TaxTMI 
TaxTMI 
2025 (7) TMI 1437
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....th in law and, on facts in upholding the determination of income made by the learned Deputy Commissioner of Income Tax, Central Circle-19, Delhi of the appellant at Rs. 199,15,26,500/- as against declared "Nil" income in an order of assessment dated 6.7.2021 u/s 143(3) of the Act. 2. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding disallowance of Rs. 199,15,26,560/-by denying the exemption u/s 13A of the Act. 2.1 That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, disallowance so made and sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. 2.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that proviso to section 13A of the Act mandates that political parties to file return of income for availing exemption u/s 139 of the Act which includes both returns filed u/s 139(1) and 139(4) of the Act, and since in the instant case the return was filed on 02.02.2019 much before the last....
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....me Tax (Appeals) has also failed to appreciate that computation of income at Rs. 199,15,16,560/- is manifestly unjust and arbitrary since as per audited income and expenditure account as on 31.3.2018 accepted by the authorities below there was excess of income over expenditure of only Rs. 1,71,65,088/- which too ought to have been offset against deficit of Rs. 96,30,18,572/- in the immediately preceding year accepted in the order of assessment u/s 143(3) of the Act. 4. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding the levy of interest of Rs. 3,51,83,040/-u/s 234A of the Act, interest of Rs. 28,14,64,320/- u/s 234B of the Act and interest of Rs. 3,55,81,089/- u/s 234C of the Act and also fees of Rs. 10,000/- u/s 234F of the Act which are not leviable on the facts and circumstances of the case of the appellant. It is therefore, prayed that the denial of exemption u/s 13A of the Act made and sustained by the learned Commissioner of Income Tax (Appeals) along with interest levied may kindly be deleted and appeal of the appellant be allowed. 3. We now advert to the basic relevant facts. The assessee/app....
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....n; its donations as violative of section 13A 1st proviso (d) in his assessment order which stands upheld in the CIT(A)'s detailed lower appellate discussion reading as under: "6. Ground Nos. 2 including 2.1 to 2.8, 3 including 3.1 & 3.2 and 4: 6.1 The relevant part of the assessment order is as under: "10. The above reply of the assessee has been considered in the light of facts of case & provisions of law but found not tenable. 10.1 Section 13A of the Income Tax Act, 1961 which provide for exemption to the income of political parties is subject to certain conditions. These conditions are mentioned in clause (a) to (d) of first proviso to section 13A of the Act. As per these provisions: - Any income of a political party which is chargeable under the head "Income from house property" or "Income from other sources" or "Capital gains" or any income by way of voluntary contributions received by a political party from any person shall not be included in the total income of the previous year of such political party: Provided that- 1. Such political party keeps and maintains such books of account and other documents as would enable the....
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....tween 'voluntary contributions' and 'donation'. The extract of balance sheet of assessee for the year under consideration is as under:- Note No.12 GRANTS DONATIONS AND CONTRIBUTIONS Individual Donors Donation 205.078,647 166,522.229 Donation Congress fund. 688,500 Donation From AICC Members 47,000 2.400 Donation From MIPs 4,876,005 4,554,000 Donation Application Fee - 200,000 Donation (Souvenir) - . Donation From Sympathisers 843,200 312,000 Voluntary fund from PCCIFO - Aid from AICC - . Electoral Bond 50,000,000 Company Donors Donation 9,910,000 162,165,000 Building fund - 1,955,000 Electoral Trust & Foundation 40,000,000 162,254.000 Other Donations 13,065,814 8.300.000 Total 324,509,166 506,264,629 From the above, it is clearly seen that the assessee has recorded the entire receipts as "donations" which strengthen the argument that the assessee has received "donation" of Rs. 32,45,09,156/- including "donation" o....
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....n'ble Delhi High Court in the case of CIT vs. Indian National Congress, ITA No. 145/2001 wherein it has been held that: - "when the contributions received by a political party does not satisfy the requirement of Section 13Aof the Act, such contributions are in terms of Section 2(24) of the Act read with Section 14(F) and Section 56(1) of the Act taxable as 'income from other sources'. The corresponding expenditure incurred by a political party for attaining aims and objects of the party cannot be allowed as a deduction since it is not provided under Section 57of the Act except to the extent that a political party is able to demonstrate that it is able to claim a deduction under Section 57(iii) of the Act." In view of above discussion, it is hereby held that assessee party has violated the provisions of clause (d) of first proviso to section 13A of the Act and therefore is not entitiled to exemption u/s 13A of the Act on contributions and donations received by it 11. Without prejudice to the above discussion, the assessee has also violated the provisions of second proviso to section 13A of the Act by not filing its return of income within the t....
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....provisions of section 139(4B) of the Act. The Provisions of section 139(4B) of the Act reads as under:- "The chief executive officer (whether such chief executive officer is known as Secretary or by any other designation) of every political party shall, if the total income in respect of which the political party is assessable (the total income for this purpose being computed under this Act without giving effect to the provisions of section 13A) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act, shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1)." 11.2 Further, as per provisions of section 139(1) of the Act, Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his incom....
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....s specifically asked to explain the allowability of exemption in its case for the reason that it has filed return of income beyond due date. However, the assessee has not furnished satisfactory explanation and simply asserted that it has filed its return of income within due date as prescribed by section 139(4) of the Act. Thus, the assessee has violated the provisions ofsection13A of the Act by not furnishing the return of income with inundate as prescribed in section 139(4B) of the Act and therefore is not entitled to exemption u/s 13A of the Act. The following case laws are relied upon wherein it has been held that a political party is not entitled to exemption u/s 13A unless it fulfills all the conditions laid therein: - i. In its own case cited as INC vs. Assistant Commissioner of Income Tax (2004) 91 TTJ Del 857, it has been held by the Hon'ble Delhi High Court that - "On consideration of the facts and circumstances of the case, we are also of the view that the assessed did not maintain proper books of accounts regularly in the course of conduct of the activity and receipt of income and incurring of expenditure. It is evident from the facts of the case t....
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....made such contribution; (c) has to have its accounts audited by an Accountant as defined in the Explanation below Section 288 (2) of the Act. In the present case, the AO found large gaps in the monthly accumulations of the donations at the various places and its actual deposit in the bank account of the central office. No regular books of accounts had been maintained except at the central office. The bank account at Chennai showed that a sum of Rs. 6,62,000 was deposited in cash on five/six occasions for which there was no explanation as regards sources. The assertion that each donation was less than Rs. 10,000 was a desperate one and not at all convincing. The documents produced did not support such an assertion. The finding of the ITAT that the Assessee satisfied the mandatory conditions for availing the exemption under Section 13A of the Act is nothing short of perverse as it is wholly contrary to and unsupported by the documents on record. A political party which seeks to avail of the exemption cannot be heard to say that it is not possible for it to maintain its accounts on a consolidated basis. As long as a political party continues to avail the exemption fr....
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....he assessment order and the submissions of the appellant, following observations can be made: i. The appellant has filed the same reply as it had filed before the Id. AO. Even the justification and case laws are also same. The Id. AO has addressed each and every issue raised by the assessee in the assessment order which is a speaking order. iii. The Id. AO has analyzed the legal position as well as factual position in detail. iv. Section 13A and its proviso b and d have to be read in conjunction while deciding the treatment to be given to voluntary contribution and donation. While Section 13A of the Act states that any income by way of voluntary contributions received by a political party from any person, proviso b talks about voluntary contribution and proviso d talks about donations. Thus, both donations (proviso d) and voluntary contributions (proviso b) are subset of voluntary contributions (Section 13A). In view of the above discussion, following scenarios can be tabulated as under: Sl. No. When Voluntary contribution/donation is Condition precedent Relevant proviso 1. Less than Rs. 2000/- No condition. Payment ....
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....ed any new material what it had already submitted before the Id. AO and further considering that all the issues raised by the appellant have already been addressed by the Id. AO, I do not find any reason to interfere with the findings of the Id. AO. Therefore, disallowance of the exemption of Rs. 199,15,26,560/- claimed by assessee u/s 13A of the Act is confirmed and these grounds of appeal are hereby dismissed." This is what leaves the assessee aggrieved. 5. We have afforded several opportunity(ies) to the assessee and the department who have made their respective vehement rival submissions against and in support of learned lower authorities' action disallowing section 13A exemption claim herein. Learned counsel representing assessee in this factual backdrop has filed his written submissions as under: "MAY IT PLEASE YOUR HONOURS: 1 This appeal arises from aft order dated 28.3.2023 of the learned Commissioner of Income Tax (Appeals)-27, New Delhi. 2 That appellant is a recognized "National Political Party" and is registered under section 29A of the Representation of People Act, 1951 and registered with the Election Commission of Indija as National P....
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....he Act (82A-82B) xix) 17.3.2021 Reply filed by assessee before the learned Assessing Officer (83-97) xx) 6.7.2021 Order of assessment u/s 143(3) of the Act which determined the income of the assessee at Rs. 199,15,26,560/-, on the following two basis: i) That assessee has violated the provisions of second proviso to section 13A of the Act by not filing its return of income within the time limit prescribed by section 139(4B) of the Act (page 27 of order of assessment); and ii) That assessee has also violated the provisions of clause (d) of first proviso to section 13A of the Act since assessee has received donation of Rs. 14,49,000/- in cash from various persons, each donation being more than Rs. 2,000/- (page 27 read with page 24 of order of assessment) xxi) 28.03.2023 CIT(A) dismissed the appeal xxii) 24.05.2023 Appeal filed in ITA No. 1609D/2023 3 Ground 1 is general 4 Grounds 2 to 3.1 are regarding upholding disallowance of Rs. 199,15,26,560/- by denying the exemption u/s 13A of the Act. 4.1 It is submitted that the learned Assessing Officer in the order of assessment has made the aforesaid denial of exemption ....
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....bmit a report to the Election Commission of India as mandated under sub-section (3) of section 29C of the Representation of the People Act. 1951 (43 of 1951) furnishing the details of contributions received by apolitical party in excess of Rs. 20,000 from any person. However, under existing provisions of the Act, there is no restriction pf receipt of any amount of donation in cash by a political party. Secondly, a political party is also required to file its return of income under section 139(4B) of the Act, if its income exceeds the maximum amount not chargeable to tax (without considering the exemption under section 13(A). However, filing of the return is not a rendition precedent for availing exemption under the said section. In order to discourage the cash transactions and to bring transparency in the source of funding to political parties, it is (proposed to amend the provisions of section 13 A to provide for additional conditions for availing the benefit of the said Section which are as under: (i) No donations of Rs. 2000/- or more is received otherwise than by an account payee cheque drawn on a bank or an account of payee bank draft or use of electronic clearing sys....
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....xes New Delhi, Dated: 23 April, 2019 To, The Pr. DGIT (Systems), New Delhi. Subject: Clarification with regard to the time Allowed for filing of return of income subsequent to the insertion of Clause (ba) in sub-section 1 of section 12A of the income -tax Act, 1961. Sir, Undersigned is directed to refer to the representation(s) received on above mentioned subject stating that while processing of ITR-7 for the A.Y. 2018- 19, in respect of the belated returns filed u/ s 139(4) of the Income Tax Act, 19611 Act), the following is being communicated u/s 143(l)(a) of the Act:- "As per section 12A(l)(ba) of the Income -tax Act, 1961 the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section (4A) of section 139, within the time allowed under that section. Otherwise, the exemption u/s-11 i.e. Sr. no 4(i) and 4 viii in schedule Part BTI is not allowed." Based on this, exemption u/s 11 of the Act has been denied to otherwise eligible trust, thereby creating huge demand. 2. In the matter, the memorandum explaining the relevant....
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....oviso inserted to section 13A of the Act vide Finance Act, 2017, w.e.f. 1-4-2018 the exemption u/s 13A of the Act is available subject to filling of return u/s 139 of the Act i.e. up to extended time limit available u/s 1|39(4) of the Act. 7 It is further submitted that section 139(4B) of the Act reads as under: "(4B) The chief executive officer (whether such chief executive officer is known as Secretary or by any other designation) of every political party shall, if the total income in respect of which the political party is assessable (the total income for this purpose being computed under this Act without giving effect to the provisions of section 13A) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in 1 the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1)". 7.1 In respect of section 139(4B) of the Act it is noted that section 139(4B) of the Act requires political parties to furnish ....
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....ection 80AC inserted vide Finance Act, 2006 stating that no deduction. Under section 80-IA, 80-IAB, 80-IB and section 80-IC of the Act shall be allowed unless the assessee furnishes the return of income before the due date prescribed under section 139(1). 80-IC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after- (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE; (ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.-Deductions in respect of certain incomes", no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139. However, no such restriction has been specifically spelt in section 13A to deny exemption u/s 13A of the Act in absence of filing return u/s 139(1) of the Act. 7.4 Without prejudice to the above submissions, it is further stated th....
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....es with the proviso requirements before the assessment is made. This Tribunal is bound by such interpretation of the Court. Reference can be made to L. Chandrakumar v. UOI19951SCC 400 (Para 4, 8, 9,10) 7.5 It is further submitted that there are many instances where exemption/deduction are subject to compliance with in due date of return u/s 139(1) of the Act for e.g. option to be exercised u/s Explanation (2) (ii) to section 11(1), deduction u/s 54/54F/54B of the Act. In this regard the courts has observed that on a conjoint reading of sub-section (1) and (4) of section 139, inevitable conclusion is that a return filed within time specified in sub-section (4) has to be considered as having been filed within the time prescribed in sub-section (1) of section 139 for the purpose of allowing such exemption/deduction. In this regard the Bombay High Court in respect of deduction under Explanation (2) (ii) to section 11(1) in Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Trust vs CIT reported in 207 ITR 368 (pages 97-100 of JPB) 7.6 It is further noted that the ratio of Hon'ble Bombay High Court in Trustees of Tulsidas Gopalj; Charitable & Chaleshwar Temple....
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....ount or through electoral bond. It is submitted that appellant has not received any donation between 2,000/- to Rs. 20,000/- otherwise than by an account payee cheque/draft. It is submitted that legislature use the word "donation" not "voluntary contributions which has been used in clause (b)" of section 13A of the Act. It is submitted that appellant received sum of Rs. 11,49,000/- as "voluntary contribution" substantially from elected members (Member of Legislative Assembly ("MLA")/Member of Parliament ("MP")). It is submitted that such sums do not constitute "donation". There is a distinction between "voluntary contribution" and "donation". Moreover, the instant amendment in section 13A(d) of the Act has been made to bring transparency in source of funds to political parties and, address the concern of anonymity of the donor which aspect is absent on the facts of the appellant. All the donors are duly identifiable persons having PAN Nos and complete particulars including their addresses are available and tabulated in para 9.3 of this submission. 9.2 The memorandum explaining the Finance Bill" 2017 viz-a-viz the above amendment reported in 391 ITR 185 (St.) (pages 1-3 of ....
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....lete address of the contributing person/company PAN (if any) & Income Tax Ward/Circle Amount contribution (Rs.) i) 155 Shri K.C. Venugupal, 34, Lodhi Estate, New Delhi AJRPV0671N 1,08,000 ii) 298 Sint. Ajanta Neog, Baruagaon, Golaghat, Assam AAYPN5643F 60,000 iii) 299 Dr. Motiur Rohman Mondal, Vill. Mahmaya Nagar, PO Fulerchar, P.S. South Salmara (Assam) AYTPM9401G 60,000 iv) 321 Shri Janak Ram Verma, MLA Vill. Mudhipar, PO Maldi, Dist. Baludabazar AJHPV2801N 50,000 v) 325 Shri Parash Nath Rajwade, MLA At, PO Batra, Distt. Surajpur AZPPR1803A 30,000 vi) 328 Shri Bhaiya Lal Sinha MLA, Bazar Chowx, garur Distt. Balod AJEPS8790 50,000 vii) 329 Shri Mohan Markam, MLA, Bhelwapadar, Main Road, Kondagoan AIBPM4508Q 50,000 viii) 330 Shri Amarjeet Bhagat, MLA, Shiv Shakti Bhawan, Kainabaoha, Ambikapur ALFPB406D 1,30,000 ; ix) 331 Shri Manoj Mandavi MLA Vill Pelgara PO Lakhanpuri, Distt. Kanker ANFPN2695B 50,000 x) 336 Shri Daip Lahariya MLA, Vill, Dhanganwa, PO Okhar, Distt. Bilapur AFBPL9623G 50,000 xi) 337 Smt. Tej Kanwar Nela....
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....ary contribution and donation both need to be given their respective meanings. Voluntary contribution cannot be used interchangeably with the word donation. ; 10.1 The word contribution has not been defined in the Act, thus one would have to turn to the common sense meaning of the word contribution. Ramanathan Aiyer's Law Lexicon IIIrd Ed. defines the popular meaning of Contribution as "In a popular sense it is an act of giving to J common stock, or in common with others, that which given to common stock or purpose". Thus, from this it is clear that the word contribution is usually used in the context of members of a club, society, or political party who associate together i for a common purpose. For. example, subscription. Fees paid for membership would be a contribution in return for. It is not gratuitous, it results in a certain return. 10.2 A voluntary contribution on the other hand would be gratuitous where no return is expected. Reference to be made to Savoy Oversees v. Art Union of London (1896) AC 296. In the instant case, the contributions which have been listed out are not part of any subscription drive but have been voluntarily. In the instant ....
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....15,26,560 ii) Expenditure (II) 197,43,61,472 iii) Balance being excess of Income over expenditure transferred to General Fund (III=I-II) 1,71,65,088 iv) Balance being excess of Expenditure over receipt Transferred to General Fund in financial year 2017-1 8 relevant to assessment year 2018-19 (96,30,18,572) Net Deficit (94,58,53,484) 11.2 It is submitted that assuming for sake of an argument that voluntary contributions are chargeable to tax u/s 13A of the Act then too the entire receipts by way of voluntary contribution is not taxable. 11.3 It is submitted that section 13A of the Act provides that any income by way of voluntary contribution receipts by political party is not includible in income of political party. 11.4 It is thus submitted that any income by way of voluntary contribution connotes "surplus" arising after reducing the expenditure from the receipts by way of voluntary contribution. 11.5 It is submitted that voluntary contributions postulate that there is there is an "inbuilt legal obligation" on the contributory to the contributor, who makes voluntary contributions and if so, the situation....
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....r which contributions were made as voluntary contributions by the contributors, then such a sum could have been treated to be income liable for assessment and in case there was no such excess of receipt over the expenditure, said sum could not be regarded as an income but merely represented merely a receipt, which in terms of section 13A of the Act cannot be regarded as an income liable to be taxed as such. 11.10 The appellant in support seeks to place reliance on the following judgments: i) 362 ITR 225 (Del) DDIT (E) vs. Petroleum Sports Promotion Board (pages 23-26 of JPB) "The objection of the learned standing counsel for the revenue that since the grants 4ere assessed under the residual head, there was no scope for allowing the expenditure incurred on the promotion of the sports activities is not acceptable since even under Section 57(iii), any expenditure incurred for the purpose of making or earning the income is allowable as a deduction. It is open to the income-tax authorities to deny the exemption under Section 11 of the Act in the absence of registration under Section 12A and if they do so, then the assessment has to be completed in accordance w....
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....es from a profit motive. In a political party, as in any charitable institution, there is no private profit motive nor a possibility of distribution of income among the members. (ii) Having kept such income of political parties, out of the total income, under section 13A of the Act, the same income cannot be brought to tax or penalty under some different provisions, nor a political party can be put to restrictions other than those mentioned in the exemption clause, i.e., section 13 A of the Act. 3. Thus, the Board are of the view that the income of the political parties are governed by the special provisions i.e. section 13A of the Income-tax Act, 1961, and accordingly the provisions of Chapter IVD which are applicable for profits and gains of business or profession cannot be applied in the cases of political parties. Income of political parties from voluntary contribution cannot be said to be income from profession so as to attract section 44AB or 27 IB of the Income-tax Act. 4. However, the political parties will have to fulfil the requirement of maintaining the accounts and getting them audited by an accountant, as provided m section 13A of the Act to ....
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....ass on the benefits of duty free import to 1he assessee even without any imports having been made; and the probability or improbability of realization of the benefits by the assessee considered from a realistic and practical point of view (the assessee may not have made imports), it is quite clear that in fact no real income but only hypothetical income had accrued to the assessee and section 28(iv) of the Act would be inapplicable to the facts and circumstances of the case. Essentially, the Assessing Officer is required to be pragmatic and not pedantic." 12. It is further submitted that excess expenditure of Rs. 96,30,18,572/- incurred by appellant in earl; er assessment year is also allowable to be set off against income of year under consideration: 12.1 Reliance is placed on following judicial pronouncements: i) 53 taxmann.com 463 (Del) DIT(E) vs. Indraprastha Cancer Society ii) 415 ITR 361 (Karnataka) PCIT(Exemptions) vs Manipal Academy of Higher Education iii) ITA No. 3033/D/2015 dated 13.12.2018 M/s KSD Charitable Trust vs. ACIT (extracted at page 276 of Paper Book) iv) 42 ITR (T) 58) (Bangalore-Trib.) ACIT vs. City Hospital Charit....
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.... account payee bank draft or use of electronic clearing system through a bank account or through electoral bonds. Without prejudice even, even otherwise no disallowance is tenable since there is no excess of expenditure over receipts. considering the deficit of Rs. 96,30,18,572/- in the preceding year. In any case and at-best disallowance be restricted to Rs. 11,49,000/- which too is not tenable since voluntary contribution received by political party cannot be taxed as "income" under the Act. 15 Before concluding it is submitted that during the course of assessment proceedings, the appellant had filed following replies and submitted as under: i) Reply dated 2.10.2020 (page 70 of Paper Book) ii) Reply dated 3.2.2021 (pages 75-76 of Paper Book) iii) Reply dated 17.3.2021 (pages 83-97 of Paper Book) 16 In view of the aforesaid submission that appellant is eligible for claim of exemption of Rs. 199,15,26,560/- u/s 13A of the Act 17 Ground 4 is regarding levy of interest of Rs. 3,51,83,040/- u/s 234A of the Act, interest of Rs. 28,14,EUR4,320/- u/s 234B of the Act and interest of Rs. 3,55,81,089/- u/s 234C of the Act and also fees o....
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....or achieving its objects are not allowable as deduction. 4. Aggrieved by the assessment order u/s 143(3) dated 06.07.2021, the assessee approached the CIT(A) who by way of the impugned Order dated 28.03.2023 upheld the findings of the AO in the assessment order and dismissed the appeal of the assessee. 5. Aggrieved by the Order of the CIT(A) dated 28.03.2023, the assessee approached this Hon'ble Tribunal ty way of the present Appeal. 6. The Respondent/Revenue has already filed detailed submissions vide its Status Report/Written Submissions dated 21.02.2024. The present synopsis maybe read in addition to the same. Assessee has failed to fulfil the requirement of the third proviso to Section 13A of the Act 7. As stated above, the due date for filing of Income Tax Return u/s 139 of the Act for AY 2018-19 was 30.09.2018. This date was extended to 31.12.2018. The assessee filed its Return for AY 2018-19 on 02.02.2019 i.e., after the "due date". Hence, failed to fulfill the requirement of the third proviso to Section 13A of the Act and is therefore not entitled to the benefit of the exemption u/s 13A of the Act. 8. Section 13A of the ....
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..... 217 of 2nd Compilation of Revenue)). 15. Reliance is placed on the Judgment of the Hon'ble Supreme Court in PCIT v. Wipro Limited (2022 SCC Online SC 831) (at Pg. 1 of 3rd Compilation of Revenue) which arose in the context of Section 10B(8) of the Act. In the case the Hon'ble Supreme Court was pleas ed to hold as follows:- "15. On a plain reading of Section 10-B(8) of the IT Act as it is i.e. "where the assessee, before the due date for furnishing the return of income under sub-section (1) of Section 139, furnishes to the cssessing officer a declaration in writing that the provisions of Section IO-B may not be made applicable to him, the provisions of Section 10-B shall not apply to him for any of the relevant assessment years ", we note that the wording of Section 10-B(8) is very clear and unambiguous. 16. For claiming the benefit under Section 10-B(8), the twin conditions of furnishing the declaration to the assessing officer in writing and that the same must be furnished before the due date of filing the return of income under sub-section (1) of Section 139 of the IT Act are required to be fulfilled and/or satisfied. In our view, both the conditions ....
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....ompilation of Revenue)). 23. The expression "due date" used in the last proviso to Section 13 A would be rendered otiose if the interpretation sought for by the assessee is accepted. 24. Section 13 Auses the word "due date". There is an intelligible differentia adopted by the Legislature between the words used for the terminal points u/s 12A(ba) and 13 A. The terminal point for filing return is consciously expressed differently by the legislature for charitable organizations and political parties. 25. Charitable organization and political parties cannot be compared as the provisions and dispensation applicable to both are different. 26. The Assessee relies on Circular bearing F. No. 173/193/2019-ITA-I dated 23.04.2019, to seek parity with charitable organizations. Firstly, the relief of parity sought by a political f arty with a charitable organization is akin to seeking a Writ of Mandamus which cannot be issued by a Tribunal. The assessee has not invoked Article 226 to seek any such mandamus. Further, the statutory provisions have not been challenged by the assessee under Article 14 of the Constitution claiming any discrimination. 27. W....
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.... Donation 205,078,647 166,522,229 Donation Congress fund. 688,500 - Donation From AICC Members 47,000 2,400 Donation From MPs 4,876,005 4,554,000 Donation Application Fee - 200,000 Donation (Souvenir) - - Donation From Sympathisers 843,200 312,000 Voluntary fund from PCC/FO - - Ald from AICC - - Electoral Bond 50,000,000 - Company Donors - Donation 9,910,000 162,165,000 Budding fund - 1,955,000 Electoral Trust & Foundation : 40,000,000 162,254,000 Other Donations 13,065,814 8,300,000 Total 324,509,166 506,264,629 34. It would also be gainful to refer to Para 10.3 of the assessment order which extracts a Letter dated 28.09.2018 issued to the ECI by the assessee (at Pgs. 78-79 of Written Submission/lst Compilation of Revenue). This letter has statutory flavour as it is a Report submitted u/s 29C of the Representation of People Act, 1951. The said letter makes no distinction between 'voluntary contribution' and 'donation'. Further, it admits to the amounts received in cash. 35. The aforesaid letter of the assessee to t....
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....ary contribution. Claim for deduction of expenses from voluntary contribution received in cash is unsustainable in law 43. Expenses incurred by the assessee for achieving its objects are not allowable as deduction. 44. Reliance is placed on the judgment in the assessee's own case for prior AY i.e., 1994- 95 reported at Commissioner of Income Tax vs. Indian National Congress fat Pg. 225 of the 1st Compilation of Revenue). Though the said judgment has been assailed before the Hon'ble Supreme Court, there is no stay as on date. 45. There are two paras from the said Judgment relevant to this issue of whether a political party non-compliant with 13A can claim deductions. These are Paras 123 and 124 which read as follows (at Pg. 261 of Written Submission/lst Compilation of Revenue):- "123. Here it is important to address another submission made on behalf of the Revenue which finds favour with the court. Under the head "Income from other sources", no expenditure can be allowed as a deduction on the ground that the expenditure has been incurred by a political party for attaining the aims and objects of political party. As rightly pointed out, th....
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....by the Income Tax Authorities in upholding a tax demand for Rs. 105.17 crores for AY 2018-19, after disallowing the expenses of Rs. 197.43 crores legitimately incurred by the appellants in that year. *** 14. The net effect of this absurd interpretation of the Income Tax Act, which is based on the impugned finding, is that the appellant, even though it had a surplus of income over expenses of only Rs. 1.71 crores, has been saddled with a tax demand of Rs. 135.06 crores. This is the direct and inevitable effect of the impugned finding on the appellant in income tax proceedings for subsequent years, while the impugned judgment is under a cloud in these appeals. It is submitted that without a final adjudication on the correctness and validity of the impugned judgment, the appellant is suffering grave and irreversible consequences, which has necessitated the filing of the present application." 48. Section 57(iii) of the Act on the basis of which deduction on expenses is sought to be claimed by the assessee, uses the words "wholly and exclusively". Even the factual basis for making a claim u/s 57(iii) has not been made out by the assessee. In its return of inco....
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....t they have spent it to meet objects of the political party. They never set up a case under Section 57(iii). 56. The Assessee relies on the Judgment of CIT u Fr. Mullers Charitable Institutions (2014) 363 ITR 230 (Pg. 79 of Assessee's Paper Book-2). This is a Karnataka Hight Judgment. In this, the question before the Hon'ble High Court may be seen at Para 4 SI. (ii) i.e., whether :n a case of violation of Section 13(l)(d), maximum marginal rate of tax is to be levied on income only to the said extent. The said case clearly arose in the context of a violation of Section 13( l)(d) of the Act and not 13A. What we are concerned with is denial in toto for the relevant AY because the breach of conditions u/s 13 A leads to denial of the entire exemption. In the present case which deals with Section 13 A, there is no carve out possible as was possible in Fr. Muller (supra) as the violation was with respect to a portion of the income. 57. It maybe pertinent to 'efer to Instruction No. 1988 at Pg. 31 of 1st Paperbook of the assessee. This is vital because, today the assessee seeks parity with a private entity under the IT Act. Such an approach is impermissible since the....
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.... explanation 2 prescribes the "due" date for various categories of persons; all upto 31st October of the concerned assessment year, as the last day only. It is in this factual backdrop that the assessee's endeavour before us is to invoke section 139(4) of the Act that the same enables a non-filer who had missed the above "due" date under section 139(1) of the Act to furnish it's return very well past 31st October "before the end of the relevant assessment year or before completion of the assessment; whichever is earlier. The assessee accordingly states that the above return dated 02.02.2019 has been filed very well before either of the twin situations i.e. end of the relevant assessment year or completion of the assessment, as the case may be. 9. All these assessee's vehement submissions fail to evoke our concurrence. This is for the precise reason that so far as an interpretation of such an exemption provision in a fiscal statute is concerned, not only the hon'ble jurisdiction high court's decision dated 23rd March, 2016 in the assessee's case itself for assessment year 1994-95 in para 95 has made it clear that section 13A has to be strictly complied with but also hon'ble apex ....
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....t." 12. We thus conclude that given the fact that the assessee has been held to have violated section 13A 3rd proviso in not filing its return within the prescribed "due" date, its impugned netting claim also deserves to be declined in very terms. Ordered accordingly. 13. We further make it clear before parting that both parties' respective detailed synopsis have been duly considered but not discussed in the order being repetitive in nature. 14. This assessee's appeal is dismissed. Order pronounced in the open court on 21st July, 2025__ ============= Document 1 011-23017859 Phone 011-2301713/ 011 23010000 Extr 437 ALL INDIA CONGRESS COMMITTEE Website www nice oth in AHMED PATEL, MP TREASURER 24, AKBAR ROAD NEW DELHI 116 0 ;: 28'" September, 2018. 10. THE SECRETARY. Election Commission of India, Nirvachan Sadan, Ashoka Road, New Delhi, 2 8 i Dear Sir. Sub: Report of Contribution / Donation received in excess of Rx.20,000/- by the Party during the Financial Year 2017-2018, under sub section (1) of section 29C of the Representation of People Act. 1951. Please find enclosed herewith Report of Contribution / Donation received....