The Ahmedabad bench of Income Tax Appellate Tribunal ( ITAT ), upheld the revision order and held that no enquiries was made by AO in respect of genuineness of receipts of the donation issued to the political party for confirming the deduction claimed under Section 80GGC of the Income Tax Act, 1961.
The assessee Rakesh Balubhai Padariya’s Assessment was finalized under Section 143(3) of the Act by accepting returned income. On verification of case records, Principal CIT noted that the assessee has claimed deduction under Section 80GGC of Rs. 25,00,000/- for donation made to one political party “Apna Desh Party” .
After analyzing the assessment Principal CIT set aside the assessment order as being erroneous and prejudicial to the interests of the Revenue and directed the assessing officer to pass a fresh assessment order after calling for additional details/evidence as required for verification of the issue.
Aggrieved, the assessee filed an appeal before the tribunal.
Assesee representative, S. N. Divatia submitted that observations made by the Principal CIT were general observations regarding the modus operandi of the “Apna Desh Party” in question and no specific allegation has been made against the assessee.
Further the counsel for assessee argued that all the information and material which were used by the principal CIT while passing the 263 order were not provided to the assessee so as to give an opportunity to rebut the same.
Abhishek Kumar , the Department representative argued that assessing officer passed a cryptic order and did not make any efforts to enquire into the receipts issued by “Apna Desh Party” to ascertain whether they were genuine or not, while allowing deduction to the assessee under Section Chapter VI of the Act.Therefore the Assessing Officer simply accepted the version of the assessee and did not make any effort to make any inquiries regarding the source of making the aforesaid donations and also did not verify the genuineness of the receipts issued by “Apna Desh Party”.
The tribunal during the proceedings observed that there was an evident lack of enquiry by the assessing officer, while accepting the claim of deduction of donation by the assessee, while framing the assessment order.
Thus In the instant case, certain noteworthy discrepancies emanating from facts of the case ought to have been enquired by the assessing officer, while framing the assessment, and he should not have simply accepted the version offered by the assessee. Therefore, in an analysis of receipts issued by “Apna Desh Party” it was observed that such receipts did not contain details of cheque number, bank name, date of cheque etc. issued.
Accordingly the tribunal concluded that While framing the assessment, the Assessing Officer simply accepted the version of the assessee and did not make any attempt to verify the genuineness of the receipts issued by “Apna Desh Party”.
After observing the submissions of both parties the two-member bench of Annapurna Gupta, ( Accountant member ) and Siddhartha Nautiyal ( Judicial Member )held that the assessing officer simply allowed the claim of deduction of donation by the assessee, without carrying out the necessary enquiries Therefore the bench dismissed the appeal filed by the assessee. And upheld the revision order.
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