ITAT Rajkot allows tax deduction for political donation

The Income Tax Appellate Tribunal (ITAT) Rajkot has ruled in favor of a taxpayer, allowing a deduction under Section 80GGC for a political donation. The case involved Nitin T. Bhuptani, who claimed a ₹1,80,000 deduction for a contribution made to the Yuva Jan Jagruti Party during the 2019-20 assessment year.

The tax authorities had initially rejected the claim, alleging that the recipient political party was involved in facilitating bogus donations. However, the Tribunal held that a donor cannot be penalized for the alleged misconduct of a political party if the donation was made through legitimate banking channels.

The ruling emphasized that since the party was active and registered at the time of the contribution, and the donor provided documentary evidence of the transaction, the deduction must be allowed unless there is specific material proving the funds were actually returned to the donor.