The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) partly allowed the appeal filed by Abhishek Rajeshbhai Karia for AY 2019-20 and restored certain issues to the Assessing Officer for fresh verification while granting relief on deductions claimed under Sections 80D and exemption under Section 10(5) of the Income-tax Act, 1961. A Single Member Bench comprising Judicial Member Suchitra Kamble observed that proper verification had not been carried out by the lower authorities in relation to deductions claimed under Section 80GGC and Section 80DDB.

The assessee had originally filed his return declaring a total income of Rs 16.95 lakh after claiming deductions under Sections 80C, 80D, 80DD, 80DDB and 80GGC, along with an exemption under Section 10(5). The case was reopened under Section 147 on the allegation that a donation of Rs 4 lakh made to the Rashtriya Samajwadi Party (Secular) under Section 80GGC was not genuine, as the political party was treated as a Registered Unrecognised Political Party (RUPP). The Assessing Officer also disallowed deductions claimed under Sections 80D, 80DDB and the exemption under Section 10(5), besides restricting TDS credit. The National Faceless Appeal Centre (NFAC) upheld the additions.

Before the Tribunal, the assessee contended that the donation was made through proper banking channels to a political party registered under Section 29A of the Representation of the People Act, 1951, and therefore fulfilled the conditions prescribed under Section 80GGC. It was also argued that the lower authorities relied only on generalised allegations without linking the assessee to any cash-back arrangement.

The Tribunal observed that the assessee had not furnished details of subsequent bank statements relating to the donations, and the same had not been properly verified by the Assessing Officer.

Therefore, the ITAT restored the issue relating to deduction under Section 80GGC to the file of the Assessing Officer for fresh verification after granting adequate opportunity of hearing to the assessee.

With regard to deduction under Section 80DDB relating to medical treatment expenses incurred for the assessee’s father suffering from cancer, the Tribunal noted that certain supporting documents sought by the department had not been furnished before the lower authorities.

The Bench held that the issue required proper verification and remanded the matter back to the Assessing Officer for adjudication in accordance with law.

However, on a deduction claimed under Section 80D, the Tribunal observed that medical expenditure incurred for parents was eligible for deduction and held that the disallowance made by the Assessing Officer was not justified.

The Tribunal also allowed the exemption claimed under Section 10(5) towards Leave Travel Concession (LTC), observing that the assessee had furnished all supporting details relating to travel expenses, but the same were overlooked by the Assessing Officer as well as the CIT(A).

On levy of interest under Section 234C, the Tribunal accepted the assessee’s contention that such interest is required to be computed on the returned income and not on the assessed income.

Thus, the ITAT partly allowed the appeal for statistical purposes and remanded certain issues to the Assessing Officer for fresh adjudication.

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