ITAT Justified Sec. 80GGC Disallowance as Assessee Donated 50% of His Income to Unrecognized Political Party

Case Details: Jayeshkumar Gopalbhai Akbari vs. Deputy Commissioner of Income Tax [2024] 162 taxmann.com 395 (Surat-Trib.)

Judiciary and Counsel Details

• • Pawan Singh, Judicial Member & Dr Arjun Lal Saini, Accountant Member
  • Rakesh Shah, CA for the Appellant.
  • Vinod Kumar, Sr-DR for the Respondent.

Facts of the Case

The assessee, an individual, derived income from house property, business income, and income from other sources. While filing the return of income for the relevant assessment year, the assessee claimed a deduction under section 80GGC for contributing to a political party.

During the assessment proceedings, the Assessing Officer (AO) found that the assessee contributed almost 50% of his earnings to a political party. To verify the genuineness of the assessee’s claim and the existence of the political party, the AO issued notice under section 133(6) to the political party. Meanwhile, he was informed that the political party failed to furnish its annual audited account and contribution report to the Chief Election Officer.

Subsequently, AO issued a show cause notice to the assessee to prove the genuineness of such donation/ contribution as the political party failed to furnish its bank statement and copy of form 24 submitted to the Election Commissioner of India. Dissatisfied with the assessee’s reply, the AO disallowed the entire donation to the political party and passed the assessment order accordingly.

On appeal, the CIT(A) upheld the order of AO. Aggrieved by the assessment order, the assessee preferred an appeal to the Surat Tribunal.

ITAT Held

The Tribunal held that the assessee did not furnish any specific evidence or pleaded facts other than those pleaded before the AO. The assessee had earned gross total income of Rs. 1.08 crores, out of which Rs. 50.00 lakh was donated to an unrecognized political party. There was no evidence that the said political party was active or had ever contested any regional or national-level election.

Further, the assessee had not replied to the basic question and the objection raised by the assessing officer about his doubt on the genuineness of his contribution to such political party, except claiming that it is not his duty to verify the affairs of such political party. It is not the assessee’s case that he is one of the main officer bearers or has any organizational post at the District level or State level in the said political party. Even the assessee has not provided the details of his bank account or the bank account of such political party.

The assessee had not explained how he contracted with such a political party and why such a huge donation was made to them. The assessee had not furnished anything in the assessment or appellate proceedings as to why he donated almost his half gross total income earned to a paper political party about whom he does not even base fact. The assessee before the Tribunal filed a copy of the receipt of contribution/donation to the said political party. No certificate was furnished in the form of verification of the list of documents.

Thus, the Tribunal confirmed the additions made by the AO.

List of Cases Referred to

• • Soni Ishwarlal Harjivandas v. DCIT ITA No.2972/AHD/2008/ITA No. 2972/Ahd/2008 (para 5)
  • Pavan Anil Bakeri v. Dy. CIT [2022] 142 taxmann.com 574 (Ahmedabad – Trib.) (para 4)
  • ACIT v. Armee Infotech ITA No.1778/AHD/2016 (para 5)
  • Sumati Dayal v. CIT [1995] 125 CTR 124/214 ITR 801/80 Taxman 89 (SC) (para 6).