GUNJAN DIPAKBHAI SHAH,AHEMDABAD vs. WARD 7(2)(1), AHMEDABAD/, VEJALPUR, AHEMDABAD

On the facts and circumstances of the case and in law ld. Commissioner of Income Tax (Appeals) erred in upholding the decision of Id. AO in issuing notice under section 148 of the Act in violation of Instructions and law rendering the notice void and bad in law The Appellant prays that the said notice and proceedings be declared illegal, time barred, bad in law and be quashed.

On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) erred in upholding the decision of learned Assessing Officer in disallowing the deduction claimed amounting to Rs.3,00,000/- under section 80GGC. Therefore, the assessee prays that the said order is arbitrary and liable to be quashed.

On the facts and circumstances of the case and in law the learned CIT(A) erred in upholding the decision of learned AO in making addition based on Unconfronted material and without providing opportunity of cross examination. In view of the same the Appellant prays that the said order is arbitrary and liable to be quashed and set aside.”

The brief case of the assessee is that the assessee has filed his return of income for the year under consideration declaring total income of Rs.20,73,520/-, which included a deduction of Rs.3,00,000/- claimed u/s 80GGC of the Act in respect of donation made to Apna Desh Party, a Registered Unrecognised Political Party (RUPP). The donation was made through banking channels and was supported by a donation receipt. Subsequently, on the basis of information emanating from search and seizure proceedings conducted by the Investigation Wing in the cases of various RUPPs, including Apna Desh Party, the assessment was reopened. During the reassessment proceedings, the assessee furnished the donation receipt, bank statements and other relevant documents and submitted that the donation was genuine and that no amount had been received back by him. The Assessing Officer, relying upon the findings of the Investigation Wing regarding the alleged accommodation-entry activities of Apna Desh Party, disallowed the deduction of Rs.3,00,000/- claimed u/s 80GGC and treated the same amount as unexplained money u/s 69A r.w.s. 115BBE of the Act.

On appeal, the Ld. CIT(A), vide order dated 12.12.2025, upheld the action of the Assessing Officer, observing that the Investigation Wing had established the modus operandi of Apna Desh Party in providing - 3– accommodation entries and that the assessee had failed to establish the genuineness of the donation beyond the primary documentary evidence.

Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal

We have heard the rival contentions and perused the material available on record.

By way of these grounds, the assessee has challenged the initiation of reassessment proceedings and the validity of the notice issued under section 148 of the Act.

We find that the Ld. CIT(A) examined these objections and upheld the reassessment proceedings, observing that the notice was issued on the basis of tangible information concerning the alleged accommodation-entry activities of the political party and that the requisite approval had been obtained. In the absence of any further material warranting interference with the findings of the Ld. CIT(A), these grounds are dismissed.

We note that the identical issue concerning bogus political donations claimed under section 80GGC of the Act was considered by the Co-ordinate Bench in ITA No.1017/Ahd/2023, vide order dated 30.04.2025, wherein, upon consideration of the investigation material, bank trail and modus operandi of the recipient political party, the disallowance under section 80GGC was upheld.

We also find that similar issue stands adjudicated by the Co- ordinate benches of this Tribunal in the cases of :- (i) Mihir Bipinbhai Parekh Vs. DCIT (ITA No. 1173/Mum/2026), (ii) CIT-1, Rajkot (ITA No.93/RJT/2023), 8546/Mum/2025), (iii) Rajen Jayantilal Merchant Vs. ITO (ITA No. 1683/Ahd/2025), (iv) Saurabh Pravinbhai Patel Vs. ITO (ITA No. 1017/Ahd/2023).

For the sake of ready reference, the detailed adjudication in the case of Milind Pankajbhai Shroff, vs The Pr. CIT 1, Rajkot in ITA No.93/RJT/2023 dtd 20/05/2024 is reproduced as under :- "

Now, we shall also adjudicate the other arguments advanced by Id. 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, which are as follows: (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 Ahmedabad. This party was established on 21.10.2008 and its registered address as per its website is Samruddhi Complex, Opp- Sakar-3, Income Tax Circle, Ahmedabad. However, during pre-search enquiry, no party office is found at the aforesaid address. (ii) The modus-operandi of this political party is that the donation is received through cheque in the bank account of the party and then routed 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 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 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 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 declaration made on oath by Smt. Sandhya Singh that although she is national party president of the party, however, all Gunjan Dipakbhai Shah Vs. ITO - 5– the work related with party is being looked-after by her husband Shri Bishwajeet Singh. She was not aware about any activity of the party. Further, vide Q. No. 18 and 19, she was categorically asked regarding details of bank accounts, books 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 aware of any details regarding these subjects. She stated that all these 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 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, his wife Smt. Sandhya Singh joined RSP, as president. During the statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. 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 inception of the party. He further stated that after deducting certain commission donations are being returned to the donors. (v) Furthermore, Shri Bishwajeet Singh stated that these affairs are also being the handled by the Shri Ritesh Shah. Shri Bishwajit Singh submitted list of some bogus entities used for cash generation, which is reproduced by Id PCIT on page number 13 of his order. (vi) During the post search inquiries, statement of Shri Amitkumar Chaturvedi (AHLPC7736R), past president of political party was also recorded, he categorically admitted that the party was engaged in bogus donations scam. (vii) It is relevant to refer to the fact that on verification with the website of regional Chief Electoral Officer where the party is registered i.e. CEO, Gujarat State, it has been found that Rashtriya Samajwadi Party (Secular) has not filed any contribution report, since F.Y. 2013-14 onward. (viii) The party been claiming wrong and invalid exemption, over the years under section 13A of the I.T. Act but it has also been, mentioning in its Income Tax Return of F.Y. 2018-19 that no contribution report has been filed u/s 29C of the R.P. Act, 1951. (ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as informed by Id Counsel for the assessee, with Election Commission of India/R.P. Act, 1951. Gunjan Dipakbhai Shah Vs. ITO - 6– (x) There is no retraction of statements given by Smt. Sandhay Singh, Shri Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct and valid. On analysis of gathered data of the conducted search, it was learnt that these RUPP's are either not carrying out any sort of genuine political or social activity or they are carrying out such activities to project themselves as genuine parties. However, in reality these political parties are being used as a vehicle of accommodation entries under the garb of political activities. The biggest advantage of creating a façade of a political party to propagate the accommodation entry scam is the fact that the income of political party is completely exempt from taxation as long as conditions laid down in section 13A of the Act, are satisfied. The persons making donations to such organizations, at the same time received back the donations made by them in the form of cash after deduction of certain percentage of commission. By this way, the assessee i.e. the donor becomes eligible for the deduction u/s 80GGC of the Act and evades the income tax liability by claiming 100% deduction on donated amount irrespective of his/her ITR. Further, In the light of disclosures made by Shri Suryanath Chaturvedi the former president and founder member of RSP (Secular), it is an established fact the Rashtriya Samajwadi Party has been formed to carry out bogus donations scam and bogus donation activities are being carried out from the inception of the party. All the party presidents from the inception have admitted that the RUPP is involved in the bogus donation scam. Moreover, Umapati IT Solution is a paper entity and has been used for layering of bogus donation received in the bank accounts of RSP(Secular).

From the above facts, it is abundantly clear that donation received by "Rashtriya Samajwadi Party" is bogus. The assessee has claimed deduction under Section 80GGC of the Act, and 80G(5) of the Act, which is also bogus and to that extent Assessment Order passed by assessing officer is erroneous and prejudicial to the interest of Revenue. There is a saying that The 'tail' cannot wag the 'dog'. When there is a fraud, then the details and documents submitted by the assessee, before the assessing officer, during the assessment proceedings, do not assist the assessee in any manner, that is, the assessee cannot take the plea that he has submitted enough documents and details before the assessing officer and assessing officer has taken the plausible view. For that reliance can be placed - 7– on the judgment of the Coordinate Bench of ITAT Pune, in the case of Abhishek Ashok Lohade in ITA No.816/PUN/2018, order dated 22.11.2022. From the above facts and relying on the decision cited above, it is abundantly clear that donation received by "Rashtriya Samajwadi Party" is bogus. The assessee has claimed deduction under Section 80GGC of the Act, which is also bogus and to that extent the assessment order passed by assessing officer in disallowing the deduction claimed by the assessee u/s 80GGC to the tune of Rs.xxxxx/- is upheld."

It is now well settled by the Hon'ble Supreme Court in the cases of CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) that the taxing authorities are not required to put on blinkers while examining a transaction merely because it is supported by documentary evidence. They are entitled to look beyond the apparent, examine the surrounding circumstances, apply the test of human probabilities and ascertain the real nature of the transaction. Where the cumulative facts and attending circumstances establish that the apparent is not the real, the Revenue is justified in drawing an inference based on the preponderance of probabilities. In the present case, the investigation material, statements recorded under section 132(4), bank trail analysis and the established modus operandi of the recipient political party constitute a complete chain of circumstances which overwhelmingly demonstrate that the impugned donation was merely an accommodation entry and not a genuine contribution eligible for deduction under section 80GGC of the Act.

In view of the foregoing discussion, the material brought on record by the Revenue, the findings emerging from the investigation and respectfully following the consistent view taken by the Co-ordinate Benches of this Tribunal in identical matters, we hold that the assessee - 8–

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