In a significant ruling for the 2019-20 Assessment Year, the Income Tax Appellate Tribunal (ITAT), Raipur Bench, has reinforced a fundamental legal boundary: the Revenue cannot disallow a deduction based solely on "general presumptions" derived from third-party investigations.
The case of ACIT vs. Anuj Prakash Gupta (ITA No.11/RPR/2026) serves as a critical precedent for taxpayers facing scrutiny over donations made to Registered Unrecognized Political Parties (RUPPs).
The Background: The ₹2,00,000 Disallowance
The dispute began when the Assessing Officer (AO) disallowed a deduction of ₹2,00,000 claimed by the taxpayer under Section 80GGC. The basis for this disallowance was a search operation conducted on a RUPP group in Ahmedabad.
The investigation wing flagged the recipient—Rashtriya Samajwadi Party (Secular)—as an entity involved in providing "accommodation entries" (bogus donations) in exchange for commissions. Consequently, the AO concluded that the taxpayer's donation was part of a larger tax evasion racket.
The Turning Point: Evidence Over Suspicion
While the Revenue argued that the "onus" was on the taxpayer to prove the genuineness of the donation and the creditworthiness of a "tainted" recipient, the Tribunal took a much more evidence-based approach.
The ITAT upheld the earlier deletion of this addition by the CIT(Appeals), highlighting several "missing links" in the Revenue's case:
Verified Banking Mode: It was undisputed that the taxpayer made the payment through a "banking mode and obtained a printed receipt".
No Specific Nexus: The AO failed to bring any "direct material" or "bank trail" on record to prove that this specific taxpayer ever received a cash refund or backdoor benefit.
The Burden of Primary Evidence: The Bench noted that while wider investigations pointed to systemic irregularities, a disallowance in the hands of an individual donor requires "primary evidence establishing the non-genuineness of that specific transaction".
Presumption is Not Proof: The order explicitly stated that a disallowance made "purely on presumption and general findings cannot be upheld in absence of specific corroboration".
The Final Verdict: Appeal Dismissed
The Judicial Member, Shri Partha Sarathi Chaudhury, found no infirmity in the findings of the first appellate authority. The Tribunal concluded that without evidence suggesting the political party paid money back to the assessee, the deduction under Section 80GGC must stand.
Result: The Revenue’s appeal was dismissed.
Key Takeaways for Tax Professionals
Documentation is Shielding: A clear bank trail and a valid receipt are the strongest defenses against "bogus" allegations.
Challenge the "General Finding": If an AO relies on search findings from a third party without linking them directly to your client, this ITAT order provides the perfect ground for a challenge.
Specific Corroboration is Mandatory: The Revenue carries the burden of proving that a specific transaction was a sham through a bank trail or statements—not just by labeling the recipient as "tainted".