TaxTMI 
TaxTMI 
2026 (9) TMI 1964
X X X X Extracts X X X X
X X X X Extracts X X X X
....as upheld the addition of Rs. 1,50,000/- u/s 80GGC in respect of donation of Rs. 1,50,000/- to Apna Desh Party (statutorily registered party) made by cheque. In the facts of the case, the notice issued u/s 148 on 11/04/2023 for the A.Y. 2019- 20 being beyond three asst. years from the end of the Asst. Year 2019-20 is invalid and liable to be quashed on the basis of the ratio laid down by Ahmedabad ITAT's order in the case of Vaibhav Kishanlal Jajoo (ITA No.1541/Ahd/2025) whereby it is held that the approval given by the PCIT instead of PCCIT / CCIT u/s 151(ii) is invalid if the approval is given for the assessment year beyond the period of three assessment years from the end of relevant assessment year i.e. A.Y. 2019-20. Prayer: The notice u/s 148 and the subsequent reassessment proceedings in the present case be held to be without jurisdiction and liable to be quashed and addition made by the Ld. AO disallowing the deduction of Rs. 1,50,000/- be deleted. Without prejudice to above ground, the following grounds are raised. Ground no.2 The CIT(A) NFAC has erred in points of law and on facts in completing the assessment on the basis of a n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....total income at Rs. 11,85,360/-. 4. Before the AO, the assessee contended that the donation was made through cheque, was duly reflected in the bank statement, return of income, and was supported by a donation receipt and ledger account. The assessee also filed reply to notice under section 148A(b) on 10.04.2023. The AO, however, relying upon the search and post-search investigation relating to bogus donations to political parties, held that the donation was not genuine and that the assessee had failed to establish the genuineness of the transaction. Accordingly, the deduction claimed under section 80GGC was disallowed. 5. Aggrieved against the assessment order, the assessee filed an appeal before the CIT(A) challenged both the validity of the reassessment proceedings and the addition on merits. It was specifically contended that the notice under section 148A(b) did not properly disclose the basis of escapement of income and that the AO had incorrectly observed that the donation was not reflected in the books/return. It was further contended that although reply dated 10.04.2023 had been filed, the AO, while passing the order under section 148A(d), recorded that no reply had be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the assessment year involved is A.Y. 2019-20 and the notice under section 148 was issued on 11.04.2023. However, the point of dispute is whether the notice u/s 148 has been issued within three years or beyond three years as per the provision of sec. 151 of the Act. In order to appreciate the notice period, the chronology of reopening proceedings is broken down as under: Events under reopening proceedings Date Remarks 148A(b) Show Cause Notice 28.03.2023 Reopening for AY 2019-20 Time given to the assessee for reply 10.04.2023 12 Days of time given to reply to notice Assessee's reply received by AO 10.04.2023 As per proviso, the limitation period to be computed excluding this 12 days 'notice-reply period. Order u/s 148A(d) 11.04.2023 - Time limit for reopening notice u/s 149(1)(a) as per Finance Act, 2023 w.e.f. 01.04.2023 i.e. reopening for cases within 3 years or less with approval of PCIT 31.03.2023 If exclusion period given in proviso not considered. 12.04.2023 As per proviso, 12 days 'notice period to excluded, to determine end of 3 years from AY 2019-20 i.e 12 days more after 31.03.2023. Approval u/s 151 by specif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssment 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 RashtriyaSamajwadi Party (Secular) To verify the genuineness and utilization purpose of the donation, a notice u/s 133(6....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom RSP is maintaining two other bank account one at Bank of India and another of Central Bank of India. Further enquiry of Mis. SterliteInc 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 pen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... unaccounted monies, 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. KamlenduTripathi 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 Pavanku....
X X X X Extracts X X X X
X X X X Extracts X X X X
....order. Therefore, the ground of appeal stands dismissed." 5. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The learned National Faceless Appeal Centre has erred in law and facts by confirming the disallowance of claim for deduction under section 80GGC of the Act of Rs. 1,13,51,000/- made by the learned A.O. and therefore the learned A.O. be directed to allow the same while computing total income. 2. That the appellant craves liberty to add, amend and alter any ground of appeal before the final hearing. 6. Ld. Counsel appearing for the assessee filed same set of documents filed before the Assessing Officer and reiterated its submissions. Nothing new documents or evidences filed before us to deviate from the findings of the Lower Authorities. The Ld AO has clearly brought out facts that bank accounts of above political parties have been used by the accommodation entry provider, where the donation received by cheques were layered through various bank accounts and ultimately cash was returned back. The same is not disputed by the assessee with relevant materials. Further the Ld AO made a d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s evident from the declaration made on oath by Smt. Sandhya Singh that although she is national party president of the party, however, all the work related with party is being looked-after by her husband Shri Bishwajeet Singh. She was not aware about any activity of the party. Further, vide Q. No. 18 and 19, she was categorically asked regarding details of bank accounts, books of accounts, nature and quantum of the expenditures of the Rashtriya, Samajwadi Party. In reply to the same, she again stated that she is not aware of any details regarding these subjects. She stated that all these things are being handled by her husband Shri Bishwajeet Singh. (iv) It is on record that statement of Shri Bishwajeet Singh, on oath u/s 132(4) of the I.T. Act, was recorded on 07.09.2022. During the statement proceedings, Shri Bishwajeet Singh admitted the fact that on his instance, his wife Smt. Sandhya Singh joined RSP, as president. During the statement proceedings, Shri Bishwajeet Singh revealed that the party i.e. RSP is involved in bogus donations scam across India and founder of party i.e. Shri Surya NathChaturvedi carried out bogus donations scam since inception of the party. He f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onor becomes eligible for the deduction u/s 80GGC of the Act and evades the income tax liability by claiming 100% deduction on donated amount irrespective of his/her ITR. Further, In the light of disclosures made by Shri SuryanathChaturvedi the former president and founder member of RSP (Secular), it is an established fact the RashtriyaSamajwadi Party has been formed to carry out bogus donations scam and bogus donation activities are being carried out from the inception of the party. All the party presidents from the inception have admitted that the RUPP is involved in the bogus donation scam. Moreover, Umapati IT Solution is a paper entity and has been used for layering of bogus donation received in the bank accounts of RSP(Secular). 23. From the above facts, it is abundantly clear that donation received by "RashtriyaSamajwadi Party" is bogus. The assessee has claimed deduction under Section 80GGC of the Act, and 80G(5) of the Act, which is also bogus and to that extent Assessment Order passed by assessing officer is erroneous and prejudicial to the interest of Revenue. There is a saying that The 'tail' cannot wag the 'dog'. When there is a fraud, then the....