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Facts
The assessee filed an appeal against the order of the CIT(A) confirming additions made by the AO. The AO had added a sum for bogus donation and other exemptions/deductions, reopening the assessment based on information from a search and seizure operation on the political party to which the donation was allegedly made.
Held
The Tribunal noted that the AO's addition was based on a search and seizure action, but the material substantiating the bogus donation finding was not discussed. The CIT(A) also did not specify the basis for finding the party to be a sham entity. The issue of TDS credit was also not decided in favor of the assessee. Therefore, the Tribunal deemed it appropriate to provide another opportunity to the assessee.
Key Issues
Whether the disallowances of tax credit, exemptions/deductions, and donation were justified, and whether a reasonable opportunity of hearing was provided.
Sections Cited
250, 80GGC, 80GGB, 80G, 132, 148, 147, 144, 144B, 234A, 234B, 234C, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2019-20 dated 29.08.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in upholding the disallowance of tax credit of Rs. 40,23,539.00 despite the credit being duly corroborated by Form 16, correctly claimed in the return of income, and fully reflected in the assessee's Form 26AS.
The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining the disallowance of exemptions/deductions aggregating to Rs. 7,38,980, without considering that all requisite supporting documents, and bank statement, were duly furnished and placed on record.
The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining the disallowance of the donation of Rs. 100000.00 to Manvadhikar National Party (MNP) without considering that all requisite ITA No.: 2386/KOL/2025 Assessment Year: 2019-20 Ramesh Kumar Damani. supporting documents, and bank statement, were duly furnished and placed on record
The learned Commissioner of Income Tax (Appeals) erred in law by not providing reasonable opportunity of hearing during the appeal proceedings
Excessive Interest U/s 234A, 234B and 234C should be deleted”
Brief facts of the case are that the assessee is an individual and had filed his original return of income on 30.08.2019 for the AY 2019- 20 declaring total income of ₹1,12,76,680/-. Later on, the Assessing Officer (hereinafter referred to as Ld. 'AO') received specific information that the assessee had made bogus donation to the tune of ₹1,00,000/- to Manvadhikar National Party and had claimed the same as a deduction u/s 80GGC/80GGB/80G of the Act for the FY 2018-19 relevant to the AY 2019-20. As per the information received, a search and seizure action u/s 132 of the Act was conducted in the case of Manvadhikar National Party (MNP) on 02.02.2021 and it was confirmed from multiple evidences found during the Search & Seizure operation and from the recording of Statement on oath of the key persons involved that the party was involved in providing bogus donation entries to the interested persons. It was confirmed that no political or social work was being carried out by Manvadhikar National Party (MNP) and the bank accounts were used only for providing accommodation entries where amounts were routed for the purpose of returning it to the beneficiaries for facilitating tax evasion. Based on this information, the assessee's assessment was reopened by issuance of notice u/s 148 of Act and in response to which the assessee filed his return of income on 17.05.2023 declaring total income of ₹1,12,76,680/-. The Ld. AO however, added a sum of ₹1,00,000/- as bogus donation and ₹7,38,980/- in respect of exemptions/deductions claimed by the assessee and assessed the total income of the assessee at ₹1,21,15,660/- u/s 147/144/144B of the Act. ITA No.: 2386/KOL/2025 Assessment Year: 2019-20 Ramesh Kumar Damani. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who confirmed the additions made by the Ld. AO and accordingly dismissed the appeal of the assessee.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
None appeared on behalf of the assessee and the case was heard with the assistance of the Ld. DR.
We have considered the submissions made by the Ld. DR, who requested that the order of the Ld. CIT(A) may be confirmed and have also gone through the facts of the case and perused the record and the order of the Ld. CIT(A). The Ld. AO made the addition on the basis of the results of search and seizure action in the case of the political party and the donation was treated as bogus. However, he is not discussed the material on the basis of which the finding of bogus donation was arrived at during the course of the said proceedings. The Ld. CIT(A) as well considered the statement of facts and other details, but has not mentioned as to on what basis MNP was found to be a sham entity. Even the issue of credit of TDS was not decided in favour of the assessee, despite the claim that the same was appearing in Form No. 26AS. Therefore, after examining the facts of the case, the Bench was of the view that one more opportunity needs to be provided to the assessee. Therefore, we deem it appropriate in the interest of justice and fair play to set aside the order of the Ld. CIT(A) and restore the appeal to the Ld. CIT(A) for disposal of the grounds of appeal taken by the assessee on merit by passing a speaking order. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of ITA No.: 2386/KOL/2025 Assessment Year: 2019-20 Ramesh Kumar Damani. appeal and shall not seek unnecessary adjournments and rule 46A of the IT Rules, 1962 shall also be followed and an opportunity of being heard may be provided to the Ld. AO, if required. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 28th January, 2026. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 28.01.2026 Bidhan (Sr. P.S.) ITA No.: 2386/KOL/2025 Assessment Year: 2019-20 Ramesh Kumar Damani. Copy of the order forwarded to:
Ramesh Kumar Damani, C-2603, DB Woods, Krishna Vatika Marg, Gokuldham, Goregaon East, Mumbai, Maharashtra, 400063. 2. DCIT, Circle-61, Kolkata.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order