ITAT allows Deduction for Donation to Political Party, Dismisses ACIT Appeal for Lack of Evidence

ITAT Raipur dismissed ACIT’s appeal for AY 2019-20, allowing the assessee’s Rs.2 lakh Section 80GGC deduction. The tribunal held that the department produced no proof of fake donation or cash return; payments were through banking channels with receipts, and CIT(A)’s relief was confirmed.

The present appeal has been filed by the Assistant Commissioner of Income Tax (ACIT) in the ITAT Raipur, challenging an order dated November 27, 2025, passed by the CIT(A)/NFAC Delhi favouring a taxpayer named Anuj Prakash Gupta. The case is related to the Assessment Year 2019-20.

The dispute is regarding a deduction of Rs. 2 lakh claimed by the assessee under Section 80GGC for a donation made to a political party, named the Rashtriya Samajwadi Party (Secular). Following a search carried out in the case of RUPP’s group, Ahmedabad, under Section 132 of the Act, the political party, Rashtriya Samajwadi Party (Secular), was found to be involved in bogus donation entries, considering which, the Assessing Officer (AO) reopened the case under Section 147/148 of the Act, concluding which the AO disallowed a deduction amounting to Rs. 2 lakh under Section 80GGC of the Act.

The aggrieved assessee approached the CIT(A); the CIT(A) deleted the disallowance made by the AO and allowed the appeal of the assessee, considering the fact that the AO could not provide any specific proof that the assessee received any refund or that the donation was fake. Additionally, the assessee had made payments using proper banking channels and had proper receipts of the same. The tax authorities, being aggrieved with the ruling of the CIT(A), approached the ITAT, Raipur.

When the tribunal analysed the facts of the case, it observed that the department failed to show any direct connection between the assessee and the alleged bogus activities and also failed to furnish any evidence proving that money was returned to him. Since the disallowance was based only on general assumptions and not on solid evidence against the assessee, the Tribunal upheld the CIT(A)’s order and dismissed the department’s appeal.