2024 (6) TMI 724 - AT - Income Tax

Deduction u/s 80GGC for contributing to Rashtriya Komi Ekta party - Claim denied as said political party is an unrecognized political party and paper political party which is not recognized by Election Commissioner of India and have no address or infrastructure nor filed annual account to State Election Commissioner or Election Commissioner of India HELD THAT - We find that the assessee has not replied to basic question and the objection raised by the assessing officer about his doubt on the genuineness of contribution to such political party, except claiming that it is not his duty to verify the affairs of such political party. It is not the case of the assessee that he is one of the main officer bearer or having any organisational post either at the District level or State level in the said political party. Even the assessee has not provided the details of his bank account or the bank account of such political party. Before us, the assessee has filed copy of the receipt of contribution/ donation to the said political party along with the bank statement. No certificate is furnished in the form of verification of list of documents, if such bank statement is filed before lower authorities. Filing of such documents which were not certified, if filed before lower authorities, is not permissible. In view of the aforesaid factual discussions, we do not find any merit in the grounds of appeal raised by the assessee. As the impugned political party is an unrecognized political party. Thus, grounds of appeal raised by the assessee are dismissed.

Issues Involved:
1. Disallowance of Deduction u/s 80GGC
2. Levy of Interest u/s 234A, 234B, 234C, and 234D
3. Initiation of Penalty u/s 271.1.c

Summary:

1. Disallowance of Deduction u/s 80GGC:
The primary issue was the disallowance of the appellant's claim for a Rs.50,00,000/- deduction u/s 80GGC for contributing to Rashtriya Komi Ekta Party. The AO disallowed the deduction citing discrepancies such as the party's non-existence based on website verification, absence of annual accounts, and its unrecognized status by the Election Commission. The AO suspected the misuse of party funds for accommodation entries. Despite the appellant furnishing all required details, the AO presumed the contribution to be an accommodation entry without concrete evidence, infringing upon principles of natural justice. The appellant contended that the claimed deduction was genuine and eligible. The NFAC/Ld.CIT(A) upheld the AO's decision, noting that the political party was unrecognized, had not contested any elections, and lacked proper documentation. The Tribunal found no merit in the appellant's grounds, emphasizing that the appellant failed to verify the political party's compliance and existence, and dismissed the appeal.

2. Levy of Interest u/s 234A, 234B, 234C, and 234D:
The appellant contested the AO's decision to levy interest u/s 234A, 234B, 234C, and 234D of the Act. The Tribunal did not find any specific arguments or evidence from the appellant that would warrant a different conclusion from the lower authorities. Therefore, the Tribunal upheld the AO's decision to levy interest.

3. Initiation of Penalty u/s 271.1.c:
The appellant argued that the AO erred in initiating penalty proceedings u/s 271.1.c of the Act. The Tribunal noted that the appellant did not provide any substantial evidence or arguments to counter the AO's decision. Consequently, the Tribunal upheld the initiation of penalty proceedings.

Conclusion:
The Tribunal dismissed the appeal, finding no merit in the appellant's grounds regarding the disallowance of the deduction u/s 80GGC, the levy of interest u/s 234A, 234B, 234C, and 234D, and the initiation of penalty u/s 271.1.c. The Tribunal emphasized the appellant's failure to verify the political party's compliance and existence, and the lack of substantial evidence to counter the AO's findings.

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