finally, ) and 148A(d) respectively; and finally, a notice u/s 148 was issued on 17.04.2023. It is important to note that the a notice u/s 148 was issued on 17.04.2023. It is important to note that the a notice u/s 148 was issued on 17.04.2023. It is important to note that the appellant had responded to notice u/s 148A(b), by submission dated 08.04.23 appellant had responded to notice u/s 148A(b), by submission dated 08.04.23 appellant had responded to notice u/s 148A(b), by submission dated 08.04.23 which has considered by the AO before passing order u/s 148A(d) and then the which has considered by the AO before passing order u/s 148A(d) which has considered by the AO before passing order u/s 148A(d) notice u/s 148 has been issued on 17.04.2023. In response to the notice u/s 148, notice u/s 148 has been issued on 17.04.2023. In response to the notice u/s 148, notice u/s 148 has been issued on 17.04.2023. In response to the notice u/s 148, the appellant filed his Rol on 06.05.2023 declaring Total Income of Rs. 5,01,250/- the appellant filed his Rol on 06.05.2023 declaring Total Income of Rs. 5,01,250/ the appellant filed his Rol on 06.05.2023 declaring Total Income of Rs. 5,01,250/ . The re-assessment proceedings set in motion by the AO culminated in passage assessment proceedings set in motion by the AO culminated in passage assessment proceedings set in motion by the AO culminated in passage of an order u/s 147 r.w.s. 144B on 10.12.2024 where additions of Rs.4,00,000/ f an order u/s 147 r.w.s. 144B on 10.12.2024 where additions of Rs.4,00,000/- f an order u/s 147 r.w.s. 144B on 10.12.2024 where additions of Rs.4,00,000/ was made by way of disallowance of claim of deduction u/s 80GGC. Impugning was made by way of disallowance of claim of deduction u/s 80GGC. Impugning was made by way of disallowance of claim of deduction u/s 80GGC. Impugning such order and the additions, the appellant has preferred this appeal. such order and the additions, the appellant has preferred this appeal. such order and the additions, the appellant has preferred this appeal. 5.3.1. In the background of the 5.3.1. In the background of the reopening u/s 147/148 and disallowance of claim reopening u/s 147/148 and disallowance of claim u/s 80GGC in this case; is a search action u/s 132 where a systemic racket of u/s 80GGC in this case; is a search action u/s 132 where a systemic racket of u/s 80GGC in this case; is a search action u/s 132 where a systemic racket of bogus accommodation entries of 'donation to political party' was uncovered and bogus accommodation entries of 'donation to political party' was uncovered and bogus accommodation entries of 'donation to political party' was uncovered and beneficiaries' information was disseminated by the beneficiaries' information was disseminated by the investigation wing. During a investigation wing. During a search action u/s 132 in the case of 'RUPPs group of Ahmadabad' on 07.09.2022 search action u/s 132 in the case of 'RUPPs group of Ahmadabad' on 07.09.2022 search action u/s 132 in the case of 'RUPPs group of Ahmadabad' on 07.09.2022 where a total Twenty where a total Twenty-Three (23) Registered Unrecognized Political Parties (RUPPs) Three (23) Registered Unrecognized Political Parties (RUPPs) were discovered which were using Thirty were discovered which were using Thirty-Five (35) bogus intermediar Five (35) bogus intermediary entities and Three (3) major exit providers were used for providing bogus claim of and Three (3) major exit providers were used for providing bogus claim and Three (3) major exit providers were used for providing bogus claim deduction u/s 80GGC. It was revealed during the search proceedings that upon deduction u/s 80GGC. It was revealed during the search proceedings that upon deduction u/s 80GGC. It was revealed during the search proceedings that upon receipt of donation through cheque/RTGS/NEFT in the RUPP entities' bank receipt of donation through cheque/RTGS/NEFT in the RUPP entities' bank receipt of donation through cheque/RTGS/NEFT in the RUPP entities' bank account, the money wou account, the money would be routed through various layers and finally returned ld be routed through various layers and finally returned to the original donors primarily in the form of cash. For such transaction, the to the original donors primarily in the form of cash. For such transaction, the to the original donors primarily in the form of cash. For such transaction, the beneficiary would incur expenditure of commission at the rate of 1.5% to 5% of the beneficiary would incur expenditure of commission at the rate of 1.5% to 5% of the beneficiary would incur expenditure of commission at the rate of 1.5% to 5% of the amount of entry for bogus claim. It amount of entry for bogus claim. It is pertinent to note that political parties are is pertinent to note that political parties are exempt from income tax as per section 13A and a donor gets deduction u/s exempt from income tax as per section 13A and a donor gets deduction u/s exempt from income tax as per section 13A and a donor gets deduction u/s 80GGB/80GGC. This appellant had claimed such deduction u/s 80GGC by 80GGB/80GGC. This appellant had claimed such deduction u/s 80GGC by 80GGB/80GGC. This appellant had claimed such deduction u/s 80GGC by obtaining accommodation entry of 'Political Donation' of Rs.4,00,000/- to obtaining accommodation entry of 'Political Donation' of Rs.4,00,00 obtaining accommodation entry of 'Political Donation' of Rs.4,00,00 'Rashtriya Samajwati Party Secular' during F.Y 2018 'Rashtriya Samajwati Party Secular' during F.Y 2018-19 relevant to AY 2019 19 relevant to AY 2019-20. 5.3.2. During the impugned re 5.3.2. During the impugned re-assessment proceedings, the appellant made assessment proceedings, the appellant made written submission online and claim about bonafide of the donation which was written submission online and claim about bonafide of the donation which was written submission online and claim about bonafide of the donation which was found untenable and found untenable and therefore, the AO made the addition impugned here. Now, therefore, the AO made the addition impugned here. Now, during the appellate proceedings, the appellant has reiterated the similar claims during the appellate proceedings, the appellant has reiterated the similar claims during the appellate proceedings, the appellant has reiterated the similar claims which are carefully perused and found to be legally and factually untenable. which are carefully perused and found to be legally and factually untenable. which are carefully perused and found to be legally and factually untenable. 5.3.3 At the outset, it would be pertinen 5.3.3 At the outset, it would be pertinent to note that the AO had undertook the t to note that the AO had undertook the enquiry by way of notice u/s 148A(b) whereby the background and context of the enquiry by way of notice u/s 148A(b) whereby the background and context of the enquiry by way of notice u/s 148A(b) whereby the background and context of the case/enquiry was explicitly communicated to the appellant. The appellant, in case/enquiry was explicitly communicated to the appellant. The appellant, in case/enquiry was explicitly communicated to the appellant. The appellant, in fact, responded to such notice u/s 148A(b) by way of his rep fact, responded to such notice u/s 148A(b) by way of his reply dated 08.04.2023. ly dated 08.04.2023. The AO found the reply unacceptable and not satisfactory, hence, re-assessment The AO found the reply unacceptable and not satisfactory, hence, re The AO found the reply unacceptable and not satisfactory, hence, re proceedings were undertaken by way of notice u/s 148. proceedings were undertaken by way of notice u/s 148. 5.3.4 Here, it is pertinent to recall the settled law that reopening of an 5.3.4 Here, it is pertinent to recall the settled law that reopening of an 5.3.4 Here, it is pertinent to recall the settled law that reopening of an assessment in view of speci assessment in view of specific information from the Investigation Wing, about fic information from the Investigation Wing, about wrong claim allowed or income not disclosed in a case, is a valid action as held wrong claim allowed or income not disclosed in a case, is a valid action as held wrong claim allowed or income not disclosed in a case, is a valid action as held

Manoj Jayram Sarang 16 ITA No. 2531/MUM/2026

by several judicial authorities of the land. We may recall here ratio emanating by several judicial authorities of the land. We may recall here ratio emanating by several judicial authorities of the land. We may recall here ratio emanating f India in the case of ITO Vs from decision of the Hon'ble Supreme Court o from decision of the Hon'ble Supreme Court of India in the case of Purushottam Das Bangur (1997) 90 Taxman 541 (SC) Purushottam Das Bangur (1997) 90 Taxman 541 (SC) wherein it was held that the letter of Deputy Director of Investigation giving information that low that the letter of Deputy Director of Investigation giving information that low that the letter of Deputy Director of Investigation giving information that low quotation on stock exchange of a company's share was an artificial manipulation quotation on stock exchange of a company's share was an artificial manipulati quotation on stock exchange of a company's share was an artificial manipulati in view of the facts and in view of the facts and figures showing that the company was prospering at that figures showing that the company was prospering at that time, was a valid information from which the Assessing Officer could have reason time, was a valid information from which the Assessing Officer could have reason time, was a valid information from which the Assessing Officer could have reason to believe that income chargeable to tax had escaped assessment for the relevant to believe that income chargeable to tax had escaped assessment for the relevant to believe that income chargeable to tax had escaped assessment for the relevant Hon'ble High Court of Gujarat in the case of Pushpak Bullion (P.) Ltd. Pushpak Bullion (P.) Ltd. year. The Hon'ble High Court of Gujarat in the case of Vs DCIT [2017] 85 taxmann. com 84 (Gujarat) Vs DCIT [2017] 85 taxmann. com 84 (Gujarat) held that Where investigation held that Where investigation wing of department had during course of investigation in case of a third party wing of department had during course of investigation in case of a third party wing of department had during course of investigation in case of a third party found that he was indulged in pr found that he was indulged in providing accommodation entries and bogus bills, oviding accommodation entries and bogus bills, and assessee had made sizeable purchases from him, reopening notice against and assessee had made sizeable purchases from him, reopening notice against and assessee had made sizeable purchases from him, reopening notice against assessee was justified. The Hon'ble Supreme Court in the case of Paramount assessee was justified. The Hon'ble Supreme Court in the case of assessee was justified. The Hon'ble Supreme Court in the case of Communication (P.) Ltd. Vs PCIT 2017] reported in 84 taxmann.com 300 Communication (P.) Ltd. Vs PCIT 2017] reported in 84 taxma Communication (P.) Ltd. Vs PCIT 2017] reported in 84 taxma (SC)/[2017] 250 Taxman 100 (SC), (SC)/[2017] 250 Taxman 100 (SC), 2017-TIOL-253-SCIT dismissed the SLP of SCIT dismissed the SLP of the appellant upholding the order of the High Court wherein it was held that the appellant upholding the order of the High Court wherein it was held that the appellant upholding the order of the High Court wherein it was held that information regarding bogus purchase by appellant received by DRI from CCE information regarding bogus purchase by appellant received by DRI from CCE information regarding bogus purchase by appellant received by DRI from CCE which was passed on which was passed on to revenue authorities was 'tangible material outside to revenue authorities was 'tangible material outside record' to initiate valid reassessment proceedings. Similarly, the Hon'ble High record' to initiate valid reassessment proceedings. Similarly, the Hon'ble High record' to initiate valid reassessment proceedings. Similarly, the Hon'ble High Court of Gujarat in the case of Aaspas Multimedia Ltd. Vs DCIT (2017) 83 Aaspas Multimedia Ltd. Vs DCIT (2017) 83 Court of Gujarat in the case of taxmann.com 82 (Gujarat) taxmann.com 82 (Gujarat) held that where reassessment was made on basis ment was made on basis of information received from Principal DIT (Investigation) that assessee was of information received from Principal DIT (Investigation) that assessee was of information received from Principal DIT (Investigation) that assessee was beneficiary of accommodation entries by way of share application provided by a beneficiary of accommodation entries by way of share application provided by a beneficiary of accommodation entries by way of share application provided by a third party, same was justified. The Hon'ble High Court of Delhi in the case of third party, same was justified. The Hon'ble High Court of Delhi in the case third party, same was justified. The Hon'ble High Court of Delhi in the case Pratibha Finvest (P) Ltd. Vs ITO (2013) 29 taxmann.com 420 (Delhi) held Pratibha Finvest (P) Ltd. Vs ITO (2013) 29 taxmann.com 420 (Delhi) Pratibha Finvest (P) Ltd. Vs ITO (2013) 29 taxmann.com 420 (Delhi) that the reopening of assessment on basis of investigation report in case of that the reopening of assessment on basis of investigation report in case of that the reopening of assessment on basis of investigation report in case of search on third parties revealing accommodation entries received by assessee, search on third parties revealing accommodation entries received by assessee, search on third parties revealing accommodation entries received by assessee, was justified. Hon'ble Supreme Court in the case of Raymond Woollen Mills Raymond Woollen Mills was justified. Hon'ble Sup Ltd. Vs Income-tax Officer [1999] 236 ITR 34 (SC) tax Officer [1999] 236 ITR 34 (SC) held that the Department held that the Department can reopen a case on the basis of some prima facie material and sufficiency or can reopen a case on the basis of some prima facie material and sufficiency or can reopen a case on the basis of some prima facie material and sufficiency or correctness of the material is not a thing to be consi correctness of the material is not a thing to be considered at that stage. The dered at that stage. The Hon'ble ITAT, Chennai in the case of Hon'ble ITAT, Chennai in the case of Pradeep Dayanand Kothari Vs ACIT Pradeep Dayanand Kothari Vs ACIT (2016) 69 taxmann. com 408 (Chennai (2016) 69 taxmann. com 408 (Chennai-Trib) held that at the stage of issue of held that at the stage of issue of notice u/s 148 only question is whether there was relevant material on which a notice u/s 148 only question is whether there was relevant material on which a notice u/s 148 only question is whether there was relevant material on which a reasonable person could have formed a requisite belief, material conclusively nable person could have formed a requisite belief, material conclusively nable person could have formed a requisite belief, material conclusively proving escapement is not concerned at the time of reopening of assessment. proving escapement is not concerned at the time of reopening of assessment. proving escapement is not concerned at the time of reopening of assessment. 5.3.5. The appellant is a salaried employee of a M/s JP Morgan Services India 5.3.5. The appellant is a salaried employee of a M/s JP Morgan Services India 5.3.5. The appellant is a salaried employee of a M/s JP Morgan Services India Pvt. Ltd. The information in Pvt. Ltd. The information in public domain shows that this a subsidiary company public domain shows that this a subsidiary company that "serves as a global service center for its parent company, JPMorgan Chase & that "serves as a global service center for its parent company, JPMorgan Chase & that "serves as a global service center for its parent company, JPMorgan Chase & Co. Its operations in India primarily focus on technology and business operations Co. Its operations in India primarily focus on technology and business operations Co. Its operations in India primarily focus on technology and business operations support for the firm's global activities. support for the firm's global activities. The employment and main activities of the The employment and main activities of the appellant seem to be not much relatable to any political movement in India. The appellant seem to be not much relatable to any political movement in India. The appellant seem to be not much relatable to any political movement in India. The appellant has 'paid' Rs.4,00,000/ appellant has 'paid' Rs.4,00,000/- to 'Rashtriya Samajwati Party (Secular) (RSP)' to 'Rashtriya Samajwati Party (Secular) (RSP)' which is about 24% of his gross salary income of the which is about 24% of his gross salary income of the year and about 1/3 rd of the year and about 1/3 rd of the

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Total Income before claiming deductions under chapter VIA. This makes the whole Total Income before claiming deductions under chapter VIA. This makes the whole Total Income before claiming deductions under chapter VIA. This makes the whole affair murky as it is not clear whether the appellant has ever before or affair murky as it is not clear whether the appellant has ever before or affair murky as it is not clear whether the appellant has ever before or afterwards made any contribution to any political party and clamed exemption, afterwards made any contribution to any political party and clamed exempt afterwards made any contribution to any political party and clamed exempt including mainstream, recognized political parties! The fact of the matter in this including mainstream, recognized political parties! The fact of the matter in this including mainstream, recognized political parties! The fact of the matter in this case is that the purported donation of Rs.4,00,000/ case is that the purported donation of Rs.4,00,000/- does not meet the test of the does not meet the test of the principles of probabilities enunciated by several judicial authorities particularly principles of probabilities enunciated by several judicial authorities particularly principles of probabilities enunciated by several judicial authorities particularly y the Hon'ble Supreme Court in the case of CIT Vs. Durga Prasad 82 ITR 540 CIT Vs. Durga Prasad 82 ITR 540 by the Hon'ble Supreme Court in the case of (SC) and Sumati Dayal Vs. CIT 214 ITR 801(SC). (SC) and Sumati Dayal Vs. CIT 214 ITR 801(SC). 5.3.6. The appellant has attempted to 5.3.6. The appellant has attempted to shift to onus on the AO alluding that the no shift to onus on the AO alluding that the no material about the lack of bonafide etc. of his cla material about the lack of bonafide etc. of his claim of deduction was provided to im of deduction was provided to him. Such stance is legally and factually untenable. In this case, the claim of him. Such stance is legally and factually untenable. In this case, the claim of him. Such stance is legally and factually untenable. In this case, the claim of deduction u/s 80GGC was made by the appellant and therefore, onus is on him deduction u/s 80GGC was made by the appellant and therefore, onus is on him deduction u/s 80GGC was made by the appellant and therefore, onus is on him to establish the bonafide of the same when called by the AO. The AO was acting to establish the bonafide of the same when called by the AO. The AO to establish the bonafide of the same when called by the AO. The AO in view of explicit information received from the Investigation Wing about the in view of explicit information received from the Investigation Wing about the in view of explicit information received from the Investigation Wing about the dubiousness of said RUPP to whom the appellant has made donation of dubiousness of said RUPP to whom the appellant has made donation of dubiousness of said RUPP to whom the appellant has made donation of Rs.4,00,000/-from his bank account. Hence, it was appellant's responsibility to from his bank account. Hence, it was appellant's responsibility to from his bank account. Hence, it was appellant's responsibility to establish the bonafide of his claim, whereas the appellant was evasive and non fide of his claim, whereas the appellant was evasive and non- fide of his claim, whereas the appellant was evasive and non forthcoming all along. The appellant cannot shift the onus of proving the forthcoming all along. The appellant cannot shift the onus of proving the forthcoming all along. The appellant cannot shift the onus of proving the genuineness of his claim of deduction to the AO. genuineness of his claim of deduction to the AO. 5.3.7. At this juncture, it is important to cite the relevant portion of the decision of 5.3.7. At this juncture, it is important to cite the relevant portion of 5.3.7. At this juncture, it is important to cite the relevant portion of Hon'ble ITAT, Rajkot Bench in the case of 'Milind Pankajbhai Shroff V/s. PCIT 'Milind Pankajbhai Shroff V/s. PCIT Hon'ble ITAT, Rajkot Bench in the case of in ITA No.93/RJT/2023' in ITA No.93/RJT/2023' rendered on 20.05.2024 where the Bench was seized rendered on 20.05.2024 where the Bench was seized of the issue of validity of revision u/s 263 involving claim of deduction of of the issue of validity of revision u/s 263 involving claim of deduction of of the issue of validity of revision u/s 263 involving claim of deduction of Rs.30,00,000/- u/s 80GGC and the donation was made to 'Rashtriya Samajwadi u/s 80GGC and the donation was made to 'Rashtriya Samajwadi u/s 80GGC and the donation was made to 'Rashtriya Samajwadi Party (Secular)' which is the same entity as in the present case. The Hon'ble Party (Secular)' which is the same entity as in the present case. The Hon'ble Party (Secular)' which is the same entity as in the present case. The Hon'ble Bench had crystalised following findings about the said entity;- Bench had crystalised following findings about the said entity; Bench had crystalised following findings about the said entity; "22. Now, we shall also adjudicate the other argu "22. Now, we shall also adjudicate the other arguments advanced by Id. ments advanced by Id. DR for the revenue to the effect that "fraud vitiates everything". In this DR for the revenue to the effect that "fraud vitiates everything". In this 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, connection, at the cost of repetition, we reiterate the findings of Id PCIT, connection, at the cost of repetition, we reiterate the findings of Id PCIT, which are as follows: which are as follows: (i) Rashtriya Samajwadi Party (Secular) is a Registered Unre (i) Rashtriya Samajwadi Party (Secular) is a Registered Unre (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 Political Party and it is one of the 23 RUPPs covered in the RUPPs Group of 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 Ahmedabad. This party was established on 21.10.2008 and its registered Ahmedabad. This party was established on 21.10.2008 and its registered address as per its website is Samruddhi Complex, Opp address as per its website is Samruddhi Complex, Opp address as per its website is Samruddhi Complex, Opp- Sakar-3, Income Tax Circle, Ahmedabad. However Tax Circle, Ahmedabad. However, during pre-search enquiry, no party search enquiry, no party office is found at the aforesaid address. office is found at the aforesaid address. (ii) The modus (ii) The modus-operandi of this political party is that the donation is operandi of this political party is that the donation is received through cheque in the bank account of the party and then routed received through cheque in the bank account of the party and then routed received through cheque in the bank account of the party and then routed through intermediary(ies) (whic through intermediary(ies) (which is generally shell entity(ies) controlled by h is generally shell entity(ies) controlled by either the persons running the party or by any other person) in the garb of either the persons running the party or by any other person) in the garb of 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 various purchases or other payments, which are found to be bogus in various purchases or other payments, which are found to be bogus in

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nature. It is pertinent to mention here that the political party nature. It is pertinent to mention here that the political party 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. 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 (iii) During the search proceedings, on 07.09.2022, statement on oath u/s (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 132(4) of the I.T. Act, was recorded of Smt. Sandhya Singh, National Party 132(4) of the I.T. Act, was recorded of Smt. Sandhya Singh, National Party President of the Rashtriya Samajwadi Party (Secu President of the Rashtriya Samajwadi Party (Secular). As evident from the lar). As evident from the declaration made on oath by Smt. Sandhya Singh that although she is declaration made on oath by Smt. Sandhya Singh that although she is declaration made on oath by Smt. Sandhya Singh that although she is national party president of the party, however, all the work related with national party president of the party, however, all the work related with national party president of the party, however, all the work related with party is being looked party is being looked-after by her husband Shri Bishwajeet Singh. She after by her husband Shri Bishwajeet Singh. She was not aware abou was not aware about any activity of the party. Further, vide Q. No. 18 and t any activity of the party. Further, vide Q. No. 18 and 19, she was categorically asked regarding details of bank accounts, books 19, she was categorically asked regarding details of bank accounts, books 19, she was categorically asked regarding details of bank accounts, books of accounts, nature and quantum of the expenditures of the Rashtriya, of accounts, nature and quantum of the expenditures of the Rashtriya, of accounts, nature and quantum of the expenditures of the Rashtriya, Samajwadi Party. In reply to the same, she again stated Samajwadi Party. In reply to the same, she again stated 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 aware of any details regarding these subjects. She stated that all these aware of any details regarding these subjects. She stated that all these things are being handled by her husband Shri Bishwajeet Singh. things are being handled by her husband Shri Bishwajeet Singh. 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 (iv) It is on record that statement of Shri Bishwajeet Singh, on oath u/s (iv) It is on record that statement of Shri Bishwajeet Singh, on oath u/s 132(4) of the I.T. Act, was r 132(4) of the I.T. Act, was recorded on 07.09.2022. During the statement ecorded on 07.09.2022. During the statement proceedings, Shri Bishwajeet Singh admitted thefact that on his instance, proceedings, Shri Bishwajeet Singh admitted thefact that on his instance, proceedings, Shri Bishwajeet Singh admitted thefact that on his instance, his wife Smt. Sandhya Singh joined RSP, as president. During the his wife Smt. Sandhya Singh joined RSP, as president. During the his wife Smt. Sandhya Singh joined RSP, as president. During the statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. RSP is involved in bogus donations scam across India and founder of party RSP is involved in bogus donations scam across India and founder of party 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 i.e. Shri Surya, Nath Chaturvedi carried out bogus donations scam since i.e. Shri Surya, Nath Chaturvedi carried out bogus donations scam since inception of the party. He further stated that after deducting certain inception of the party. He further stated that after deducting certain inception of the party. He further stated that after deducting certain commission donations are being returne commission donations are being returned to the donors. d to the donors. (v) Furthermore, Shri Bishwajeet Singh stated thatthese affairs are also (v) Furthermore, Shri Bishwajeet Singh stated thatthese affairs are also (v) Furthermore, Shri Bishwajeet Singh stated thatthese affairs are also being handled by the Shri Ritesh Shah. Siri Bishwajit Singh submitted list being handled by the Shri Ritesh Shah. Siri Bishwajit Singh submitted list being handled by the Shri Ritesh Shah. Siri Bishwajit Singh submitted list of some bogus entities used for cash generation, which is reproduced by Id of some bogus entities used for cash generation, which is reproduced by Id of some bogus entities used for cash generation, which is reproduced by Id PCIT on page PCIT on page number 13 of his order. (vi) During the post search inquiries, statement of Shri Amitkumar (vi) During the post search inquiries, statement of Shri Amitkumar (vi) During the post search inquiries, statement of Shri Amitkumar Chaturvedi (AHLPC7736R) Chaturvedi (AHLPC7736R), past president of political party was also past president of political party was also recorded, he categorically admitted that the party was engaged in bogus recorded, he categorically admitted that the party was engaged in bogus recorded, he categorically admitted that the party was engaged in bogus donations scam. donations scam. (vii). It is relevant to refer to the fact that on verification with the website of is relevant to refer to the fact that on verification with the website of 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, regional Chief Electoral Officer where the party is registered i.e. CEO, regional Chief Electoral Officer where the party is registered i.e. CEO, Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) has not filed any contribution rep has not filed any contribution report, since F.Y. 2013-14 onward. 14 onward. (viii). The party been claiming wrong and invalid exemption, over the years (viii). The party been claiming wrong and invalid exemption, over the years (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 under section 13A of the I.T. Act but it has also been, mentioning in its under section 13A of the I.T. Act but it has also been, mentioning in its Income Tax Retum of F.Y. 2018 Income Tax Retum of F.Y. 2018-19 that no contribution report has been 19 that no contribution report has been filed u/s 29C of the R.P. Act, 1951. d u/s 29C of the R.P. Act, 1951.

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(ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as (ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as (ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as informed by Id Counsel for the assessee, with Election Commission of informed by Id Counsel for the assessee, with Election Commission of informed by Id Counsel for the assessee, with Election Commission of India/R.P. Act, 1951. India/R.P. Act, 1951. (x) There is no retraction of statements given by Smt. S (x) There is no retraction of statements given by Smt. S (x) There is no retraction of statements given by Smt. Sandhay Singh, Shri Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct and valid. 23. From the above facts, it is abundantly clear that donation received by 23. From the above facts, it is abundantly clear that donation received by 23. From the above facts, it is abundantly clear that donation received by "Rashtriya Samajwadi Party" is bogus. The assessee has claimed "Rashtriya Samajwadi Party" is bogus. The assessee has claimed "Rashtriya Samajwadi Party" is bogus. The assessee has claimed deduction under deduction under Section 80GGC of the Act, and 80G(5) of the Act, which Section 80GGC of the Act, and 80G(5) of the Act, which isalso bogus and to that extent Assessment Order passed by assessing isalso bogus and to that extent Assessment Order passed by assessing isalso bogus and to that extent Assessment Order passed by assessing officer is erroneous and prejudicial to the interest of Revenue." officer is erroneous and prejudicial to the interest of Revenue." officer is erroneous and prejudicial to the interest of Revenue." 5.3.8. The present case is squarely covered by the aforementioned decision of 5.3.8. The present case is squarely covered by the aforementioned 5.3.8. The present case is squarely covered by the aforementioned Hon'ble ITAT, Rajkot bench. Besides this, the ITAT, Surat Bench in the case of Hon'ble ITAT, Rajkot bench. Besides this, the ITAT, Surat Bench in the case of Hon'ble ITAT, Rajkot bench. Besides this, the ITAT, Surat Bench in the case of Jayeshkumar Gopalbhai Akbari V/s. DCIT, Circle Jayeshkumar Gopalbhai Akbari V/s. DCIT, Circle -2(3), Surat has decided the 2(3), Surat has decided the same matter where bogus claim of deduction u/s 80GGC was denied to an same matter where bogus claim of deduction u/s 80GGC was denied to an same matter where bogus claim of deduction u/s 80GGC was denied to an assessee where the genuineness of sizeable amount of contribution in proportion genuineness of sizeable amount of contribution in proportion to the assessee's Total Income to an unrecognized political party was made. to the assessee's Total Income to an unrecognized political party was made. to the assessee's Total Income to an unrecognized political party was made. 5.3.9. The alternate plea that the said 'political party' RSP was genuinely 5.3.9. The alternate plea that the said 'political party' RSP was genuinely 5.3.9. The alternate plea that the said 'political party' RSP was genuinely registered u/s 29A of the Peoples Represen registered u/s 29A of the Peoples Representation Act, 1951 is also explored and tation Act, 1951 is also explored and held that the section 29A of the said Act, governs registration of Associations and held that the section 29A of the said Act, governs registration of Associations and held that the section 29A of the said Act, governs registration of Associations and Bodies as political parties. The section 29B of the said Act provides for receipt of Bodies as political parties. The section 29B of the said Act provides for receipt of Bodies as political parties. The section 29B of the said Act provides for receipt of contributions by such parties. These sections do contributions by such parties. These sections do not override provisions of Income not override provisions of Income Tax Act, particularly those related to looking into bonafide of the contributions Tax Act, particularly those related to looking into bonafide of the contributions Tax Act, particularly those related to looking into bonafide of the contributions made/received by the said registered political parties. made/received by the said registered political parties. 5.3.10. India is a democracy where right to association is one of the fundamental 5.3.10. India is a democracy where right to association is one of the fundamental 5.3.10. India is a democracy where right to association is one of the fundamental rights and participation in the political processes is accordingly liberally ghts and participation in the political processes is accordingly liberally ghts and participation in the political processes is accordingly liberally construed in the humble opinion of this author. The construed in the humble opinion of this author. The information in the public information in the public domain testifies that as of August 2025, there are a total of 2,920 registered domain testifies that as of August 2025, there are a total of 2,920 registered domain testifies that as of August 2025, there are a total of 2,920 registered political parties in Ind political parties in India, consisting of 6 national parties, 67 state parties, and ia, consisting of 6 national parties, 67 state parties, and 2,854 registered but unrecognized political parties (RUPPs). The Election 2,854 registered but unrecognized political parties (RUPPs). The Election 2,854 registered but unrecognized political parties (RUPPs). The Election Commission of India time to time delist such RUPPs. It is learnt that recently 334 Commission of India time to time delist such RUPPs. It is learnt that recently 334 Commission of India time to time delist such RUPPs. It is learnt that recently 334 RUPPs have been delisted, bringing the RUPPs have been delisted, bringing the number of unrecognized parties down to number of unrecognized parties down to 2,520. 5.3.11. The RUPP, i.e. 'RSP' to which this appellant has made 'donation' is one 5.3.11. The RUPP, i.e. 'RSP' to which this appellant has made 'donation' is one 5.3.11. The RUPP, i.e. 'RSP' to which this appellant has made 'donation' is one such delisted RUPP. The facts and circumstances of said RUPP, from the vantage such delisted RUPP. The facts and circumstances of said RUPP, from the vantage such delisted RUPP. The facts and circumstances of said RUPP, from the vantage point of the Income Tax Law have been elaborately d point of the Income Tax Law have been elaborately discussed and communicated iscussed and communicated to this appellant right from the stage of notice u/s 148A(b) till the body of the to this appellant right from the stage of notice u/s 148A(b) till the body of the to this appellant right from the stage of notice u/s 148A(b) till the body of the reassessment order impugned here. The bottom line is that during the search reassessment order impugned here. The bottom line is that during the search reassessment order impugned here. The bottom line is that during the search proceedings conducted on 119 premises related to 23 different RUPPs; 35 bogus proceedings conducted on 119 premises related to 23 different RUPPs; 35 proceedings conducted on 119 premises related to 23 different RUPPs; 35 intermediary entities and 3 major exit entry providers were discovered. The said intermediary entities and 3 major exit entry providers were discovered. The said intermediary entities and 3 major exit entry providers were discovered. The said RUPP i.e. RSP was not found existing at the given address. A Smt. Sandhya RUPP i.e. RSP was not found existing at the given address. A Smt. Sandhya RUPP i.e. RSP was not found existing at the given address. A Smt. Sandhya

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Singh is said to be National President of the said RUPP to which this appellant Singh is said to be National President of the said RUPP to which this appellant Singh is said to be National President of the said RUPP to which this appellant has made 'donation'. During such proceedings at the premises of said RUPPs ion'. During such proceedings at the premises of said RUPPs ion'. During such proceedings at the premises of said RUPPs cash totaling to Rs.6.55 crores, jewelry valued at Rs.5.95 crores and Bullion cash totaling to Rs.6.55 crores, jewelry valued at Rs.5.95 crores and Bullion cash totaling to Rs.6.55 crores, jewelry valued at Rs.5.95 crores and Bullion worth Rs.39.90 lakhs was found. The Investigation Wing had discovered that worth Rs.39.90 lakhs was found. The Investigation Wing had discovered that worth Rs.39.90 lakhs was found. The Investigation Wing had discovered that such RUPPs were newly formed or "have been such RUPPs were newly formed or "have been bought from other handlers to earn bought from other handlers to earn commission income by running bogus donation racket". The modus operandi commission income by running bogus donation racket". The modus operandi commission income by running bogus donation racket". The modus operandi discovered during search proceedings, besides the findings of incriminating discovered during search proceedings, besides the findings of incriminating discovered during search proceedings, besides the findings of incriminating assets as mentioned above were communicated to this appellant in notice u/s assets as mentioned above were communicated to this appellant in notice u assets as mentioned above were communicated to this appellant in notice u 148A(b) as well as during the assessment proceedings. The fact of the matter is 148A(b) as well as during the assessment proceedings. The fact of the matter is 148A(b) as well as during the assessment proceedings. The fact of the matter is that some unscrupulous elements have floated such RUPPS where they run the that some unscrupulous elements have floated such RUPPS where they run the that some unscrupulous elements have floated such RUPPS where they run the racket of providing accommodation entry u/s 80GGC at certain commission; the racket of providing accommodation entry u/s 80GGC at certain commission; the racket of providing accommodation entry u/s 80GGC at certain commission; the modus operandi is tha modus operandi is that the donation is received though banking channels and t the donation is received though banking channels and after charging certain commission as discussed in the assessment order, cash is after charging certain commission as discussed in the assessment order, cash is after charging certain commission as discussed in the assessment order, cash is returned. 5.3.12. The relevant provisions of section 29A and 29B which governed the 5.3.12. The relevant provisions of section 29A and 29B which governed the 5.3.12. The relevant provisions of section 29A and 29B which governed the registration and donation to politica registration and donation to political parties are as below: "29A. Registration with the Election Commission of associations "29A. Registration with the Election Commission of associations "29A. Registration with the Election Commission of associations and bodies as political parties. and bodies as political parties. – (1) Any association or body of individual citizens of India calling itself a (1) Any association or body of individual citizens of India calling itself a (1) Any association or body of individual citizens of India calling itself a political party and intending to avail itself of the pro political party and intending to avail itself of the pro political party and intending to avail itself of the provisions of this Part shall make an application to the Election Commission for its registration as shall make an application to the Election Commission for its registration as shall make an application to the Election Commission for its registration as a political party for the purposes of this Act. a political party for the purposes of this Act. (2) Every such application shall be made, (2) Every such application shall be made, - (a) if the association or body is in existence at the commencement (a) if the association or body is in existence at the commencement (a) if the association or body is in existence at the commencement of the Representation of the People (Amendment) Act, 1988 (1 of 1989), within Representation of the People (Amendment) Act, 1988 (1 of 1989), within Representation of the People (Amendment) Act, 1988 (1 of 1989), within sixty days next following such commencement; sixty days next following such commencement; (3) Every application under sub (3) Every application under sub-section (1) shall be signed by the chief section (1) shall be signed by the chief executive officer of the association or body (whether such executive officer of the association or body (whether such executive officer of the association or body (whether such chief executive officer is known as Secretary or by any other designation) and presented officer is known as Secretary or by any other designation) and presented officer is known as Secretary or by any other designation) and presented to the Secretary to the Commission or sent to such Secretary by registered to the Secretary to the Commission or sent to such Secretary by registered to the Secretary to the Commission or sent to such Secretary by registered post. (4) Every such application shall contain the following particulars, namely: (4) Every such application shall contain the following particulars, namely: (4) Every such application shall contain the following particulars, namely:- (a) the name of the association or body; ame of the association or body; (b) the State in which its head office is situate; (b) the State in which its head office is situate; (c) the address to which letters and other communications meant for it (c) the address to which letters and other communications meant for it (c) the address to which letters and other communications meant for it should be sent; should be sent; (d) the names of its president, secretary, treasurer and other office (d) the names of its president, secretary, treasurer and other office (d) the names of its president, secretary, treasurer and other office-bearers;

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(e) the numerical strength of its members, and if there are categories of its numerical strength of its members, and if there are categories of its numerical strength of its members, and if there are categories of its members, the numerical strength in each category; members, the numerical strength in each category; (f) whether it has any local units; if so, at what levels; (f) whether it has any local units; if so, at what levels; (g) whether it is represented by any member or members in either House of (g) whether it is represented by any member or members in either House of (g) whether it is represented by any member or members in either House of Parliament or of any State Legislature: if so, the number of such member or rliament or of any State Legislature: if so, the number of such member or rliament or of any State Legislature: if so, the number of such member or members. (5) The application under sub (5) The application under sub-section (1) shall be accompanied by a copy of section (1) shall be accompanied by a copy of the memorandum or rules and regulations of the association or body, by the memorandum or rules and regulations of the association or body, by the memorandum or rules and regulations of the association or body, by whatever name called, and whatever name called, and such memorandum or rules and regulations such memorandum or rules and regulations shall contain a specific provision that the association or body shall bear shall contain a specific provision that the association or body shall bear shall contain a specific provision that the association or body shall bear true faith and allegiance to the Constitution of India as by law established, true faith and allegiance to the Constitution of India as by law established, true faith and allegiance to the Constitution of India as by law established, and to the principles of socialism, secularism and democracy, and to the principles of socialism, secularism and democracy, and to the principles of socialism, secularism and democracy, and would uphold the sovereignty, unity and integrity of India. uphold the sovereignty, unity and integrity of India. (6) The Commission may call for such other particulars as it may deem fit (6) The Commission may call for such other particulars as it may deem fit (6) The Commission may call for such other particulars as it may deem fit from the association or body. from the association or body. (7) After considering all the particulars as aforesaid in its possession and (7) After considering all the particulars as aforesaid in its possession and (7) After considering all the particulars as aforesaid in its possession and any other necessary and relevant factors and after giving the necessary and relevant factors and after giving the necessary and relevant factors and after giving the representatives of the association or body reasonable opportunity of being representatives of the association or body reasonable opportunity of being representatives of the association or body reasonable opportunity of being heard, the Commission shall decide either to register the association or heard, the Commission shall decide either to register the association or heard, the Commission shall decide either to register the association or body as a political party for the purposes of this Part, body as a political party for the purposes of this Part, body as a political party for the purposes of this Part, or not so to register it; and the Commission shall communicate its decision to the association or it; and the Commission shall communicate its decision to the association or it; and the Commission shall communicate its decision to the association or body: Provided that no association or body shall be registered as a political party Provided that no association or body shall be registered as a political party Provided that no association or body shall be registered as a political party under this sub under this sub-section unless the memorandum or rules and regulations of section unless the memorandum or rules and regulations of such association or body conform to the provisions of sub such association or body conform to the provisions of sub such association or body conform to the provisions of sub-section (5). (8) The decision of the Commission shall be final. (8) The decision of the Commission shall be final. (9) After an association or body has been registered as a political party as (9) After an association or body has been registered as a political party as (9) After an association or body has been registered as a political party as aforesaid, any change in its name, head office, office aforesaid, any change in its name, head office, office aforesaid, any change in its name, head office, office-bearers, address or in any other material matters shall be communicated to the Commission in any other material matters shall be communicated to the Commission in any other material matters shall be communicated to the Commission without delay.) without delay.) 29B. Political parties entitled to accept contribution. 29B. Political parties entitled to accept contribution. 29B. Political parties entitled to accept contribution. Subject to the provisions of the Companies Act, 1956 (1 of 1956), every political party provisions of the Companies Act, 1956 (1 of 1956), every political party provisions of the Companies Act, 1956 (1 of 1956), every political party may accept any amount of contribution voluntarily offered to it by any pt any amount of contribution voluntarily offered to it by any pt any amount of contribution voluntarily offered to it by any person or company other than a Government company: person or company other than a Government company: person or company other than a Government company: Provided that no political party shall be eligible to accept any contribution Provided that no political party shall be eligible to accept any contribution Provided that no political party shall be eligible to accept any contribution from any foreign source defined under clause (e) of section 2 of from any foreign source defined under clause (e) of section 2 of from any foreign source defined under clause (e) of section 2 of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976). Contribution (Regulation) Act, 1976 (49 of 1976).

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Explanation. For the purposes of this section and section 29C, Explanation. For the purposes of this section and section 29C, Explanation. For the purposes of this section and section 29C, (a) "company" means a company as defined in section 3; (a) "company" means a company as defined in section 3; (a) "company" means a company as defined in section 3; (b) "Government company" means a company within the meaning of (b) "Government company" means a company within the meaning of (b) "Government company" means a company within the meaning of section 617; and and (c) "contribution" has the meaning assigned to it under section 293A, of the (c) "contribution" has the meaning assigned to it under section 293A, of the (c) "contribution" has the meaning assigned to it under section 293A, of the Companies Act, 1956 (1 of 1956) and includes any donation or Companies Act, 1956 (1 of 1956) and includes any donation or Companies Act, 1956 (1 of 1956) and includes any donation or subscription offered by any person to a political party; and subscription offered by any person to a political party; and subscription offered by any person to a political party; and (d) "person" has the meaning assigned to it under cl (d) "person" has the meaning assigned to it under clause (31) of section 2 ause (31) of section 2 of the Income- of the Income-tax Act, 1961 (43 of 1961), but does not include Government tax Act, 1961 (43 of 1961), but does not include Government company, local authority and every artificial juridical person wholly or company, local authority and every artificial juridical person wholly or company, local authority and every artificial juridical person wholly or partially funded by the Government." partially funded by the Government." As already observed the aforesaid provisions do n As already observed the aforesaid provisions do not per se establish bonafide of ot per se establish bonafide of financial transactions to be undertaken by such RUPPs not to mention that they financial transactions to be undertaken by such RUPPs not to mention that they financial transactions to be undertaken by such RUPPs not to mention that they do not override provisions enshrined in the Income tax statute. Hence, when do not override provisions enshrined in the Income tax statute. Hence, when do not override provisions enshrined in the Income tax statute. Hence, when Investigation Wing has cast the doubts on bonafide of the said RUPP, the Investigation Wing has cast the doubts on bonafide of the said RUPP, Investigation Wing has cast the doubts on bonafide of the said RUPP, appellant was under onus to dispel them. appellant was under onus to dispel them. 5.3.13. The alternate argument that the AO has not been able to provide cash 5.3.13. The alternate argument that the AO has not been able to provide cash 5.3.13. The alternate argument that the AO has not been able to provide cash trail or any indirect benefit received by him also does not hold. Such plea is trail or any indirect benefit received by him also does not hold. Such plea is trail or any indirect benefit received by him also does not hold. Such plea is unwarranted when the proceedings are conducted where circumstantial unwarranted when the proceedings are conducted where ci unwarranted when the proceedings are conducted where ci evidences revealed that the recipient of donation of Rs.4,00,000/- was a dubious evidences revealed that the recipient of donation of Rs.4,00,000/ evidences revealed that the recipient of donation of Rs.4,00,000/ entity running racket of providing bogus entries for claim of deduction u/s entity running racket of providing bogus entries for claim of deduction u/s entity running racket of providing bogus entries for claim of deduction u/s 80GGC. Moreover, it is established norm for test of evidence as far as 80GGC. Moreover, it is established norm for test of evidence as far as 80GGC. Moreover, it is established norm for test of evidence as far as proceedings in the Income Tax Statute are concerned that the proceedings in the the Income Tax Statute are concerned that the proceedings in the the Income Tax Statute are concerned that the proceedings in the Income Tax Act, particularly to determine tax liability, is different from criminal Income Tax Act, particularly to determine tax liability, is different from criminal Income Tax Act, particularly to determine tax liability, is different from criminal proceedings hence the establishment of preponderance of probability is accepted proceedings hence the establishment of preponderance of probability is proceedings hence the establishment of preponderance of probability is to draw an inference. Here, to draw an inference. Here, it would be pertinent to consider the established ratio it would be pertinent to consider the established ratio of several landmark judgements. In the case of of several landmark judgements. In the case of Sumati Dayal v. CIT (1995) Sumati Dayal v. CIT (1995) 214 ITR 801: 125 CTR 124: 80 TAXMAN 89 (SC), 214 ITR 801: 125 CTR 124: 80 TAXMAN 89 (SC), it was held, inter alia, that it was held, inter alia, that 'since the proceedings under the Act are civil in 'since the proceedings under the Act are civil in nature, even the circumstantial nature, even the circumstantial evidences based on preponderance of probability will constitute incriminating evidences based on preponderance of probability will constitute incriminating evidences based on preponderance of probability will constitute incriminating material enough to make an assessment of income and fasten the tax liability.' material enough to make an assessment of income and fasten the tax liability.' material enough to make an assessment of income and fasten the tax liability.' Similarly, in the case of Similarly, in the case of Gujarat Travancore Agency v. CIT (1989) 1 Gujarat Travancore Agency v. CIT (1989) 177 ITR 455 (SC) it has been held that 'The concept of mens rea is peculiar and applicable it has been held that 'The concept of mens rea is peculiar and applicable it has been held that 'The concept of mens rea is peculiar and applicable strictly in criminal law but the same cannot be strictly imported under the Income- strictly in criminal law but the same cannot be strictly imported under the Income strictly in criminal law but the same cannot be strictly imported under the Income tax Act more particularly with reference to levy of penalty. The theory of onus is tax Act more particularly with reference to levy of penalty. The theory of onus is tax Act more particularly with reference to levy of penalty. The theory of onus is both on the revenue as well as on the assessee. The onus is not on the revenue both on the revenue as well as on the assessee. The onus is not on the revenue both on the revenue as well as on the assessee. The onus is not on the revenue either to prove the guilty mind or the sufficient cause on the part of the assessee. either to prove the guilty mind or the sufficient cause on the part of the assessee. either to prove the guilty mind or the sufficient cause on the part of the assessee. The onus is entirely on the assessee to prove his bonafides on the basis of facts The onus is entirely on the assessee to prove his bonafides on the basis of facts The onus is entirely on the assessee to prove his bonafides on the basis of facts and circumstances of the case. If the assessee can discharge such onus, then mstances of the case. If the assessee can discharge such onus, then mstances of the case. If the assessee can discharge such onus, then there can be no levy of penalty. The Hon'ble ITAT Bombay in the case of M/s there can be no levy of penalty. The Hon'ble ITAT Bombay in the case of there can be no levy of penalty. The Hon'ble ITAT Bombay in the case of Mont Blane Properties and Industries (P) Ltd. (ITA No.614/ Bom/87) (ITAT Mont Blane Properties and Industries (P) Ltd. (ITA No.614/ Bom/87) (ITAT Mont Blane Properties and Industries (P) Ltd. (ITA No.614/ Bom/87) (ITAT

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Bombay) has held that 'the word 'eviden has held that 'the word 'evidence' as used in sec. 143(3) covered ce' as used in sec. 143(3) covered circumstantial evidence also. The word 'evidence' as used in section 143(3) circumstantial evidence also. The word 'evidence' as used in section 143(3) circumstantial evidence also. The word 'evidence' as used in section 143(3) obviously could not be confined to direct evidence. The word 'evidence' was obviously could not be confined to direct evidence. The word 'evidence' was obviously could not be confined to direct evidence. The word 'evidence' was comprehensive enough to cover the circumstantial evidence also. Under the tax comprehensive enough to cover the circumstantial evidence also. Under comprehensive enough to cover the circumstantial evidence also. Under jurisprudence, the word 'evidence' had much wider connotations. While the word jurisprudence, the word 'evidence' had much wider connotations. While the word jurisprudence, the word 'evidence' had much wider connotations. While the word 'evidence' might recall the oral and documentary evidence as may be admissible 'evidence' might recall the oral and documentary evidence as may be admissible 'evidence' might recall the oral and documentary evidence as may be admissible under the India Evidence Act the use of word 'material' in Section 143(3) showed under the India Evidence Act the use of word 'material' in Section 143(3) showed under the India Evidence Act the use of word 'material' in Section 143(3) showed that the Assessing Officer, not being a court could rely upon material, which Assessing Officer, not being a court could rely upon material, which Assessing Officer, not being a court could rely upon material, which might not strictly be evidence admissible under the Indian Evidence Act for the might not strictly be evidence admissible under the Indian Evidence Act for the might not strictly be evidence admissible under the Indian Evidence Act for the purpose of making an order of assessment. Court often took judicial notice of purpose of making an order of assessment. Court often took judicial notice of purpose of making an order of assessment. Court often took judicial notice of certain facts which need not certain facts which need not be proved before them. The plain reading of section be proved before them. The plain reading of section 142 and 143 clearly suggest that the Assessing Officer may also act on the 142 and 143 clearly suggest that the Assessing Officer may also act on the 142 and 143 clearly suggest that the Assessing Officer may also act on the material gathered by him. The word 'material' clearly shows that the Assessing material gathered by him. The word 'material' clearly shows that the Assessing material gathered by him. The word 'material' clearly shows that the Assessing Officer is not fettered by the technical rules of Officer is not fettered by the technical rules of evidence and the like, and that he evidence and the like, and that he may act on material which may not strictly speaking be accepted evidence in material which may not strictly speaking be accepted evidence in material which may not strictly speaking be accepted evidence in court of law.' The Hon'ble Apex Court in the case of CIT v. Durga Prasad More CIT v. Durga Prasad More court of law.' The Hon'ble Apex Court in the case of (1971) 82 ITR 540 (SC) (1971) 82 ITR 540 (SC) has held that 'Assessing Officer can go bey has held that 'Assessing Officer can go beyond the parameters laid down in Civil, Criminal and Evidence Act and look into the parameters laid down in Civil, Criminal and Evidence Act and look into the parameters laid down in Civil, Criminal and Evidence Act and look into the surrounding circumstances and even issue summons and examine witnesses and surrounding circumstances and even issue summons and examine witnesses and surrounding circumstances and even issue summons and examine witnesses and other people who he suspects would have given the loans or entered into other people who he suspects would have given the loans or entered into other people who he suspects would have given the loans or entered into agreements in order to fin agreements in order to find out the reality of the situation.' 5.3.14. The appellant, specifically through the ground no. 2 of the appeal, has 5.3.14. The appellant, specifically through the ground no. 2 of the appeal, has 5.3.14. The appellant, specifically through the ground no. 2 of the appeal, has assailed this reassessment order citing that opportunity to cross examine the assailed this reassessment order citing that opportunity to cross examine the assailed this reassessment order citing that opportunity to cross examine the persons related to said entry providers was not allowed to him. The appellant persons related to said entry providers was not allowed to him. The appellant persons related to said entry providers was not allowed to him. The appellant has cited that it wa has cited that it was not given opportunity to cross-examine the said entry examine the said entry operators, is of no merit until the appellant is able to dislodge and disprove the operators, is of no merit until the appellant is able to dislodge and disprove the operators, is of no merit until the appellant is able to dislodge and disprove the doubts raised on the bonafide about the deduction calimed. The Hon'ble doubts raised on the bonafide about the deduction calimed. doubts raised on the bonafide about the deduction calimed. Supreme Court in the case of 'Ayubkhan Noorkha Supreme Court in the case of 'Ayubkhan Noorkhan Pathan v State of n Pathan v State of Maharashtra & others' in Civil Appeal No. 7728 Of 2012 has held that, "A Maharashtra & others' in Civil Appeal No. 7728 Of 2012 Maharashtra & others' in Civil Appeal No. 7728 Of 2012 party, who does not want to controvert the veracity of the evidence on record, or party, who does not want to controvert the veracity of the evidence on record, or party, who does not want to controvert the veracity of the evidence on record, or of the testimony gathered behind his back, cannot expect to succeed in any of the testimony gathered behind his back, cannot expect to succeed in any of the testimony gathered behind his back, cannot expect to succeed in any subsequent grievance raised by him, stating that no opportunity of cross uent grievance raised by him, stating that no opportunity of cross- uent grievance raised by him, stating that no opportunity of cross examination was provided to him, specially when the same was not requested, examination was provided to him, specially when the same was not requested, examination was provided to him, specially when the same was not requested, and there was no dispute regarding the veracity of the statement. (See also: and there was no dispute regarding the veracity of the statement. (See also: and there was no dispute regarding the veracity of the statement. (See also: Union of India v. P.K. Roy, AIR 1968 Union of India v. P.K. Roy, AIR 1968 SC 850; and Channabasappa Basappa SC 850; and Channabasappa Basappa Happali v. State of Mysore, AIR 1972 SC 32)." The Hon'ble Calcutta High The Hon'ble Calcutta High Happali v. State of Mysore, AIR 1972 SC 32)." Court in a recent decision in the case of Principal Commissioner of Court in a recent decision in the case of Principal Commissioner of Court in a recent decision in the case of Principal Commissioner of Income-tax vs. Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta)/[2022] tax vs. Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta)/[2022] tax vs. Swati Bajaj [2022] 139 taxmann.com 352 (Calcutta)/[2022] 288 Taxman 403 (Calcutta)/[2022] 446 ITR 56 (Calcutta) [14 n 403 (Calcutta)/[2022] 446 ITR 56 (Calcutta) [14 n 403 (Calcutta)/[2022] 446 ITR 56 (Calcutta) [14-06-2022] has considered the same issue as the one under discussion here and has held that considered the same issue as the one under discussion here and has held that considered the same issue as the one under discussion here and has held that "The report submitted by the Investigation department could not be thrown out on "The report submitted by the Investigation department could not be thrown out on "The report submitted by the Investigation department could not be thrown out on the grounds urged on behalf of the the grounds urged on behalf of the assessees. The assessees have not been assessees. The assessees have not been shown to be prejudiced on account of non shown to be prejudiced on account of non-furnishing of the investigation report or furnishing of the investigation report or non-production of the persons for cross examination as the assessee has not production of the persons for cross examination as the assessee has not production of the persons for cross examination as the assessee has not specifically indicated as to how he specifically indicated as to how he was prejudiced, couple was prejudiced, coupled with the fact as

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admitted by the revenue, the statements do not indict the assessee. That apart, admitted by the revenue, the statements do not indict the assessee. That apart, admitted by the revenue, the statements do not indict the assessee. That apart, the investigation has commenced targeting the individuals who dealt with the the investigation has commenced targeting the individuals who dealt with the the investigation has commenced targeting the individuals who dealt with the penny stocks and after examining the modus seeing the cash trail the report has penny stocks and after examining the modus seeing the cash trail the report has penny stocks and after examining the modus seeing the cash trail the report has been submitted recommending the same to be placed before the DGIT been submitted recommending the same to be placed before the DGIT been submitted recommending the same to be placed before the DGIT (Investigation) of all the States of the country. It is thereafter the concerned (Investigation) of all the States of the country. It is thereafter the concerned (Investigation) of all the States of the country. It is thereafter the concerned Assessing Officers have been informed to consider as to the bonafideness and Assessing Officers have been informed to consider as to the bonafideness and Assessing Officers have been informed to consider as to the bonafideness and genuineness of the claims of LTC genuineness of the claims of LTCG/LTCL of the respective assessees qua the G/LTCL of the respective assessees qua the findings which emanated during the investigation conducted on the individuals findings which emanated during the investigation conducted on the individuals findings which emanated during the investigation conducted on the individuals who dealt with the penny stocks. who dealt with the penny stocks. …………………………....A careful reading of the ....A careful reading of the same would show that the assessee has not been named in the report. If such be same would show that the assessee has not been named in the rep same would show that the assessee has not been named in the rep the case, unless and until the assessee shows and proves that she/he was the case, unless and until the assessee shows and proves that she/he was the case, unless and until the assessee shows and proves that she/he was prejudiced on account of such report/statement mere mentioning that non- prejudiced on account of such report/statement mere mentioning that non prejudiced on account of such report/statement mere mentioning that non furnishing of the report or non furnishing of the report or non-availability of the person for cross examination availability of the person for cross examination cannot vitiate the proceedings. The assessees have miserably failed to prove the the proceedings. The assessees have miserably failed to prove the the proceedings. The assessees have miserably failed to prove the test of prejudice or that the test of fair hearing has not been satisfied in their test of prejudice or that the test of fair hearing has not been satisfied in their test of prejudice or that the test of fair hearing has not been satisfied in their individual cases. In all the cases, the assessees have been issued notices under individual cases. In all the cases, the assessees have been issued notices under individual cases. In all the cases, the assessees have been issued notices under sections 143(2) and 142(1 sections 143(2) and 142(1) they have been directed to furnish the documents, the ) they have been directed to furnish the documents, the assessee have complied with the directions, appeared before the Assessing assessee have complied with the directions, appeared before the Assessing assessee have complied with the directions, appeared before the Assessing Officer and in many cases represented by Advocates/Chartered Accountants, Officer and in many cases represented by Advocates/Chartered Accountants, Officer and in many cases represented by Advocates/Chartered Accountants, elaborate legal submissions have been made both oral elaborate legal submissions have been made both oral and inwriting and thereafter the assessments have been completed. Nothing prevented the assessee thereafter the assessments have been completed. Nothing prevented the assessee thereafter the assessments have been completed. Nothing prevented the assessee from mentioning that unless and until the report is furnished and the statements from mentioning that unless and until the report is furnished and the statements from mentioning that unless and until the report is furnished and the statements are provided, they would not in a position to take part in the inquiry which is are provided, they would not in a position to take part in the inquiry which are provided, they would not in a position to take part in the inquiry which being conducted by the Assessing Officer in scrutiny assessment under section being conducted by the Assessing Officer in scrutiny assessment under section being conducted by the Assessing Officer in scrutiny assessment under section 143(3)………………. 5.3.15, In the present case, the donation has certainly been paid through banking 5.3.15, In the present case, the donation has certainly been paid through banking 5.3.15, In the present case, the donation has certainly been paid through banking channels but that was the part of the design where entities were floated so as to channels but that was the part of the design where entities were floated so as channels but that was the part of the design where entities were floated so as provide accommodation entries of deduction u/s 80GGC while availing the benefit provide accommodation entries of deduction u/s 80GGC while availing the benefit provide accommodation entries of deduction u/s 80GGC while availing the benefit of section 13A. The substance has to prevail over form. Also, a claim of deduction of section 13A. The substance has to prevail over form. Also, a claim of deduction of section 13A. The substance has to prevail over form. Also, a claim of deduction or for that matter any transaction having bearing on revenue has to be considered or for that matter any transaction having bearing on revenue has to be considered or for that matter any transaction having bearing on revenue has to be considered in totality of facts and ity of facts and circumstances of the case particularly with regard to circumstances of the case particularly with regard to genuineness. The Hon'ble ITAT, Rajkot has elaborately dealt with the facts of the genuineness. The Hon'ble ITAT, Rajkot has elaborately dealt with the facts of the genuineness. The Hon'ble ITAT, Rajkot has elaborately dealt with the facts of the same entity as the present case which has been used to avail the claim of bogus same entity as the present case which has been used to avail the claim of bogus same entity as the present case which has been used to avail the claim of bogus deduction by the appell deduction by the appellant and hence it does not need reproduction here. ant and hence it does not need reproduction here. Following the findings of the same as well as in the facts and circumstances of Following the findings of the same as well as in the facts and circumstances of Following the findings of the same as well as in the facts and circumstances of the case as discussed in foregoing paragraphs, the ground no. 1, 2, 3, 4 & 5 of the case as discussed in foregoing paragraphs, the ground no. 1, 2, 3, 4 & 5 of the case as discussed in foregoing paragraphs, the ground no. 1, 2, 3, 4 & 5 of the present appeal are liable to be the present appeal are liable to be dismissed.” 6. We have carefully considered the rival submissions, perused We have carefully considered the rival submissions, perused We have carefully considered the rival submissions, perused the orders of the authorities below and examined the material the orders of the authorities below and examined the material the orders of the authorities below and examined the material available on record.

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6.1 The short controversy arising in the present appeal concerns The short controversy arising in the present appeal concerns The short controversy arising in the present appeal concerns the assessee's claim of deduction under sec the assessee's claim of deduction under section 80GGC of the Act tion 80GGC of the Act in respect of an alleged donation of in respect of an alleged donation of ₹4,00,000/- made to made to Rashtriya Samajwadi Party (Secular) Samajwadi Party (Secular) during the relevant previous year. during the relevant previous year.

6.2 The Assessing Officer disallowed the claim principally on the The Assessing Officer disallowed the claim principally on the The Assessing Officer disallowed the claim principally on the basis of information received from the Investigation Wing pursuant basis of information received from the Investigation Wing pursuant basis of information received from the Investigation Wing pursuant to a search action conducted in the case of a group of Registered to a search action conducted in the case of a group of Registered to a search action conducted in the case of a group of Registered Unrecognized Political Parties ("RUPPs"). According to the Assessing Unrecognized Political Parties ("RUPPs"). According to the A Unrecognized Political Parties ("RUPPs"). According to the A Officer, the search unearthed a systematic arrangement whereby Officer, the search unearthed a systematic arrangement whereby Officer, the search unearthed a systematic arrangement whereby donations donations donations were were were received received received through through through banking banking banking channels channels channels and and and subsequently returned in cash after deduction of commission. The subsequently returned in cash after deduction of commission. The subsequently returned in cash after deduction of commission. The Assessing Officer further noted that the concerned political party Assessing Officer further noted that the concerned political party Assessing Officer further noted that the concerned political party failed to comply with statutory requirements relating to filing of failed to comply with statutory requirements relating to filing of failed to comply with statutory requirements relating to filing of contribution reports and audited accounts and that material contribution reports and audited accounts and that material contribution reports and audited accounts and that material gathered during search proceedings indicated that the entity was gathered during search proceedings indicated that the entity was gathered during search proceedings indicated that the entity was being used primarily for facilitating accommodation entries in the being used primarily for facilitating accommodation entries in being used primarily for facilitating accommodation entries in guise of political donations. guise of political donations. 6.3 The learned CIT(A), after an elaborate examination of the The learned CIT(A), after an elaborate examination of the The learned CIT(A), after an elaborate examination of the factual background and legal position, affirmed the disallowance. factual background and legal position, affirmed the disallowance. factual background and legal position, affirmed the disallowance. uthority observed that mere production of The ld First Appellate A ld First Appellate Authority observed that mere production of donation receipts and proof donation receipts and proof of payment through banking channels of payment through banking channels could not, by themselves, establish the genuineness of the could not, by themselves, establish the genuineness of the could not, by themselves, establish the genuineness of the transaction when substantial material existed indicating that the transaction when substantial material existed indicating that the transaction when substantial material existed indicating that the

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recipient entity itself was engaged in providing accommodation recipient entity itself was engaged in providing accommodation recipient entity itself was engaged in providing accommodation entries. The learned CIT(A) furt entries. The learned CIT(A) further held that the assessee had failed her held that the assessee had failed to discharge the burden of proving the bona fides of the claim, to discharge the burden of proving the bona fides of the claim, to discharge the burden of proving the bona fides of the claim, particularly in the backdrop of the findings emerging from the particularly in the backdrop of the findings emerging from the particularly in the backdrop of the findings emerging from the search proceedings and subsequent investigations. search proceedings and subsequent investigations. Grounds relating to genuineness of donati Grounds relating to genuineness of donation under section on under section 80GGC

6.4 The principal contention of the assessee is that he had The principal contention of the assessee is that he had The principal contention of the assessee is that he had discharged the burden cast upon him by law by producing the discharged the burden cast upon him by law by producing the discharged the burden cast upon him by law by producing the donation receipt, proof of payment through banking channels and donation receipt, proof of payment through banking channels and donation receipt, proof of payment through banking channels and the registration details of the political party. the registration details of the political party. According to the According to the assessee, once these documents were furnished, no adverse assessee, once these documents were furnished, no adverse assessee, once these documents were furnished, no adverse inference could be drawn merely on account of alleged irregularities inference could be drawn merely on account of alleged irregularities inference could be drawn merely on account of alleged irregularities committed by the recipient political party. committed by the recipient political party.

6.5 We are unable to accept the aforesaid submission in the facts of We are unable to accept the aforesaid submission in the facts of We are unable to accept the aforesaid submission in the facts of the present case. The issue before us is not whether the payment The issue before us is not whether the payment The issue before us is not whether the payment was routed through banking channels. was routed through banking channels. The issue he issue is also not confined to the existence of a receipt acknowledging the payment. confined to the existence of a receipt acknowledging the payment. confined to the existence of a receipt acknowledging the payment. The real question is whether the transaction was genuine and The real question is whether the transaction was genuine and The real question is whether the transaction was genuine and whether the claim of deduction represents a her the claim of deduction represents a bona fide bona fide contribution contemplated under section 80GGC of the Act. contemplated under section 80GGC of the Act.

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6.6 It is a settled principle that the apparent may not necessarily be It is a settled principle that the apparent may not necessarily be It is a settled principle that the apparent may not necessarily be accepted as real when surrounding circumstances and attendant accepted as real when surrounding circumstances and attendant accepted as real when surrounding circumstances and attendant facts create serious doubts regarding the genuineness of the rious doubts regarding the genuineness of the rious doubts regarding the genuineness of the transaction. The taxing authorities are entitled to examine the transaction. The taxing authorities are entitled to examine the transaction. The taxing authorities are entitled to examine the reality of a transaction on the touchstone of human probabilities, reality of a transaction on the touchstone of human probabilities, reality of a transaction on the touchstone of human probabilities, surrounding circumstances and preponderance of probabilities as surrounding circumstances and preponderance of probabilities as surrounding circumstances and preponderance of probabilities as explained by the Hon'ble Supreme Court in e Hon'ble Supreme Court in CIT v. Durga Prasad CIT v. Durga Prasad More (supra) and Sumati Dayal v. CIT Sumati Dayal v. CIT (supra).

6.7 In the present case, the assessee was specifically confronted In the present case, the assessee was specifically confronted In the present case, the assessee was specifically confronted with the information received from the Investigation Wing that the with the information received from the Investigation Wing that the with the information received from the Investigation Wing that the recipient political party was one of the entities found during search recipient political party was one of the entities found during search recipient political party was one of the entities found during search proceedings to be engaged in facilitating accommodation entries. proceedings to be engaged in facilitating accommodation proceedings to be engaged in facilitating accommodation The assessee was also informed that statements recorded from key The assessee was also informed that statements recorded from key The assessee was also informed that statements recorded from key persons associated with the said political party disclosed a modus persons associated with the said political party disclosed a modus persons associated with the said political party disclosed a modus operandi whereby donations received through banking channels operandi whereby donations received through banking channels operandi whereby donations received through banking channels were returned to donors in cash after deduction of commission. were returned to donors in cash after deduction of com were returned to donors in cash after deduction of com

6.8 Significantly, the assessee did not bring any material on record Significantly, the assessee did not bring any material on record Significantly, the assessee did not bring any material on record to rebut the aforesaid findings. No representative or office bearer of to rebut the aforesaid findings. No representative or office bearer of to rebut the aforesaid findings. No representative or office bearer of the recipient political party was produced. No evidence was the recipient political party was produced. No evidence was the recipient political party was produced. No evidence was furnished to establish any genuine nexus, assoc furnished to establish any genuine nexus, association or ideological iation or ideological connection between the assessee and the political party. No connection between the assessee and the political party. No connection between the assessee and the political party. No explanation was offered as to what prompted the assessee, a explanation was offered as to what prompted the assessee, a explanation was offered as to what prompted the assessee, a salaried employee, to contribute such a substantial amount to a salaried employee, to contribute such a substantial amount to a salaried employee, to contribute such a substantial amount to a

Manoj Jayram Sarang 28 ITA No. 2531/MUM/2026

political party which admittedly had no demonstrated political political party which admittedly had no demonstrat political party which admittedly had no demonstrat presence or activity relatable to the assessee. presence or activity relatable to the assessee.

6.9 The donation of ₹ ₹4,00,000/- constitutes a substantial portion of constitutes a substantial portion of the the the assessee's assessee's assessee's returned returned returned income. income. income. Yet, Yet, Yet, beyond beyond beyond the the the formal formal formal documentation documentation documentation generated generated generated as as as part part part of of of the the the transaction, transaction, transaction, no no no independent material has been brought on record to establish the rial has been brought on record to establish the rial has been brought on record to establish the genuineness of the contribution. In our considered view, once the genuineness of the contribution. In our considered view, once the genuineness of the contribution. In our considered view, once the Revenue placed on record cogent material creating serious doubts Revenue placed on record cogent material creating serious doubts Revenue placed on record cogent material creating serious doubts about the bona fides of the recipient entity, the burden shifted upon about the bona fides of the recipient entity, the burden shifted upon about the bona fides of the recipient entity, the burden shifted upon the assessee to dispel such doubts by producing credible evidence. sessee to dispel such doubts by producing credible evidence. sessee to dispel such doubts by producing credible evidence. The assessee failed to discharge that burden. The assessee failed to discharge that burden.

Ground that donor cannot be penalised for acts of the donee Ground that donor cannot be penalised for acts of the donee Ground that donor cannot be penalised for acts of the donee

6.10 The assessee has argued that any violation committed by the The assessee has argued that any violation committed by the The assessee has argued that any violation committed by the recipient political part recipient political party cannot be attributed to the donor and that y cannot be attributed to the donor and that the donor's obligation ends once payment is made through the donor's obligation ends once payment is made through the donor's obligation ends once payment is made through permissible banking channels. permissible banking channels.

6.11 The proposition, stated in such broad terms, cannot be The proposition, stated in such broad terms, cannot be The proposition, stated in such broad terms, cannot be accepted. While it may be correct that a donor cannot ordinarily be accepted. While it may be correct that a donor cannot ordinarily accepted. While it may be correct that a donor cannot ordinarily held liable for every subsequent act of the recipient, the present held liable for every subsequent act of the recipient, the present held liable for every subsequent act of the recipient, the present case does not concern subsequent utilization of donated funds. case does not concern subsequent utilization of donated funds. case does not concern subsequent utilization of donated funds. Rather, the issue is whether the very claim of donation itself is Rather, the issue is whether the very claim of donation itself is Rather, the issue is whether the very claim of donation itself is genuine. Where credible material exists to indicate that Where credible material exists to indicate that Where credible material exists to indicate that the

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recipient entity was functioning as a conduit for providing recipient entity was functioning as a conduit for providing recipient entity was functioning as a conduit for providing accommodation entries and that the transaction lacked commercial accommodation entries and that the transaction lacked commercial accommodation entries and that the transaction lacked commercial or factual credibility, the donor cannot seek deduction merely by or factual credibility, the donor cannot seek deduction merely by or factual credibility, the donor cannot seek deduction merely by relying upon banking documents and receipts. The genuineness of relying upon banking documents and receipts. The genuineness relying upon banking documents and receipts. The genuineness the claim remains open to examination and must be established on the claim remains open to examination and must be established on the claim remains open to examination and must be established on the basis of the totality of circumstances. the basis of the totality of circumstances.

Ground relating to violation of principles of natural justice Ground relating to violation of principles of natural justice Ground relating to violation of principles of natural justice

6.12 The assessee has further alleged violation of principles of The assessee has further alleged violation of principles of The assessee has further alleged violation of principles of natural justice on the ground that statements recorded during on the ground that statements recorded during on the ground that statements recorded during search proceedings were relied upon without affording an search proceedings were relied upon without affording an search proceedings were relied upon without affording an opportunity of cross-examination. examination.

6.13 We do not find merit in the contention. We do not find merit in the contention. The reassessment The reassessment proceedings were initiated on the basis of information emanating proceedings were initiated on the basis of information em proceedings were initiated on the basis of information em from search and investigation proceedings. The assessee was from search and investigation proceedings. The assessee was from search and investigation proceedings. The assessee was informed of the nature of allegations and was afforded opportunity informed of the nature of allegations and was afforded opportunity informed of the nature of allegations and was afforded opportunity to explain the transaction. The addition has not been made solely to explain the transaction. The addition has not been made solely to explain the transaction. The addition has not been made solely on the basis of any isolated statement. Rather, it rests upon a on the basis of any isolated statement. Rather, it rest on the basis of any isolated statement. Rather, it rest cumulative consideration of the search findings, the conduct of the cumulative consideration of the search findings, the conduct of the cumulative consideration of the search findings, the conduct of the political party, its statutory non political party, its statutory non-compliances, the statements of compliances, the statements of persons controlling the entity, and the inability of the assessee to persons controlling the entity, and the inability of the assessee to persons controlling the entity, and the inability of the assessee to establish establish establish the the the genuineness genuineness genuineness of of of the the the claim claim claim despi despi despite specific opportunities.

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6.14 Furthermore, it is the assessee who has claimed donation as it is the assessee who has claimed donation as it is the assessee who has claimed donation as deduction against taxable income by way of paying donation to the deduction against taxable income by way of paying donation to the deduction against taxable income by way of paying donation to the Political party, therefore, in the situation of any doubt raised on Political party, therefore, in the situation of any doubt raised on Political party, therefore, in the situation of any doubt raised on such claim the onus was on the such claim the onus was on the assessee to produced such person assessee to produced such person rather than seeking cross examination of that person form the AO. rather than seeking cross examination of that person form the AO. rather than seeking cross examination of that person form the AO.

Grounds relating to interest and consequential demand Grounds relating to interest and consequential demand Grounds relating to interest and consequential demand

6.15 The grounds challenging levy of interest under sections 234A, The grounds challenging levy of interest under sections 234A, The grounds challenging levy of interest under sections 234A, 234B and 234C and the consequentia 234B and 234C and the consequential demand raised under l demand raised under section 156 are purely consequential in nature. section 156 are purely consequential in nature.

6.16 Since the substantive addition has been upheld, the levy of Since the substantive addition has been upheld, the levy of Since the substantive addition has been upheld, the levy of statutory interest shall survive subject to arithmetical verification statutory interest shall survive subject to arithmetical verification statutory interest shall survive subject to arithmetical verification and computation in accordance with law. and computation in accordance with law.

6.17 Upon an overall consideration of the facts and circumstances Upon an overall consideration of the facts and circumstances Upon an overall consideration of the facts and circumstances of the case, we are satisfied that the Assessing Officer as well as the of the case, we are satisfied that the Assessing Officer as well as the of the case, we are satisfied that the Assessing Officer as well as the learned CIT(A) have correctly appreciated the evidence and learned CIT(A) have correctly appreciated the evidence and learned CIT(A) have correctly appreciated the evidence and surrounding circumstances. The assessee has failed to establish the surrounding circumstances. The assessee has failed to establish surrounding circumstances. The assessee has failed to establish genuineness of the claim for deduction under section 80GGC genuineness of the claim for deduction under section 80GGC genuineness of the claim for deduction under section 80GGC beyond the production of formal documentation. The surrounding beyond the production of formal documentation. The surrounding beyond the production of formal documentation. The surrounding circumstances, the findings emerging from the search proceedings, circumstances, the findings emerging from the search proceedings, circumstances, the findings emerging from the search proceedings, the conduct of the recipient entity, and the absence of any the conduct of the recipient entity, and the absence of any the conduct of the recipient entity, and the absence of any satisfactory explanation from the assessee collectively justify the isfactory explanation from the assessee collectively justify the isfactory explanation from the assessee collectively justify the disallowance made by the Revenue authorities. disallowance made by the Revenue authorities.

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6.18 We, therefore, find no infirmity in the impugned order of the We, therefore, find no infirmity in the impugned order of the We, therefore, find no infirmity in the impugned order of the learned CIT(A) warranting interference. All the grounds raised by learned CIT(A) warranting interference. All the grounds raised by learned CIT(A) warranting interference. All the grounds raised by the assessee stand dismissed. stand dismissed.

Order pronounced in the open Court on Order pronounced in the open Court on 17/06/2026. /2026.

Sd/- Sd/-

(ANIKESH BANERJEE ANIKESH BANERJEE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 17/06/2026 Kunal Kr, P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER,

//True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai