Case Law Details
CIT Vs Army Wives Welfare Association (Allahabad High Court)
Section 10(23AA) Exemption u/s allowed only if income received on behalf of regimental fund or non-public fund established by the armed forces of the Union
In the given case the benefit of exemption under Section 10(23AA) of the Act of 1961 was denied to the assessee as it was not claimed at the time of submission of return. It was claimed at the time of assessment. Aggrieved by the order of Assessing Authority, the assessee preferred an appeal before the CIT(Appeals). It was dismissed while partly allowing the appeal on other issues. The assessee approached the tribunal thereupon where order of the CIT(Appeals) was set aside with remand of the case. During the intervening period, a notice under Section 148 of the Act of 1961 was given. In pursuance to the notice under Section 148, assessment order was passed while the matter was pending before the CIT(Appeals) on the issue of exemption under Section 10(23AA) of the Act on remand of the case. The assessee challenged the order of assessment by maintaining appeal which was heard alongwith the appeal on issue of Section 10(23AA) of Act on its remand. The CIT(Appeals) allowed the appeal and granted exemption under Section 10(23AA).
A challenge to the order was made before the tribunal but appeal preferred by the revenue was dismissed. Perusal of the order of the tribunal does not reflect a detailed discussion in reference to exemption under Section 10(23AA). The issue aforesaid has been decided by referring certain orders passed by other ITAT’s and Bombay High Court. It is without considering Section 10(23AA) and the facts of the case
As per Section 10(23AA), the exemption can be for the income received by any person on behalf of any regimental fund or non-public fund established by the armed forces of the Union for the welfare of the past and present members. In the instant case, the assessee has failed to prove income on behalf of regimental fund or non-public fund established by the armed forces of the Union. The establishment should be of armed forces of the Union with receipt of the fund of the nature given under the said provision. The issue aforesaid has been ignored by the tribunal so as by the CIT(Appeals). It seems to have been persuaded only by one issue which was initial denial of the exemption under Section 10(23AA) as it was not claimed at the time of submission of return but during the course of assessment. It may be that assessee can claim the exemption under Section 10(23AA) at the time of assessment but entitlement for it was required to be decided by CIT(Appeals) and the tribunal. On the facts of the case, HC do not find that the assessee was entitled for exemption under Section 10(23AA) of the Act of 1961 when it failed to prove it case. Thus, the order of the CIT(Appeals) and the tribunal to allow the exemption under the aforesaid provision cannot sustained and hence exemption under Section 10(23AA) will not allowed to the assessee.
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