Reassessment Quashed for Procedural Lapses: AO's "Inadvertent" Error Proves Fatal, Abhishek Jayketu Joshi Vs AC CIR-42(2)(1), Mumbai,

The recent ruling of the ITAT Mumbai in ITA No. 5775/Mum/2025 (order dated 13.01.2026) serves as an important precedent for cases involving alleged bogus political donations disallowed under Section 80GGC.

In Abhishek Jayketu Joshi (AY 2019–20), the assessee claimed a deduction of ₹5,00,000 under Section 80GGC for a donation made to the Kisan Party of India, a political party duly registered with the Election Commission of India under Section 29A of the Representation of the People Act, 1951.

The Assessing Officer (AO) reopened the assessment under Section 147, relying on search-related information alleging that certain political parties were providing accommodation entries. The deduction was disallowed on the basis of "human probabilities", notwithstanding that the donation was made through banking channels and supported by a valid receipt. The CIT(A) confirmed the disallowance.

The Tribunal quashed the reassessment proceedings on multiple procedural grounds:

• Erroneous Section 148A(b) Notice:

The show-cause notice issued under Section 148A(b) incorrectly named "Aadhar Foundation" as the donee instead of the Kisan Party of India. The AO later admitted this mistake as an "inadvertent error." The Tribunal held that such factual inaccuracies demonstrate non-application of mind, rendering the proceedings void ab initio.

• Violation of Natural Justice:

Despite repeated requests, the AO failed to furnish any underlying material, investigation reports, or statements allegedly relied upon for reopening. Relying on the Bombay High Court's decision in Anurag Gupta, the Tribunal held that denial of access to material relied upon vitiates the entire reassessment.

• Denial of Cross-Examination:

The AO relied on statements recorded under Section 132(4) without granting the assessee an opportunity to cross-examine the persons whose statements were used against him—constituting a serious breach of natural justice.

Even on merits, the Tribunal found the disallowance unsustainable:

• The assessee furnished complete documentary evidence, including donation receipts, bank statements evidencing cheque payment, and proof of the political party's ECI registration.

• No positive evidence was brought on record to establish cash-back, routing, or circular transactions.

• The Tribunal reiterated that suspicion, conjecture, or generalized allegations cannot substitute legal proof.