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Facts
The assessee claimed a deduction of Rs. 2,00,000 under Section 80GGC for a donation made to Kishan Party India. A search action on RUPPs, Ahmedabad, revealed Kishan Party India was involved in providing bogus accommodation entries. Consequently, the assessment was reopened, and the deduction was disallowed by the Assessing Officer.
Held
The tribunal upheld the CIT(Appeals)'s decision, stating that the Revenue failed to establish a direct nexus between the assessee and any benefit received from the alleged bogus donation. No evidence was presented to show the donation was bogus or that the assessee received a refund or backdoor benefit.
Key Issues
The key legal issue was whether the deduction claimed under Section 80GGC for a donation to a political party could be disallowed based on general findings of bogus accommodation entries without specific evidence linking the assessee to such a transaction.
Sections Cited
Section 80GGC, Section 132, Section 148, Section 147, Section 144B
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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM
The present appeal preferred by the Revenue emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 28.11.2025 for the assessment year 2019-20 as per the grounds of appeal on record.
At the time of hearing none appeared for the assessee nor any adjournment petition has been filed. The matter is heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the materials available on record.
Brief facts in this case are that the assessee is an individual and filed his return of income on 07-08-2019 declaring total income at Rs. 33,21,590/- for the year under consideration. As per the information, assessee has made donation of Rs.2,00,000/- to Kishan Party India during F.Y. 2018-19 and claimed deduction under section 80GGC of the Income Tax Act, 1961 (for short ‘the Act’) amounting to Rs.2,00,000/- for such bogus donation. That it transpires consequent upon a search action carried in the case of RUPPs, Ahmedabad u/s.132 of the Act, Kishan Party India was found to be involved in providing bogus accommodation entries and tainted benefits to parties. Therefore, with the prior approval of specified authority, notice u/s. 148 was issued and case was reopened
3 ITO, Korba Vs. Naushad Hassan 20.12.2024 was passed by the A.O at an assessed income of Rs.37,90,890/- after making addition of Rs.2,00,000/- being variation in respect of disallowance of deduction claimed u/s. 80GGC of the Act and Rs.2,69,300/- being variation in respect of deduction claimed under VI-A of the Act in the order passed under section 147 r.w.s 144B of the Income Tax Act.
In the present case, neither the A.O nor the Ld. CIT(Appeals)/NFAC has brought on record any direct nexus of the benefit that was received by the assessee, if any, from such bogus donation transaction. The main fact of the matter is whether it is a bogus donation to decline deduction u/s.80GGC of the Act. But in this case, the Revenue authorities has failed to establish that it is a bogus donation by the assessee or that the said donation was made for getting direct benefit in the process of backdoor entry from such political party. Nothing has been brought on record by the A.O to establish any direct nexus regarding benefit derived by the assessee from the said political party while making the said donation.
At this stage, I find that similar issue has been dealt with by the ITAT, SMC Bench, Raipur in the case of ACIT-1(1), Bilaspur Vs. Anuj Prakash Gupta, dated 05.02.2026 wherein the issue had been decided in favour of the assessee and against the Revenue observing as follows:
4 ITO, Korba Vs. Naushad Hassan “2. In this case, the assessee had claimed deduction of Rs.2 lakhs u/s. 80GGC of the Income Tax Act, 1961 (for short ‘the Act’) for donation given to Rashtriya Samajwadi Party (Secular). That consequent upon search action carried in the case of RUPPs group, Ahmedabad as per Section 132 of the Act, the political party i.e. Rashtriya Samajwadi Party (Secular) was found to be one of the entities that was involved in providing accommodation entries. Based on the information received from Investigation Wing, Ahmedabad that the said political party was involved in providing accommodation entries of bogus donation, the case of the assessee was reopened u/s.147/148 of the Act, wherein the A.O had disallowed deduction of Rs.2 lakhs u/s. 80GGC of the Act.
When the matter went before the first appellate authority, the Ld. CIT(Appeals)/NFAC had deleted the addition observing as follows: “It is not in dispute that the appellant made payment of Rs.2,00,000/- through banking mode and obtained a printed receipt. However, there is also no dispute that the said political party was one of the entities identified by the Investigation Wing as engaged in circular accommodation transactions. Statements of key functionaries recorded on oath admitted to the refund of donations after retaining commission. On the other hand, there is no direct material brought by the AO to show that the appellant in particular received any refund of the alleged donation, nor was the appellant confronted with specific evidence or given cross- examination of persons whose statements were relied upon. The AO disallowed the deduction entirely on a general presumption arising from search findings in third-party cases. While the wider investigation points to systemic irregularities, disallowance in the hands of each donor requires primary evidence establishing the non-genuineness of that specific transaction. The AO has not shown any bank trail, statement, or confirmation linking the assessee to the alleged refund. Therefore, the disallowance made purely on presumption and general findings cannot be upheld in absence of specific corroboration. Accordingly, the disallowance of Rs.2,00,000/- under Section 80GGC is deleted in appeal.”
At the time of hearing, the assessee himself appeared. The allegation of the Department is that the said political party in which the assessee had made donation was tainted
5 ITO, Korba Vs. Naushad Hassan party providing bogus accommodation entries through donations. However, the A.O had not brought out any evidence which suggests that the said political party has derived commission and has paid money back to the assessee through backdoor. Nothing has been brought on record by the A.O to establish the direct nexus regarding benefit derived by the assessee from the said political party while making the said donation.
In view of the aforesaid facts and circumstances, I do not find any infirmity with the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld.
As per the above terms grounds of appeal
raised by the Revenue are dismissed.
7. In the result, appeal of the Revenue is dismissed.”
6. Respectfully following the aforesaid decision on the same parity of reasoning and as per similar terms, the order of the Ld. CIT(Appeals)/NFAC is hereby upheld and the A.O is directed to delete the addition from the hands of the assessee while giving appeal effect of this order.
As per the aforesaid terms grounds of appeal raised by the Revenue are dismissed.
In the result, appeal of the Revenue is dismissed. Order pronounced in open court on 06th day of February, 2026.
Sd/- (PARTHA SARATHI CHAUDHURY) �या�यक सद�य/JUDICIAL MEMBER रायपुर / Raipur; �दनांक / Dated : 06th February, 2026.