2026 (2) TMI 629

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.... filed which is rejected. The matter is heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the materials available on record. 3. Brief facts in this case are that the assessee had donated Rs. 1,50,000/- to Manbadhikar National Party and Rs. 50,000/- to Apna Desh Party which are registered unrecognized political party (RUPP) and claimed deduction u/s. 80GGC of the Income Tax Act, 1961 (for short 'the Act'). 4. In the present case, neither the A.O nor the Ld. CIT(Appeals)/NFAC has brought on record any direct nexus of the benefit that was received by the assessee, if any, from such bogus donation. The Revenue authorities held that the assessee had donated 20% of his total earning to political party and h....

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.... party was involved in providing accommodation entries of bogus donation, the case of the assessee was reopened u/s. 147/148 of the Act, wherein the A.O had disallowed deduction of Rs. 2 lakhs u/s. 80GGC of the Act. 3. When the matter went before the first appellate authority, the Ld. CIT(Appeals)/NFAC had deleted the addition observing as follows: "It is not in dispute that the appellant made payment of Rs. 2,00,000/- through banking mode and obtained a printed receipt. However, there is also no dispute that the said political party was one of the entities identified by the Investigation Wing as engaged in circular accommodation transactions. Statements of key functionaries recorded on oath admitted to the refund of donat....

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.... the said political party while making the said donation. 5. In view of the aforesaid facts and circumstances, I do not find any infirmity with the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld. 6. As per the above terms grounds of appeal raised by the Revenue are dismissed. 7. In the result, appeal of the Revenue is dismissed." 6. Respectfully following the aforesaid decision, I set-aside the order of the Ld. CIT(Appeals)/NFAC and direct the A.O to delete the addition from the hands of the assessee. 7. As per the aforesaid terms grounds of appeal raised by the assessee are allowed. 8. In the result, appeal of the assessee in ITA No.16/RPR/2026 is allowed. ITA No.17/RPR/2026 (Penalty app....