The appeal before the Income Tax Appellate Tribunal, Ahmedabad Bench, arose from an order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, confirming the reassessment made under Section 147 read with Section 144B of the Income-tax Act, 1961 for the Assessment Year 2019-20.

The assessee had filed the return of income claiming deduction under Section 80GGC in respect of a donation made to a political party through banking channels. Subsequently, the assessment was reopened on the basis of information indicating that the political party was a registered but unrecognised political party and that the deduction claimed was not genuine.

During reassessment proceedings, the assessee furnished donation receipts, bank statements, and registration documents of the political party. However, based on extensive post-search enquiries into several registered unrecognised political parties, the Assessing Officer found that such parties were being used as conduits for accommodation entries. It was observed that donations received were immediately routed through multiple bank accounts and ultimately returned to the donors after retaining a commission.

The Assessing Officer carried out detailed verification of bank statements, transaction patterns, and conducted physical inspection of the political party’s premises. The findings revealed absence of genuine political activity and established a systematic modus operandi of fund rotation. Accordingly, the deduction claimed under Section 80GGC was disallowed.

The Commissioner of Income Tax (Appeals) affirmed the disallowance, relying on decisions of coordinate benches of the Tribunal in identical matters involving the same political party, where similar facts demonstrated that donations were merely accommodation entries.

Before the Tribunal, the assessee reiterated earlier submissions but failed to produce any new evidence to rebut the findings of the lower authorities. The Tribunal observed that the Assessing Officer had brought on record cogent material demonstrating that the donations were non-genuine and that routing through banking channels alone does not establish the authenticity of a transaction.

Following binding precedents on accommodation entries and sham transactions, the Tribunal held that the deduction under Section 80GGC was rightly disallowed. The appeal was accordingly dismissed.

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