TaxTMI 
TaxTMI 
2025 (12) TMI 1349
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....AY Ld. FAA who passed the appellate order Appeal No. & Date of order of the Ld. FAA AO who passed the assessment order & Date of order 2982/D/25 2015-16 along with S. A. No. 350/Del/2025 CIT(A)-30, Delhi ITBA/APL/S/91/2024- 25/1074271665(1)10.03.20 25 DCIT, CC-31, New Delhi, dated 27.03.2024 2983/D/25 CIT(A)-30, Delhi ITBA/APL/S/91/2024- DCIT, CC-31, New 2016-17 along with S.A. No. 351/Del/2025 25/1074271864(1)10.03.20 25 Delhi, dated 27.03.2024 2984/D/25 2017-18 along with S.A. No. 352/Del/2025 CIT(A)-30, Delhi ITBA/APL/S/91/2024- 25/1074271864(1)10.03.20 25 DCIT, CC-31, New Delhi, dated 27.03.2024 2985/D/25 2022-23 along with S.A. No. 357/Del/2025 CIT(A)-30, Delhi ITBA/AРPL/S/91/2024- 25/1074364686(1)11.03.20 25 DCIT, CC-31, New Delhi, dated 30.03.2024 2966/D/25 2021-22 along with S.A. No. 356/Del/2025 CIT(A)-30, Delhi ITBA/APL/S/91/2024- 25/1074715463(1)19.03.20 25 DCIT, CC-31, New Delhi, dated 27.03.2024 2761/D/25 2018-19 along with S.A. No. 353/Del/2025 CIT(A)-30, Delhi ITBA/APL/M/250/202425/1073855511(1)28.02.20 25 DCIT, CC-31, New Delhi, dated 27.03.2024 2812/D/25 201....
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....(subsequently rectified). 3. As with regard to the addition of Rs. 19,15,269/- under Section 68 (Unexplained Cash Credits): The appellant contended before the ld. CIT(A) that the credits of Rs. 19,15,269/- in its bank account (PNB A/C No. 7789002100000321) represent legitimate donations reported to the Election Commission in a "contribution report," qualifying for exemption under Section 13A. It was argued that Section 68 of the Act does not apply to such donations and that the AO erred in treating these credits as unexplained income despite the submission of donor details. 3.1 Ld. CIT(A) called for remand report from the AO and a rejoinder of same was filed by the assessee and based on both the ld. CIT(A) concluded as follows; "It is trite law that Under Section 68, any sum credited in the assessee's books of account must be satisfactorily explained as to its nature and source. The onus lies squarely on the appellant to provide verifiable evidence, including donor identities, their capacity to donate, and the genuineness of the transactions. The appellant's reliance on a "contribution report" submitted to the Election Commission is inadequate. The AO's o....
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.... P. Mohanakala (2007), the Supreme Court held that vague or unsubstantiated explanations do not suffice under Section 68. In SumatiDayal vs. CIT (1995), the Apex Court ruled that claims must be backed by concrete evidence to rebut the presumption of unexplained income. The appellant's assertion that the credits are exempt donations under Section 13A is untenable. The "contribution report" lacks evidentiary value, and the absence of donor details, coupled with discrepancies in the seized records, justifies the AO's invocation of Section 68. The appellant's non-compliance with Section 13A further precludes any exemption. The addition of Rs. 19,15,269/- as unexplained cash credits is fully warranted, and these grounds are dismissed." 4. Assessee is in appeal and for convenience the grounds for A.Y. 2015- 16 are reproduced below; "(a) Because the Ld. CIT (Appeals) has failed to appreciate that the Assessing Officer (AO)/Deputy Commissioner of Income Tax (DCIT) has acted against the principles of natural justice, as he has passed the assessment order without affording proper opportunity to the Assessee. As such, the assessment order as well as the impugned order ....
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.... 4.5.1 The table below mentions the date of filing of original ITR u/s 139(4B), audited books & contribution report (before ECI) and status of 'Keeping and maintaining such books of account and other documents as would enable the Assessing Officer to properly deduce its income' by PPP over the years: A.Y. Original ITR filed u/s 139(RB) on Contribution Report Audit report filed on Keeping and maintaining such books of account and other documents as would enable the Assessing Officer to properly deduce its income (Yes/No) Date of filing Due date Date of filing Due date Date of filing Due date Yes/No 2015- 16 Not filed 30.09.2025 04.12.2019 31.10.2015 Not filed 31.10.2015 No 2016- 17 Not filed 17.10.2016 29.10.2019 17.10.2016 Not filed 17.10.2016 No 2017- 18 Not filed 07.11.2017 04.12.2019 07.11.2017 Not filed 07.11.2017 No 2018- 19 31.10.2018 31.10.2018 11.11.2018 31.10.2018 20.09.2018 31.10.2018 No 2019- 20 24.08.2019 31.10.2019 Not filed 31.10.2019 19.08.2019 31.10.2019 No 2020- 21 15.01.2021 31....
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....sp; 11,56,000 11,56,000 3222002100003000 12,300 20,000 32,300 45190200000333 11,00,000 84,36,000 95,36,000 4623002100002790 10,001 10,001 550002100242683 50,000 45,30,071 27.00,000 72,80,071 6847790525 4,06,051 2,07,543 1,42,02,500 18,51,000 1,66,67,094 7166630104 87,77,020 1,50,000 89,27,020 201003066752 500 26,54,000 37,07,100 63,61,600 7789000100006090 99,043 8,74,629 9,16,668, 12,52,749 73,850 10,9,105 7,40,441 21,44,229 17,83,689 89,84,403 7789002100000321 18,16,227 1,01,65,610 63,76,246 1,08,87,774 1,11,74,1345 1,32,23,914 3,73,63,317 5,88,15,972 5,88,57,051 20,8....
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....on or corroborated by any political activity and in fact when Shri Lokesh Kumar Srivastava was asked to furnish the details of expenditure incurred and the list of vendors along with details of expenses like printed material, electronic media/advertisement and hoarding etc. Shri Lokesh Kumar Shrivastava categorically admitted that these details have not been maintained by them and no invoices are maintained for such transactions. 8.2 Thus apart from above fact of non-compliance of mandate of law to avail benefit of exempt income provisions we are of the considered view that when the donors are established to be bogus and donations are accepted merely to help the donors gain deductions u/s 80GGB/80GGC of the Act to reduce the taxable income of the entity/individual that in itself is sufficient to deny the political party benefit of Section 13A of the Act. 9. Hon'ble Delhi High Court in the case of Commissioner Of Income Tax Delhi-Xi vs Indian National Congress (I) and others decided on 23 March, 2016 vide ITA 145/2001in para 77 has very categorically held that satisfaction of Section 13A conditions are necessary and mandatory and in case of failure income of political party by....
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....se F of Section 14 is a residuary provision. If an income which is not to be excluded from the total income and is not chargeable to income tax under heads A to E, then it has to be treated as 'income from other sources'. Section 14 of the Act no doubt opens with the words "save as otherwise provided by this Act" and that would include both Section 13A as well as Section 56 of the Act. However Section 13A of the Act does not open with a non-obstante clause. In other words, Section 13A of the Act is not exclusive of Section 14 F or Section 56(1) of the Act. This clinches the issue. In other words, if the total income by way of voluntary contributions of a political party cannot be excluded from its total income because such political party has not complied with any of the conditions in the proviso to Section 13A of the Act, then by virtue of Section 56(1) of the Act, such income by way of voluntary contribution would be 'income from other sources' under Section 56(1) of the Act. 81. It is true that income by way of voluntary contribution of a political party is not deemed to be income under Section 2(24)(iia) of the Act. However that does not place it outsid....
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....multiple reasons for donations. 85. The known tests for determining what could be said to be 'income' for the purposes of the Act are, therefore, inadequate for determining whether the voluntary contribution to a political party is 'income' in its hands. It definitely forms the corpus from which expenses are incurred by the political party. It is a regular source of income. It may or may not be a windfall depending on the size of the donation. Voluntary contributions are not capital receipt 86. In this context, the Court is unable to accept the contention that these kinds of voluntary contributions are 'capital receipts' as contended by Mr. Aggarwal. Although it is true that all receipts are not income, clause F of Section 14 read with Section 56(1) of the Act, provides an affirmative answer to the question whether income by way of voluntary contributions is 'income from other sources' in a situation where the proviso to Section 13A(1) of the Act is not fulfilled by a political party. 87. The decision in Commissioner of Expenditure Tax v. P.V.G. Raju (supra) is distinguishable on facts. In that case, the context was that th....
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....ar. It was felt necessary to make them account for the receipts and expenses in any financial year. After all, political parties do deal with monies contributed by the public. Political parties are purportedly incurring expenses for their political activities. It is with a view to placing a check on the financial transactions of political parties that the proviso to Section 13A was enacted. In this context, the object of Section 13 A of the Act will be defeated if the compliance with the requirements of the proviso thereto are held not to be mandatory. 94. Section 13A has to be read as a whole. It is a provision beneficial to a political party. It exempts various items of income of a political party from tax. If it has to be strictly construed, so too should the conditionality attached to Section 13A. If a political party seeks exemption from paying income tax in a particular AY, it is incumbent on such political party to strictly comply with each of the requirements in the proviso to Section 13A and to do so by the time the assessment is completed. At the highest, there can be a leeway between the time of filing of the return and the completion of the assessment but certa....