ITAT Jodhpur sends reassessment back to CIT(A): jurisdiction, political donation and cash deposits to be reconsidered afresh

Background of the dispute

The case of Mohammed Aijaz Shaikh Vs ITO (ITAT, Jodhpur Bench) concerns reassessment proceedings for Assessment Year 2019-20. The assessee, an individual and retired employee of Hindustan Zinc Limited, originally filed his return of income on 08.08.2019 declaring Rs. 16,29,460. A revised return was subsequently filed on 26.08.2019 declaring an income of Rs. 16,35,490.

Based on information received by the department, a notice under Section 148A(b) of the Income-tax Act, 1961 was issued on 29.03.2023. The assessee responded on 02.04.2023. Thereafter, an order was passed under Section 148A(d) on 10.04.2023 and a notice under Section 148 was issued on the same date. In response to the reassessment notice, the assessee once again filed a return on 16.06.2023 declaring income of Rs. 16,35,490.

The reassessment stemmed from information that the assessee had allegedly donated Rs. 3,00,000 to “Rashtriya Samajwadi Party (Secular)” during the relevant financial year, based on search operations in respect of certain registered unrecognised political parties and intermediary concerns at Ahmedabad. During the reassessment, the Assessing Officer (AO) also identified aggregate cash deposits of Rs. 8,68,000 in the assessee’s State Bank of India account.

The reassessment order dated 07.02.2025 under Section 147 read with Section 144B determined the total income at Rs. 28,03,490, after:

  • Disallowing deduction of Rs. 3,00,000 under Section 80GGC in respect of the political donation, and
  • Treating cash deposits of Rs. 8,68,000 as unexplained money under Section 69A.

The assessee carried the matter in appeal before the National Faceless Appeal Centre [CIT(A)] and, being aggrieved by the appellate order dated 12.09.2025, further appealed to the ITAT, Jodhpur Bench.

Issues raised before the CIT(A)

The assessee’s appeal before the CIT(A) encompassed both jurisdictional and substantive challenges. Broadly, the grounds included:

  • Alleged non-compliance with requirements of Section 148A and Section 148
  • Objections to the time period allowed for furnishing the return pursuant to notice
  • Challenge to the competence of the Jurisdictional Assessing Officer to issue notice under Section 148, particularly in light of Notification No. 18/2022
  • Dispute on disallowance of deduction under Section 80GGC relating to the donation of Rs. 3,00,000 to Rashtriya Samajwadi Party (Secular)
  • Challenge to the addition of Rs. 8,68,000 under Section 69A for cash deposits in the SBI account
  • Request for cross-examination of representatives of the political party
  • Filing of the assessee’s son’s affidavit and supporting documents to explain sources of cash deposits.

The assessee also placed reliance on past donations made to other charitable organisations and produced proofs thereof, including a receipt of donation of Rs. 10,00,000 to Daiee Halima Maternity and General Hospital Trust, contending that this supported a consistent pattern of bona fide charitable contributions.

Findings of the Assessing Officer

Donation and deduction under Section 80GGC

On the donation of Rs. 3,00,000 claimed under Section 80GGC, the assessee produced:

  • Donation receipt
  • Relevant bank statement demonstrating payment through banking channels.

Despite this, the AO held that the assessee had not established the genuineness of the donation. Relying on information obtained from the Investigation Wing regarding activities of certain political parties and intermediaries, the AO disallowed the deduction under Section 80GGC, concluding that the claim was not substantiated in terms of genuineness.

Cash deposits and Section 69A addition

In relation to the aggregate cash deposits of Rs. 8,68,000 in the assessee’s SBI account, the explanation offered was that these amounts were deposited by the assessee’s son, out of income earned by him over several years. For this purpose, the assessee produced:

  • Copies of the son’s returns of income for AYs 2017-18 and 2018-19
  • Certain banking records of the son.

The AO was not satisfied with this explanation on the grounds that:

  • The complete bank statement of the son had not been provided
  • The son’s creditworthiness was not adequately proved.

Accordingly, the AO treated Rs. 8,68,000 as unexplained money under Section 69A and added it to the assessee’s income.

Order of the CIT(A)

The assessee challenged both the validity of the reassessment and the additions on merits before the CIT(A).