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Facts
The assessee, a Unit Run Canteen (URC), challenged an assessment order for AY 2017-18 which treated cash receipts of Rs. 27,31,049/- from retired and serving armed forces personnel as taxable income. The assessee contended that its income is expressly exempt under Section 10(23AA) of the Income Tax Act, and therefore, the assessment was bad in law.
Held
The Tribunal remitted the matter back to the Assessing Officer for fresh adjudication. It directed the AO to verify the genuineness of the receipts and cash deposits, and the correctness of the exemption claim under Section 10(23AA), providing adequate opportunity of being heard to the assessee. The assessee's appeal was allowed for statistical purposes.
Key Issues
Whether cash receipts of a Unit Run Canteen from armed forces personnel are exempt from tax under Section 10(23AA) of the Income Tax Act.
Sections Cited
10(23AA)
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Income Tax Appellate Tribunal, DELHI BENCH “SMC’’ : NEW DELHI
ORDER This appeal by the assessee is emanating from the order of the Ld. CIT(A), Delhi dated 12.07.2024 relating to assessment year 2017-18.
Heard the rival contentions and perused the records.
It was the contention of the assessee made in the grounds of appeal that the AO has grossly erred in law and on facts in framing the assessment in the case of the assessee, a Unit Run Canteen (URC), whose income is expressly exempt under section 10(23AA) of the Act. The assessment is, therefore bad in law and liable to be quashed. It was the further contention that AO has erred in treating the cash receipt amounting to Rs. 27,31,049/- received from retired and serving armed forces personnel as taxable income. The said receipts pertain to the functioning of the Unit Run Canteen and are exempt from tax under section 10(23AA) of the Act. Per contra, Ld. DR relied upon the orders of the authorities below. In view of the aforesaid facts and circumstances, I am of the considered view that the aforesaid pleas of the assessee needs to be verified and examined at the level of the Assessing Officer, afresh, particularly the genuineness of the receipts and cash deposits and also the correctness and genuineness of the claim of exemption u/s. 10(23AA) of the Act by the Assessee and then decide the issue in dispute afresh, in accordance with law. Hence, in the interest of natural justice, I remit back the issues to the file of the Assessing Officer for fresh adjudication, after giving adequate opportunity of being heard to the assessee. I hold and direct accordingly. Assessee is also directed through his Ld. AR to fully cooperate with the AO and canvass its case properly.