The Assessing Officer disallowed my s.80GGC deduction purely because the political party was named in a search on registered unrecognised political parties. He has no evidence that I got anything back. Is that enough to sustain the disallowance?
No. The Commissioner (Appeals) deleted the disallowance and the Tribunal upheld the deletion, holding that a disallowance in the hands of each donor requires primary evidence establishing that the particular transaction was not genuine — a bank trail, a statement or a confirmation linking that donor to the refund. General findings from a search in third-party cases, without confrontation or cross-examination, will not do.
Decided by the ITAT (Shri Partha Sarathi Chaudhury, Judicial Member (SMC Bench)) on 2026-02-05, reported as ITA No. 11/RPR/2026; Assessment Year 2019-20. It bears on section 80GGC, section 147, section 148, section 132, section 250 of the Income Tax Act 1961, in Deductions & Disallowances, Reassessment & Reopening, Evidence & Burden of Proof and Appeals matters.
This is the shape of the answer to the mass s.148 and s.148A notices on donations to registered unrecognised political parties. It is worth noting what the Revenue put in its grounds: that once the recipient is shown to be a conduit the onus lies heavily on the donor, and that the case falls within the exception in para 3.1(h) of CBDT Circular No. 5/2024 dated 15 March 2024, so the monetary limits in Circular No. 9/2024 dated 17 September 2024 do not protect a small disallowance from appeal. The department is appealing these deletions notwithstanding amounts of Rs 2,00,000. And this order is itself under appeal — the Chhattisgarh High Court has registered TAXC No. 56 of 2026, linked with TAXC No. 45 of 2026, so the point is live at High Court level.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee claimed a deduction of Rs 2,00,000 under s.80GGC for AY 2019-20 for a donation to Rashtriya Samajwadi Party (Secular). Following a search under s.132 on the registered unrecognised political parties group at Ahmedabad, that party was identified by the Investigation Wing, Ahmedabad as one of the entities providing accommodation entries in the guise of political donations. On that information the assessment was reopened under s.147 and s.148 and the Assessing Officer disallowed the Rs 2,00,000. The CIT(A)/NFAC deleted the disallowance by order dated 27 November 2025, recording that the payment had been made through banking mode against a printed receipt, that statements of key functionaries recorded on oath had admitted the refund of donations after retaining commission, but that no direct material had been brought to show that this appellant received any refund, that he had not been confronted with specific evidence, and that he had not been given cross-examination of the persons whose statements were relied on. The Revenue appealed on four grounds, including that the case fell within the exception in para 3.1(h) of CBDT Circular No. 5/2024 dated 15 March 2024 and was therefore fit for appeal notwithstanding the monetary limit in Circular No. 9/2024 dated 17 September 2024.
The Revenue's appeal was dismissed (paras 6 and 7). The Tribunal found no infirmity in the CIT(A)'s findings and upheld them (para 5). Although the department alleged that the recipient party was a tainted entity providing bogus accommodation entries through donations, the Assessing Officer had brought no evidence suggesting that the party derived commission and paid money back to this assessee, and nothing was on record establishing a direct nexus regarding any benefit derived by this assessee from the donation (para 4).
The Tribunal's own reasoning is short and turns entirely on the state of the record. It accepted the department's characterisation of the recipient party but held that the Assessing Officer had produced nothing to show that this assessee received the money back through the backdoor, and nothing establishing a direct nexus between this assessee and any benefit from the party (para 4). It then adopted the first appellate authority's analysis, quoted at para 3, that while the wider investigation points to systemic irregularities, a disallowance in the hands of each donor requires primary evidence establishing the non-genuineness of that specific transaction, and that a disallowance made purely on presumption and general findings, without a bank trail, a statement or a confirmation, and without confrontation or cross-examination, cannot be upheld (paras 3 and 5).
However, the A.O had not brought out any evidence which suggests that the said political party has derived commission and has paid money back to the assessee through backdoor.
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Handle my notice → Ask a CA on WhatsAppNo. The Commissioner (Appeals) deleted the disallowance and the Tribunal upheld the deletion, holding that a disallowance in the hands of each donor requires primary evidence establishing that the particular transaction was not genuine — a bank trail, a statement or a confirmation linking that donor to the refund. General findings from a search in third-party cases, without confrontation or cross-examination, will not do. This was decided by the ITAT (Shri Partha Sarathi Chaudhury, Judicial Member (SMC Bench)) and bears on section 80GGC, section 147, section 148, section 132, section 250 of the Income Tax Act 1961. It is reported as ITA No. 11/RPR/2026; Assessment Year 2019-20. This is the shape of the answer to the mass s.148 and s.148A notices on donations to registered unrecognised political parties. It is worth noting what the Revenue put in its grounds: that once the recipient is shown to be a conduit the onus lies heavily on the donor, and that the case falls within the exception in para 3.1(h) of CBDT Circular No. 5/2024 dated 15 March 2024, so the monetary limits in Circular No. 9/2024 dated 17 September 2024 do not protect a small disallowance from appeal. The department is appealing these deletions notwithstanding amounts of Rs 2,00,000. And this order is itself under appeal — the Chhattisgarh High Court has registered TAXC No. 56 of 2026, linked with TAXC No. 45 of 2026, so the point is live at High Court level. If it applies to you, the first step is this: Make the absence of assessee-specific material the central ground: no bank trail back to you, no statement naming you, no confirmation of a refund.
The assessee claimed a deduction of Rs 2,00,000 under s.80GGC for AY 2019-20 for a donation to Rashtriya Samajwadi Party (Secular). Following a search under s.132 on the registered unrecognised political parties group at Ahmedabad, that party was identified by the Investigation Wing, Ahmedabad as one of the entities providing accommodation entries in the guise of political donations. On that information the assessment was reopened under s.147 and s.148 and the Assessing Officer disallowed the Rs 2,00,000. The CIT(A)/NFAC deleted the disallowance by order dated 27 November 2025, recording that the payment had been made through banking mode against a printed receipt, that statements of key functionaries recorded on oath had admitted the refund of donations after retaining commission, but that no direct material had been brought to show that this appellant received any refund, that he had not been confronted with specific evidence, and that he had not been given cross-examination of the persons whose statements were relied on. The Revenue appealed on four grounds, including that the case fell within the exception in para 3.1(h) of CBDT Circular No. 5/2024 dated 15 March 2024 and was therefore fit for appeal notwithstanding the monetary limit in Circular No. 9/2024 dated 17 September 2024. The matter was decided on 2026-02-05 by the ITAT (Shri Partha Sarathi Chaudhury, Judicial Member (SMC Bench)). On those facts the ITAT held as follows. The Revenue's appeal was dismissed (paras 6 and 7). The Tribunal found no infirmity in the CIT(A)'s findings and upheld them (para 5). Although the department alleged that the recipient party was a tainted entity providing bogus accommodation entries through donations, the Assessing Officer had brought no evidence suggesting that the party derived commission and paid money back to this assessee, and nothing was on record establishing a direct nexus regarding any benefit derived by this assessee from the donation (para 4).
The Tribunal's own reasoning is short and turns entirely on the state of the record. It accepted the department's characterisation of the recipient party but held that the Assessing Officer had produced nothing to show that this assessee received the money back through the backdoor, and nothing establishing a direct nexus between this assessee and any benefit from the party (para 4). It then adopted the first appellate authority's analysis, quoted at para 3, that while the wider investigation points to systemic irregularities, a disallowance in the hands of each donor requires primary evidence establishing the non-genuineness of that specific transaction, and that a disallowance made purely on presumption and general findings, without a bank trail, a statement or a confirmation, and without confrontation or cross-examination, cannot be upheld (paras 3 and 5). In the words reproduced by the source cited on this page: "However, the A.O had not brought out any evidence which suggests that the said political party has derived commission and has paid money back to the assessee through backdoor."
It was decided by the ITAT on 2026-02-05 and is reported as ITA No. 11/RPR/2026; Assessment Year 2019-20. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 80GGC, section 147, section 148, section 132, section 250, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's appeal was dismissed (paras 6 and 7). The Tribunal found no infirmity in the CIT(A)'s findings and upheld them (para 5). Although the department alleged that the recipient party was a tainted entity providing bogus accommodation entries through donations, the Assessing Officer had brought no evidence suggesting that the party derived commission and paid money back to this assessee, and nothing was on record establishing a direct nexus regarding any benefit derived by this assessee from the donation (para 4). It arises in Deductions & Disallowances, Reassessment & Reopening, Evidence & Burden of Proof and Appeals matters, on section 80GGC, section 147, section 148, section 132, section 250 of the Income Tax Act 1961, and was decided by Shri Partha Sarathi Chaudhury, Judicial Member (SMC Bench). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Ask in writing for the statements relied on and for cross-examination of the party functionaries; the CIT(A) here recorded the failure to confront as a distinct defect. Keep the primary evidence — banking mode of payment, the donation receipt, and the party's certificate of registration under s.29A of the Representation of the People Act 1951 — but do not stop there; several benches have held that a cheque is not by itself sacrosanct. Expect the department to appeal even a small deletion by invoking para 3.1(h) of Circular 5/2024, and do not rely on the monetary limits. Watch the Chhattisgarh High Court in TAXC No. 56 of 2026 before treating this as settled.
Under appeal, and the appeal has not been decided. The Revenue appears to have appealed to the High Court of Chhattisgarh at Bilaspur, but the identification rests on the parties rather than on the record: the High Court's order sheet names neither the Tribunal, nor ITA No. 11/RPR/2026, nor an assessment year, so the link is drawn from the matching respondent and the matching appellant designation and nothing more. Its order sheet in TAXC No. 56 of 2026, The Assistant Commissioner of Income Tax Circle - 1(1) v. Anuj Prakash Gupta, dated 20 August 2026 before Parth Prateem Sahu J and Sachin Singh Rajput J, grants the appellant one week to cure a Registry defect and directs the case to be linked with TAXC No. 45 of 2026. No decision on the merits has been given. Separately, the Delhi Bench in Arun Pratap Singh v ITO, ITA No. 1134/Del/2026 decided 12 June 2026, was invited to follow this order and declined to do so, dismissing the assessee's appeal on donations to the same party. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read in full from the plain /doc/ URL; 7 numbered paragraphs with the disposal at para 7. Paragraph 3 is a block quotation of the CIT(A)/NFAC's order; the reasoning attributed to the first appellate authority here is taken from that quotation and is identified as such. The Tribunal's own reasoning is confined to paragraphs 4 and 5 and is brief. The order does not record the date of the s.148 notice or of the assessment order. The assessee appeared in person. The Revenue's grounds are reproduced in full at para 1 and are the source for the references to CBDT Circular No. 5/2024 and Circular No. 9/2024; the text of those circulars was not independently retrieved on this pass and nothing is stated here about their contents beyond what the grounds say. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's appeal was dismissed (paras 6 and 7). The Tribunal found no infirmity in the CIT(A)'s findings and upheld them (para 5). Although the department alleged that the recipient party was a tainted entity providing bogus accommodation entries through donations, the Assessing Officer had brought no evidence suggesting that the party derived commission and paid money back to this assessee, and nothing was on record establishing a direct nexus regarding any benefit derived by this assessee from the donation (para 4).
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