ITAT Denies Section 80GGC Deduction for Political Donation Found to Be an Accommodation Entry:

The assessee filed his return of income for Assessment Year 2019–20, declaring a total income of Rs 9,81,490 and claiming a deduction of Rs 1,90,000 under Section 80GGC of the Act for 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 assessee’s assessment was reopened. The AO disallowed the deduction claimed under Section 80GGC and treated the amount of Rs 1,90,000 as unexplained money under Section 69A read with Section 115BBE of the Act. Accordingly, the assessee’s total income was assessed at Rs 11,71,490 by an order dated 6 January 2025 passed under Section 147 read with Section 144B of the Act. The CIT(A) upheld the AO’s action by order dated 26 August 2025. 

The Tribunal noted that the issue concerning deductions claimed for donations to political parties allegedly involved in accommodation-entry transactions had been considered in several decisions of its coordinate benches. The Tribunal observed that the investigation material, statements recorded under Section 132(4) of the Act, analysis of bank transactions and the established modus operandi of the recipient political party collectively indicated that the donation was an accommodation entry rather than a genuine contribution eligible for deduction under Section 80GGC.

Applying the principle, the Tribunal held that the documentary evidence furnished by the assessee could not be considered in isolation from the investigation findings and the overall circumstances surrounding the donation. The fact that the payment was routed through banking channels and supported by a receipt did not, by itself, establish that the contribution was genuine.

The Tribunal further observed that the material on record, together with the consistent view taken by coordinate benches in similar cases, supported the conclusion that the assessee had failed to establish the genuineness of the donation. The Tribunal found no infirmity in the order of the CIT(A) affirming the AO’s action. Accordingly, it upheld the disallowance of the Rs 1,90,000 deduction claimed under Section 80GGC and sustained the consequential addition under Section 69A read with Section 115BBE of the Income Tax Act, 1961.