ITAT Denies Section 80GGC Deduction for Political Donation:

The assessee filed his return of income for Assessment Year 2019–20, declaring a total income of Rs 3,88,620 and claiming a deduction of Rs 1,50,000 under Section 80GGC of the Income Tax Act, 1961, in respect of a donation made to Apna Desh Party, a Registered Unrecognised Political Party (RUPP). The donation was made through banking channels and was supported by a donation receipt. Subsequently, based on information arising from search and seizure proceedings conducted by the Investigation Wing in cases involving various RUPPs, including Apna Desh Party, the assessment was reopened.

However, the AO, relying on the Investigation Wing’s findings concerning the alleged accommodation-entry activities of Apna Desh Party, disallowed the deduction of Rs 1,50,000 under Section 80GGC and treated the amount as unexplained money under Section 69A read with Section 115BBE of the Act.

The CIT(A) upheld the AO’s action by order dated 21 August 2025. 

The Tribunal noted that the issue was covered by earlier decisions of coordinate Benches dealing with allegedly bogus political donations and claims under Section 80GGC. It referred to the investigation material, bank-trail analysis and the established modus operandi of recipient political parties involved in accommodation-entry transactions.

The Tribunal observed that, in the present case, the Revenue had brought on record material indicating that donations received by the political party were routed through intermediaries, including entities allegedly used for layering funds, rather than being retained as genuine political contributions. The investigation also included statements recorded on oath under Section 132(4) of the Income Tax Act, 1961.

The Tribunal observed that the mere fact that the donation was routed through banking channels and supported by a receipt could not, in the circumstances of the case, outweigh the evidence indicating that the recipient political party was engaged in systematically providing accommodation entries. Accordingly, the Tribunal found no infirmity in the order of the CIT(A) confirming the disallowance of the deduction under Section 80GGC and the consequential addition under Section 69A read with Section 115BBE of the Act.