SURENDRA KUMAR,MAHARASHTRA vs. INCOME TAX OFFICER, WARD 4(2)(1), BANGALORE, BENGALURU

ITA 655/BANG/2026Status: DisposedITAT Bangalore30 September 2026AY 2019-2016 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Grounds No. 1 and 2, relating to the validity of reassessment and faceless assessment, were dismissed as not pressed, as no submissions were made by the assessee on these points. Regarding Grounds No. 3-10, concerning the disallowance of deduction under section 80-GGC, the Tribunal found no merit in the assessee's submissions. It noted that the issue was not merely about the payment being routed through banking channels or the receipt being acknowledged, but about the genuineness of the transaction. The Tribunal agreed with the revenue that the RUPPs, including SVPP, existed to provide accommodation entries through bogus donations. The categorical admission by SVPP office bearers regarding the bogus donation scam, coupled with documentary evidence and bank account analysis showing circuitous transactions, cast serious doubt on the assessee's claim. The Tribunal found that the assessee failed to discharge the burden of proving the genuineness of the donation by producing credible evidence. The reliance on human probabilities, surrounding circumstances, and preponderance of probabilities, as supported by Supreme Court judgments, was deemed appropriate. The Tribunal concluded that the AO and CIT(A) rightly denied the deduction. Ground No. 11, pertaining to penalty proceedings under section 270A, was dismissed as premature. The appeal was dismissed in its entirety.

What were the facts?

The assessee, Surendra Kumar, filed an appeal against the order dated 24.12.2025 passed by the learned CIT(A) for assessment year 2019-20. The assessee claimed a deduction of Rs. 3,00,000/- under section 80-GGC for a donation to Sardal Vallabhbhai Patel Party (SVPP), a Registered Unrecognized Political Party (RUPP). Information from an investigation wing search on RUPPs in Ahmedabad revealed that SVPP was involved in receiving bogus donations in exchange for cash. The Assessing Officer (AO) initiated reassessment proceedings under section 147, issuing a notice under section 148A(b). The assessee responded by stating he received salary income and provided Form 16 and Form 26AS. However, lacking evidence for the donation's genuineness, the AO disallowed the deduction and added Rs. 3,00,000/- to the assessee's total income. The CIT(A) upheld this disallowance.

What were the issues?

1. Whether the reassessment proceedings initiated under section 147 of the Act were valid, given that mandatory jurisdictional conditions for reopening were not satisfied (Question of law and fact, turning on Section 147). 2. Whether the notice under section 148 was valid, having been issued by the Jurisdictional Assessing Officer instead of through automated allocation under the Faceless Assessment Scheme, rendering the proceedings void ab initio (Question of law, turning on Faceless Assessment Scheme provisions). 3. Whether the addition of Rs. 3,00,000/- by disallowing deduction under section 80-GGC was justified, despite the donation being made through banking channels to a registered political party and supported by receipts (Question of mixed law and fact, turning on Section 80-GGC). 4. Whether the CIT(A) erred in disregarding the assessee's bona fide belief and genuine intent, treating the donation as an accommodation entry without direct evidence of cash-back transactions (Question of fact, turning on Section 80-GGC). 5. Whether the CIT(A) erred in relying on third-party statements, unverified loose papers, and WhatsApp chats without providing copies or allowing cross-examination, violating principles of natural justice (Question of law, turning on principles of natural justice and Section 80-GGC). 6. Whether the CIT(A) erred in ignoring documentary evidence like donation receipts and bank statements substantiating the claim's genuineness (Question of fact, turning on Section 80-GGC). 7. Whether the CIT(A) erred in failing to appreciate that once statutory conditions under section 80-GGC are fulfilled, deduction cannot be denied based on generalized allegations against the political party (Question of law, turning on Section 80-GGC). 8. Whether the CIT(A) erred in disregarding the assessee's bona fide intent in making the donation through banking channels without personal gain (Question of fact, turning on Section 80-GGC). 9. Whether the CIT(A) erred in failing to appreciate that the assessee acted in good faith and was unaware of any alleged fabricated nature in the political party's operations at the time of donation (Question of fact, turning on Section 80-GGC). 10. Whether the CIT(A) erred in confirming an assessment order based on surmises, conjectures, and borrowed satisfaction without independent inquiry (Question of law, turning on assessment principles). 11. Whether the CIT(A) erred in sustaining the initiation of penalty proceedings under section 270A (Question of law, turning on Section 270A). Assessee's Contentions: The assessee argued that the donation was genuine, made through banking channels, supported by receipts, and that the CIT(A) erred in disregarding his bona fide belief, intent, and documentary evidence. He also contended that denial of deduction based on generalized allegations against the political party was incorrect and that principles of natural justice were violated by relying on unverified third-party material. The assessee also challenged the validity of reassessment and faceless assessment procedures. Revenue's Contentions: The revenue, through the CIT(A)'s order, relied on findings from the investigation wing's search which indicated that SVPP was involved in a bogus donation scam, receiving donations via cheque and returning cash after deducting commission. The office bearers of SVPP admitted to this modus operandi. The revenue argued that the transaction's genuineness needed to be examined based on human probabilities and surrounding circumstances, citing Durga Prasad More and Sumati Dayal.

Which sections of the Income-tax Act were involved?

Section 147,Section 250,Section 148,Section 148A,Section 144B,Section 80-GGC,Section 132,Section 143(1)(a),Section 270A,Section 29C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SANDEEP SINGH KARHAIL

PER SANDEEP SINGH KARHAIL, JUDICIAL MEMBER:

The assessee has filed the present appeal against the impugned order dated 24.12.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT

The order continues below.

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