TaxTMI 
TaxTMI 
2025 (5) TMI 1391
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....80G and 80GGC of the Act. To verify the genuineness of the donations made by the political parties namely Kisan Party of India and Rashtriya Samajwadi Party (S) notices u/s. 133(6) were issued to confirm the receipt of donations along with the relevant details on the official email of these political parties. The same were bounced. Therefore a show cause notice was issued to the assessee to justify the claim of deduction u/s. 80GGC of the Act. 3. The assessee failed to make any response to the show cause notice. Further verification made by the A.O. observed as follows: "4. Meantime, from the Article on a news portal it is gathered that 3 parties raising over Rs. 1000 crore in poll donations under lens. Three little known political parties that allegedly managed to mobilise over Rs. 1000 crore in election donations are now said to be in the dock for serious financial fraud, including round tripping the money back to the donors after claiming income tax exemptions Gujarat based Manav Adhikar National Party Apna Desh Party from Uttar Pradesh and Kisan Party of India from Bihar are currently said to be under scanner of the revenue department and the case of these three parties has ....
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....k the tax department and to evade tax liability in the guise of Sec. 80GGC. The assessee made an attempt to exploit the deduction made available to genuine assessee's. In the given circumstances, onus lies on the assessee to support its claim with corroborative evidences. However, the assessee failed in famishing the documentary evidences called for verification, thereby the genuineness of donation made to political party was not proved by the assessee beyond doubt." 3.1. Thus the Assessing Officer made the disallowance of Rs. 1,13,51,000/- claim as deduction u/s. 80GGC of the Act and demanded tax thereon. 4. Aggrieved against the assessment order, assessee filed an appeal before Ld. CIT(A). After considering the Tribunal's decision, confirmed the disallowance made by the Assessing Officer by observing as follows: "While adjudicating the instant case by the undersigned, the eye-opening facts came in notice in the case of Pavan Anil Bakeri vs. Deputy Commissioner of Income-tax adjudicated by the Hon'ble ITAT, Ahmedabad Bench which changed the course of the case to a whole new direction In the above case the Hon'ble ITAT held that where assessee made donation to a p....
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....r submitted his report that RSP office situated on 2nd Floor of 3 storey building which is a small shop and shutter of which was half closed on that day. Nearby peoples were inquired that RSP Office which is found to be closed in most of the times. Copy of the said RSP Office photographs is reproduced in the assessment order. Further perusal of the records of RSP it is observed that during the assessment year 2016-17, RSP has received only donation amounting to Rs. 14,73,309/- whereas as per the bank account statement of the RSP in Oriental Bank of Commerce, total amount credited is Rs. 38,15,03,885/- That apart from RSP is maintaining two other bank account one at Bank of India and another of Central Bank of India. Further enquiry of Mis. Sterlite Inc and Shah and Co both the accounts were closed on 30-3-2016. An enquiry by the Bank both the proprietorship firms, where there is no stocks found, and the office premises were being occupied by another person. 2.3 On further verification the donation amount of Rs. 52,00,000/- paid by the assessee to RSP was transferred to Waheguru Enterprise and Sapan Traders on 7-10-2015 of Rs. 25,00 000/- and Rs. 27,00,000/- respectively. This sys....
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....e of a genuine business its legal ownership by persons in existence, statutory documentation as necessary for a legitimate business and a documentation trail as a legitimate transaction would normally follow. The only thing which sets its apart from a genuine business entity is lack of genuineness in its actual operations. The operations camed out by these entities, are only to facilitate financial manoeuvring for the benefit of its clients, or with that predominant underlying objective, to give the colour of genuineness to these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the financial world, as many other evils. Even a layman, much less a Member of this specialized Tribunal, cannot be oblivious of these ground realities." In the aforesaid case, the Hon'ble ITAT bench held "As regarding ground no. 2, donation of Rs. 52,00,000/- made u/s. 80GGC, the ground is general in nature. The assessee has not produced any additional evidence in support of its claim. In fact the assessee had stated that it had cordial relationship with Mr. Kamlendu Tripathi Secretary of RSP and no othe....