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Facts
The assessee filed an income tax return for AY 2019-2020 declaring income of INR 23,00,390, including a deduction of INR 2,00,000 under Section 80GGC. During reassessment proceedings, the assessee filed a revised return declaring INR 28,43,930 and did not claim the Section 80GGC deduction. The assessee contended that this resulted in the INR 2,00,000 donation income being taxed twice.
Held
The Tribunal found merit in the assessee's contention regarding the double taxation of the INR 2,00,000 donation amount. It was held that the assessee mistakenly failed to reduce the business income downwards by INR 2,00,000 in the revised return after surrendering the Section 80GGC deduction.
Key Issues
Whether the assessee offered the same donation amount to tax twice, first by including it in business income and second by surrendering the deduction.
Sections Cited
Section 147, Section 144B, Section 80GGC, Section 139(1), Section 148
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Income Tax Appellate Tribunal, “K (SMC
order : 26.02.2026 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 30/10/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 20/01/2025, passed under Section 147 read with Section 144B of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2019-2020.
2. The Assessee has raised the following grounds of appeal which read as under:
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT has erred in considering the fact that the assessee has by Assessment Year 2019-2020 mistake added the income twice and have failed to appreciate the fact that the assessee had already disallowed the donation expenses, of Rs.2,00,000/-, by adding the same to her business Income (570858 + 200000 equals to 770858) and simultaneously not claiming the deduction u/s 80GGC of Chapter VIA of the Act.
On the facts and circumstances of case and in law, the Ld. CIT has erred in confirming the Assessment Order passed by the Ld. AO who failed to compute the assessed income correctly by accepting the reversal of donation expenses of Rs.2,00,000/- as business income and miscellaneous income of Rs.2,00,000/-resulting in double taxation. The assessee thereby prays that the same may be reduced from the income of the assessee.
3. On the facts and circumstances of case and in law, the Ld. CIT has erred in confirming the Assessment Order passed by the Ld. AO without considering the mechanical mistake incurred by the assessee.”
We have considered the rival submissions and have perused the material on record.
It emerges that the Assessee, an individual, filed income tax return for the Assessment Year 2019-2020 declaring total income of INR.23,00,390/- on 30/08/2019 after claiming deduction under Section 80GGC of the Act towards donation made to political party (i.e., Kisan Party of India) amounting to INR.2,00,000/-. When the reassessment proceedings were initiated in the case of the Assessee, the Assessee filed return of income on 19/05/2023 in response to notice issued under Section 148 of the Act. The Assessee declared total income of INR.28,43,930/- and did not claim deduction of INR.200,000/- under Section 80GGC of the Act (as claimed in the original return of income).
The contention of the Assessee is that during the reassessment proceedings the Assessee had pointed out to the Assessing Officer that 2 Assessment Year 2019-2020 the Assessee had offered additional income of INR.200,000/- to tax and had not claimed deduction of INR.2,00,000/- under Section 80GGC of the Act. Thus, the Assessee had, mistakenly, offered to tax income of INR.2,00,000/- twice. The Assessing Officer completed the assessment proceedings and passed order under Section 148 of the Act assessing the total income of the Assessee at INR.28,43,930/- as per the return of income filed by the Assessee in response to notice issue under Section 148 of the Act. The Learned CIT(A) also declined to grant any relief and therefore, the Assessee has carried the issue in appeal before us.
On perusal of record we note that the Assessee had filed return of income for the Assessment Year 2019-2020 under Section 139(1) of the Act declaring income of INR.23,00,390/-. Thereafter, the Assessee filed return declaring income of INR.28,43,390/- in response to notice issued under Section 148 of the Act.
On comparing the computation of income filed with the original return of income and revised return of income, we find that as per the original as well as the revised computation of income, the Assessee had offered to tax INR.7,70,858/- as Business Income.
However, the Assessee offered to tax additional income of INR.200,000/- as Income from Other Sourced in the revised computation of income. Further, the Assessee had claimed INR.200,000/- as deduction under Section 80GGC of the Act as per the original computation of income, whereas the Assessee did not make such claim as per the revised computation of income. As a result, the aggregate deduction claimed reduced from INR.4,49,262/- to INR.2,43,262/-. Thus, the Assessee had surrendered the claim of deduction of INR.200,000/- under Section 80GGC of the Act and had offered to tax additional income of INR.200,000/- under the head ‘Income from Other Sources’ in the revised return. 3 Assessment Year 2019-2020
The case of the Assessee is that by doing as above, the Assessee had offered to tax additional income of 4,00,000/- instead of additional income of INR.200,000/-. We do not find merit in the aforesaid contention advanced on behalf of the Assessee. We note at the time of initiation of reassessment proceedings a sale transaction of INR.200,000/- (with Jinal Pankajbhai Shah) was also got flagged on the insight portal. In our view, additional income of INR.200,000/- offered to tax by the Assessee under the head Income from Other Sources in the revised return of income pertained to the aforesaid sale transaction.
At the same time, we note that in the original computation of income, the Assessee has shown that Business Income of INR.7,70,858/- which included ‘Donation considered separately’ of INR.200,000/-. Before the Learned CIT(A), the Assessee had raised Ground No. 3 contending that the Assessee had already disallowed donation by making addition of INR.2,00,000/- to her Business Income. We note that the revised return while the Assessee surrendered the deduction claimed under Section 80GGC of the Act, the Assessee had again offered to tax Business Income of INR.7,70,858/- (which included donation amount of INR.200,000/-). Thus, by mistake, the Assessee failed to revise the Business Income downwards by INR.200,000/- and ended up suffering tax twice on amount of INR.200,000/-. First time by making addition of INR.200,000/- to the Business Income and Second time by surrendering deduction of INR,200,000/- earlier claimed under Section 80GGC of the Act.
Therefore, to this extent, we find merit in the contention of the Assessee. Accordingly, we direct the Assessing Officer to re-compute the total taxable income of the Assessee and the corresponding tax liability by taking Business Income of Assessee as INR.5,70,858/- (as against INR.7,70,858/-). In terms of the aforesaid Ground No. 1 raised 4 Assessment Year 2019-2020 by the Assessee is allowed while Ground No. 2 and 3 are rejected.
In terms of above, the present appeal preferred by the Assessee is partly allowed.