2026 (4) TMI 1786

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....e Grounds of Appeal, as the occasion may demand OR circumstances may require. 5. The unjustified disallowance made to the income of the Appellant may please be deleted in the interest of justice and equity OR in the alternative the assessment please be restored back to the file of the Ld. AO for judicious determination of income." 2. None appeared on behalf of the assessee nor was any adjournment application filed. Considering the matter under consideration, it was decided that no useful purpose would be served in adjourning the matter any further and to decide the matter based on material available on record. 3. We have heard the Ld. DR and perused the material available on record. The facts of the case are that the assessee filed his return of income u/s. 139 of the Income Tax Act, 1961, declaring total income of Rs. 9,52,310/-, wherein he has claimed the deduction u/s. 80GGC amounting to Rs. 9,90,000/- in respect of donations made to Rashtriya Samajwadi Party (Secular). Subsequently, basis investigation carried out by the Investigation Wing, information was received from the departmental insight portal in respect of the assessee that he has paid donation to Rashtr....

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....ted and the amount of Rs. 9,90,000/- was added on account of bogus donation claimed u/s. 80GGC of the Act vide order passed u/s 147 r.w.s 144B of the Income Tax Act dated 07-02-2025. 5. The assessee thereafter carried the matter in appeal before the Ld. CIT(A) who has examined the findings of the AO as well as the modus-operandi involved and thereafter, relying on the Coordinate bench decision in the case of Milind Pankajbhai Shroff Vs. The Pr. CIT-1, Rajkot (in ITA No. 93/RJT/2023 dated 20-05-2024) has held that the donations received from Samajwadi Party (Secular) is bogus and therefore the claim of deduction by the assessee was bogus and the action of the AO was upheld and the findings of the Ld. CIT(A) reads as under: "A search and seizure action u/s 132 of the Act was conducted in the case of RUPPs Group of Ahmedabad on 07.09.2022. A total of 23 Registered Unrecognized Political Parties, more than 35 bogus intermediary entities and 3 major exit providers were covered which were called as RUPP Group of Ahmedabad. The search was conducted after credible evidence of a scam going on in the form of donations to political parties for claiming bonus deduction u/s 80GGC/80....

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....4 wherein it has been stated: "22. Now, we shall also adjudicate the other arguments advanced by Id. DR for the revenue to the effect that "fraud vitiates everything". In this connection, at the cost of repetition, we reiterate the findings of Id PCIT, which are as follows: (i) Rashtriya Samajwadi Party (Secular) is a Registered Unrecognized Political Party and it is one of the 23 RUPPs covered in the RUPPs Group of Ahmedabad. This party was established on 21.10.2008 and its registered address as per its website is Samruddhi Complex, Opp- Sakar-3, Income Tax Circle, Ahmedabad. However, during pre-search enquiry, no party office is found at the aforesaid address. (ii) The modus-operandi of this political party is that the donation is received through cheque in the bank account of the party and then routed through intermediary(ies) (which is generally shell entity(ies) controlled by either the persons running the party or by any other person) in the garb of various purchases or other payments, which are found to be bogus in nature. It is pertinent to mention here that the political party doesn't pay any tax since it is exempt u/s 13A of the Act. ....

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....under section 13A of the I.T. Act but it has also been, mentioning in its Income Tax Return of F.Y. 2018-19 that no contribution report has been filed u/s 29C of the R.P. Act, 1951. (ix) Rashtriya Samajwadi Party (Secular) is not registered, as of today, as informed by Id Counsel for the assessee, with Election Commission of India/R.P. Act, 1951. (x) There is no retraction of statements given by Smt. Sandhay Singh, Shri Bishwajeet Singh and Shri Amit Kumar, hence their statements are correct and valid. On analysis of gathered data of the conducted search, it was learnt that these RUPP's are either not carrying out any sort of genuine political or social activity or they are carrying out such activities to project themselves as genuine parties. However, in reality these political parties are being used as a vehicle of accommodation entries under the garb of political activities. The biggest advantage of creating a façade of a political party to propagate the accommodation entry scam is the fact that the income of political party is completely exempt from taxation as long as conditions laid down in section 13A of the Act, are satisfied. The perso....