TaxTMI 
TaxTMI 
2025 (11) TMI 1003
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..... 80GGC of the Act given to Political Parties. The assessment was reopened since the assessee has given donation of Rs. 1,50,000/- to Rashtriya Samajwadi Party (Secular) which is the registered unrecognized political party and claiming bogus deduction u/s. 80GGC of the Act. 2.1. In response, the assessee filed Return of Income on 22-05- 2023 claiming the same original return including donation of Rs. 1,50,000/- u/s. 80GGC of the Act. The assessee was issued a show cause notice, in reply the assessee filed a donation receipt given by Rashtriya Samajwadi Party (Secular), copy of the relevant bank statement and Certificate of Registration of Rashtriya Samajwadi Party (Secular). The assessing officer considered the same and held that Post Search enquiries on registered unrecognized political parties group of Ahmedabad (23 registered unrecognized political parties), it was established that the donation made to such Registered Unrecognized Political Parties (RUPP) in the nature of scam claiming bogus deduction u/s. 80GGC/80GGB of the Act and intended to defraud the legitimate tax of the assessee. The amounts were returned to the donor after deducting certain percentage from it. As it ....
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....ment 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 political party and claimed deduction under section 80GGC, since Assessing Officer found that bank accounts of above political party had been used by accommodation entry provider where donation received by cheques were layered though various bank accounts and ultimately cash was returned back, donation claimed under section 80GGC was merely accommodation entry and thus, disallowance of deduction under section 80GGC was proper. The sequence of events in the above case are "The assessee paid donation of Rs 52,00,000/- to Rashtriya Samajwadi Party (Secular) To verify the genuineness and utilization purpose of the donation, a notice u/s 133(6)....
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....ning 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 systematic pattern of transferring the funds credited by RSP clearly establishes the modus operandi of the account opening i.e. to route or transfer the funds of RSP back to the donator. Thus the assessee gave Rs. 52,00,000/- to RSP in the form of donation which was transferred to accounts of Shri Mukesh Mehta who claimed to be a businessman. Again the said amount was transferred to Sapan Traders and Waheguru Enterprise. Thus the donation claimed to be paid by the assessee is found to be bogus and the same is disallowed u/s. 80GGC of the Act and added back to the total income of the assessee and also initiated penalty proceedings....
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....es, 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 other criteria was followed for making these donations. The Ld AO made a detailed enquiry of RSP and its Bank accounts and transfer of funds to one Shri Mukesh Mehta proprietor of two firms and he transferred it to Waheguru Enterprise and Sapan Traders, which is clearly a systematic financial maneuver to legitimate illicit moneys and evade taxes. It is appropriate to follow the Hon'ble Supreme Court judgment, wherein SLP filed by the assessee is dismissed confirming the Tribunal's decision to come to the conclusion that the entire loan transaction was not genuine, in the case of Pavankumar M. Sanghvi v....