Reassessment notice invalid for undisclosed material; political donation deduction upheld absent corroborative evidence.

Reassessment under section 148A failed because the notice was founded on a mistaken factual premise and the material relied upon for reopening, including third-party statements, was not furnished to the assessee despite request; the absence of disclosed material denied a meaningful opportunity to reply and vitiated the jurisdictional notice and consequent reassessment. On merits, the deduction claim under section 80GGC was upheld because the assessee produced the donation receipt, bank statement, and proof of the recipient political party's registration, while the Revenue produced no direct corroborative evidence that the donation was returned or that the transaction was bogus. The reassessment was quashed and the disallowance was rejected.

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Issues: (i) Whether the reassessment proceedings initiated under section 148, following notice under section 148A(b), were valid in law; (ii) Whether the disallowance of deduction under section 80GGC for the alleged political donation was sustainable on merits.

Issue (i): Whether the reassessment proceedings initiated under section 148, following notice under section 148A(b), were valid in law.

Analysis: The notice under section 148A(b) proceeded on a mistaken factual premise by repeatedly alleging that the assessee had made a donation to an entity different from the one actually involved. The mistake was later admitted in the order under section 148A(d). The material relied upon for the reopening, including third-party statements recorded during search proceedings, was not furnished to the assessee despite a request. A meaningful opportunity under section 148A requires disclosure of the material on which reassessment is proposed. The absence of the relied-upon material and the defective factual foundation vitiated the jurisdictional notice and the consequential reassessment.

Conclusion: The reassessment proceedings were invalid and liable to be quashed.

Issue (ii): Whether the disallowance of deduction under section 80GGC for the alleged political donation was sustainable on merits.

Analysis: The assessee produced the donation receipt, bank statement, and evidence showing that the recipient political party was registered under section 29A of the Representation of the People Act, 1951. The Revenue did not bring direct corroborative evidence to show that the donation amount was returned or that the transaction was bogus. Mere reliance on general investigation inputs, third-party statements, and human probabilities was insufficient to deny the statutory deduction in the absence of tangible material connecting the assessee to any accommodation entry arrangement.

Conclusion: The disallowance under section 80GGC was not sustainable.

Final Conclusion: The reassessment was held to be contrary to the mandatory reopening procedure, and the deduction claim was accepted on merits as well.

Ratio Decidendi: For reassessment under section 148A, the assessee must be supplied the material relied upon so that an effective reply can be filed, and a statutory deduction cannot be denied merely on suspicion or generalized allegations without corroborative evidence.

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