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Dy. Commissioner of Income Tax, Circle – 7, Pune Versus World Institute of Sustainable Energy

2015 (7) TMI 156 - ITAT PUNE

Eligibility for exemption u/s. 11 - Assessing Officer has acknowledged that the appellant has carried out activities related to the consultancy, public awareness and research in the field of renewable energy, his view that such activities were not of general public utility - Held that:- Activities were not of general public utility, is not a correct as the various activities carried out by the appellate in the field of education training, public awareness, policy advocacy and research in the cau .....

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the assessee has carried out any of its activities abroad. One of the essential conditions for claiming benefit of exemption u/s. 11 is that the activities have to be carried out by the trust in India. In case the charitable activities of the assessee are beyond India territory, the assessee will not be eligible for the benefit of section 11. The Commissioner of Income Tax (Appeals) in his orders has observed that there is no material on record to show that the activities of the assessee extend .....

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ption contained in section 13(1)(c) is on revenue. For the discussions made above and in the law which demands the Assessing Officer to discharge the onus of application of sec. 13(1)(c) for denying the benefit of sec. 11, it has to be held that in the face of the fact that no evidences have been brought on record by the Assessing Officer to hold the payment to Suzlon and Enercon as undue or excessive, the finding that there is some infringement of sec. 13(1)(c) is erroneous. The Assessing Offic .....

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ion is not engaged in making private profit or its income has not been diverted for the benefit of interested persons, there is no reason to deny an assessee the benefit of sec. 11, so long as the other statutory provisions are satisfied. Therefore, the Assessing Officer's contentions that the salary and remuneration paid to. the Director General is more than what should have been paid is held to have no basis and cannot be sustained - Decided against revenue. - ITA Nos. 04 & 05/PN/2014 - Dated: .....

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igible for exemption u/s. 11 of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The brief facts of the case as emanating from records are: The assessee is a Trust registered under the Societies Registration Act, 1860. The assessee is also registered under the Bombay Public Trust Act, 1950. The assessee has been formed with the primary object of providing training in Sustainable Energy and Conservation of Energy. The main objects as listed in Memorandum of Association of the as .....

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sultancy provider in the field of sustainable energy and energy conservation. • To take up technical and other research in selected and specialized areas of vital importance for augmenting and accelerating sustainable development in a holistic manner, for a transition to a cleaner and greener world. • To establish, maintain and operate libraries, laboratories and prototype training centres and hold seminars and training programmes in concordance and furtherance to these objectives. 3. .....

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w, in the impugned assessment years the Assessing Officer has held that the assessee is not eligible for exemption u/s. 11 of the Act. The Assessing Officer refused to grant exemption to the assessee primarily on four grounds: i. The assessee has not carried out any charitable activities; ii. The operations of the assessee extend to foreign countries (Abroad); iii. The trustees are the Directors of major windmill manufacturing companies, from which the assessee has purchased windmills; and iv. T .....

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2004-05 and 2005-06 before the Tribunal. 4. Shri B.C. Malakar appearing on behalf of the Revenue vehemently supporting the assessment order submitted, that the assessee in Clause 3 of the Memorandum of Association has categorically mentioned that the scope of work of assessee extends to Abroad. The ld. DR further submitted that the assessee is not carrying out any educational activities. The assessee is neither recognized nor registered with any Board or University. The assessee has not been ab .....

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ncludes preservation of environment. The ld. AR submitted that the assessee was registered under the Societies Registration Act, 1860 on 18-12-2003 and under the Bombay Public Trust Act, 1950 on 23-04-2004. The assessee was granted registration u/s. 12A of the Act on 05-03-2004 and the benefit of section 80G w.e.f. 13-10-2005. The assessee has conducted training programmes in furtherance of the futuristic human resource needs of sustainable energy, sustainable development and energy conservation .....

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ing awareness in Sustainable Energy and Conservation of Energy. The ld. AR further contended that the Governing Council of the assessee appointed Shri G.M. Pillai, I.A.S. (Retd.) as the Director General. He had wide exposure and experience in the field of Energy Development and Conservation. He has represented India at United Nations Development Plan. The ld. AR vehemently supported the orders of Commissioner of Income Tax (Appeals) and prayed for dismissing the appeals of the Revenue. In suppor .....

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Officer has denied exemption to the assessee primarily on four grounds: i. The assessee has not carried out any charitable activities since its inception; ii. The activities of the assessee extend to foreign countries (Abroad); iii. The trustees of the assessee are Directors of windmill manufacturing companies from which the assessee has purchased windmills. Thus, the trustees are substantially interested in the said companies and serving the cause of the said companies; and iv. The salaries/per .....

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. The Commissioner of Income Tax cancelled the registration on the ground that the activities of the trust are not genuine and that they are not in accordance with the objects of the trust and provisions of section 13(1)(c) of the Act. The assessee challenged the order of Commissioner of Income Tax before the Tribunal in ITA No. 930/PN/2011. The Tribunal after appreciating the documents on record, vide order dated 28-02-2013 set aside the order of Commissioner of Income Tax and restored the regi .....

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9;charity' is undoubtedly of the widest import. A charitable organization encompasses a company formed under section 25 of the Companies Act or a society formed under Society Registration Act, 1860 or any Stale Act for Registration of Societies. A charitable trust should have public character in the sense that its activities, while not reaching out to humanity as a whole, are available to a cross section of the public. At the same time, charity need not be confined to the poor. The philanthr .....

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ng agricultural produce [CIT vs Agricultural Produce and Marketing Committee 291 ITR 419 Bombay] (ii) legal awareness [CIT vs Andhra Chamber of Commerce 55 ITR 722 SC] (iii) promotion of diamond bourse [DIT vs Bharat Diamaond Bourse 259 ITR 280 SC] (iv) yoga training [CIT vs Rajneesh Foundation 200 ITR 553 Bombay] (v) educating public in safety [DIT(Exemptions) vs National Safety Council 305 ITR 257 Bombay] 4.3.7. Therefore, in my humble opinion, though the Assessing Officer has acknowledged tha .....

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sustainable development and environmental protection have been discussed and in the absence of the any specific negative finding by the Commissioner of Income Tax-IV, Pune, it has been held that his action in cancelling the registration granted to the appellant trust u/s 12A(a) by invoking the provision of sec. 12AA(3) of the IT Act was not justified. In the ultimate, the ITAT has restored the registration of the trust that was originally granted on 05.03.2004. 8. The second ground for rejecting .....

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tion 11. The Commissioner of Income Tax (Appeals) in his orders has observed that there is no material on record to show that the activities of the assessee extend outside India. The findings of the Commissioner of Income Tax (Appeals) on this issue are as under: 4.3.10. Therefore, this objection of the Assessing Officer that the situs of the trust shows that the essential condition regarding application of income within India only, is not fulfilled, is seen to be based on only presuppositions a .....

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third ground for denying exemption u/s. 11 to the assessee by Assessing Officer is, the trustees are the Directors of the companies from which the assessee has purchased windmills. Thus, the trustees of the assessee trust have substantial interest in the companies manufacturing windmills. The Commissioner of Income Tax (Appeals) discarded these findings of the Assessing Officer with following observations: 4.3.16. In the present case, it is not denied that substantial donations have been receiv .....

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been used or applied directly or indirectly for the benefit of such person. The specific mode of infringement of the conditionalities ate prescribed u/s 13(2) so as to make the general provision of sec. 13(1)(c) more specific. In the present case, the Assessing Officer mentioned that the windmills costing ₹ 17,40,00,390/- have been purchased from companies in which the trustees are substantially interested but he has not brought any clinching or corroborative evidences on record to show th .....

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be upheld in the facts of the case and the law. If the contentions of the Assessing Officer are carefully considered in an unbiased manner, it is not difficult to see that the Assessing Officer has drawn his contentions or arguments mostly on assumptions that Suzlon and Enercon being life members of the trust must have derived undue benefit from the income of the trust. However, when the question of denying the benefit or exemption u/s. 11 to the trust arises, the decision cannot be taken on suc .....

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face of the fact that no evidences have been brought on record by the Assessing Officer to hold the payment to Suzlon and Enercon as undue or excessive, the finding that there is some infringement of sec. 13(1)(c) is erroneous. The Assessing Officer has failed to bring on record adequate materials which can support his findings. 10. The last and fourth ground for refusing to grant exemption u/s. 11 by Assessing Officer is, excessive remuneration/perquisites paid to Shri G.M. Pillai, Director Ge .....

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