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M/s. Exnora Green Pammal, Chennai Versus The Asst. Director of Income Tax, (Exemption) , Chennai.

2016 (3) TMI 45 - ITAT CHENNAI

Revision order u/s.263 - Exemption under 12A denied - Held that:- Definition of Sec.2(15) of the Charitable purpose Act and also submitted that surplus is incidental to the main object. We observed that there is no dispute about the genuineness of the trust and activities and compliance of legal provisions of the various laws and the activities are not against any public objective but in favour of the society. The trust being registered under the state laws and the Director of Income Tax (Exempt .....

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der is based on the contributor terms and such activities if considered a commercial activity there will not be any trust working in commercial atmosphere. Since the Assessing Officer has not verified on the grounds of commercial expediency, we are of the opinion that the matter has to be examined. So considering the facts and circumstances we set aside the Revision order u/s.263 of CIT(E) for limited purpose to the file of the Assessing Officer to verify the process of tender and applications a .....

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nt : Shri. V. Vivekanandan, CIT, DR ORDER PER G. PAVAN KUMAR, JUDICIAL MEMBER: The appeal filed by the assessee is directed against the Revision order u/s.263 of the Act of Commissioner of Income-tax (Exemptions), Chennai in CIT (E)No.263/2014-15, Dt. 30.03.2015 for the assessment year 2010-2011. 2. The assessee has raised grounds against the order of CIT(E) cancelling the assessment order passed by the Assessing Officer and directing the Assessing Officer to re-do the assessment. The grounds ra .....

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IT (E) vide order dated 30th November, 2012 under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') 3. The CIT (E) erred in directing the ADIT (E) to redo assessment denovo in light of the observation made by him in his order dated so" March, 2015. 4. The CIT (E) erred in holding that the 1 st proviso to section 2 (15) of the Act applied to the appellant Trust. 5. The CIT (E) erred in holding that the activity of the appellant Trust does not fall unde .....

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turn of income on 14.10.2010 admitting Nil income. The return was processed u/s.143(1) of the Act on 08.08.2011 and the case was selected for scrutiny and notice u/s.143(2) was issued. In compliance to the notice, the assessee s Authorised Representative appeared from time to time and filed information and also produced various documents. In the assessment proceedings, the Assessing Officer found that ₹ 10,00,000/- was shown as Corpus donation and claimed exempted u/s.11(1)(d) of the Act. .....

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e Management Implementation ₹ 2,05,43,133/- and also found that expenses were debited to the income and expenditure account on account of awareness expenses, project management expenses. The ld.CIT(E) on perusal of the trust deed and the objects of the trust came to a unilateral conclusion objects are of general public utility and made distinction with the amended provisions u/s.2(15) of the Act effective from 01.04.2009 and relied on the decision of ITAT, Panaji Bench and concluded that t .....

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nicipality : ₹ 49,48,148/- (ii) Indira Gandhi Centre for Atomic Research, Kalpakkam : ₹ 85,09,345/- (iii) Pepsi Food Pvt Ltd : ₹ 64,06,587/- (iv) Others : Rs. 6,79,053/- Total : ₹ 2,05,43,133/- Against the above receipts the assessee claimed various expenses which inter alia included the following:- (i) Awareness Expenses : ₹ 13,07,517/- (ii) Project Management Expenses : ₹ 50,11,379/- (iii) Site/ Shed Expenses : ₹ 1,12,37,398/- The assessee has received .....

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of any other object of public utility and further submitted that the civic objective of the trust comes under the provisions of Sec2(15) of the Act i.e. Preservation of environment including watersheds, forest and wildlife and preservation of monuments or places or objects of artistic or historic interest. The trust also study on promotion of animal and bird welfare and the objects of the trust prepared including various services to avoid the complexities in future. Further, it was explained th .....

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and profit motive and made a categorical finding that the assessee has participated in Tender process like any similar commercial activity and shall not take shelter under the Charitable Trust. The ld. CIT(E) consider the waste solid management is not charity and treated the activities of the trust as commercial activities and not as preservation of environment. Further without considering the itoto of submissions that the trust is creating civic awareness of healthier environment by sanitation .....

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on 7th September, 2006 with five authors and also registered u/s.12A by Director of Income Tax (Exemptions) vide letter dated 24.09.2007 and approval was granted u/s.80G of the Act by Director of Income of Tax (Exemption) vide letter dated 29.08.2008. The assessee Trust has been filing return of income regularly and in compliance to Sec.12A provisions financial statements of the trust are Audited by Chartered Accountant and the return of income was filed from assessment year 2008-2009 onwards. .....

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conditions of tender are very clear. The main object of the trust being solid waste management and other clauses also fall under definition charitable purpose u/s.2(15) of the Act. The only grievance of the CIT(E) being that the assessee trust activities are commercial activities. The ld. Authorised Representative filed statement of income from the date of inception to the latest for the year 2014 to show that trust is working effectively in the solid waste management projects and profit motive .....

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ion supporting the sanitation drive. The ld.AR drew attention to page Nos. 85 to 87 of paper book explaining the scope of projects and the cost incurred for each sector and the responsibility of trustees. Therefore, any action of the trust are within four corners of byelaws and has not violated any clause of trust and to support the case relied on the decision of Panaji Tribunal Bench in the case of Entertainment Society of Goa vs. CIT (2013) 34 taxmann.com 210 and pleaded for squashing the Revi .....

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aded for dismissal of appeal. 7. We heard the rival submissions of both the parties, perused the material on record and judicial decisions cited. The assessee trust is registered and obtained registration u/sec. 12A and approval under Sec. 80G of the Act. On perusal of the trust deed, the objects are more service oriented and the trust is in the third year of operation after registration. The activities of the trust are solid waste management and have other objectives also. On perusal of income .....

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visions and Regularly filing return of income. The CIT(E) treating the trust activities as not charitable in nature is without any basis. The ld. Authorised Representative drew our attention to the paper book from page Nos.1 to 75 were appreciation letters and photographs and media coverage were exhibited in English and Regional language. It shows that the trust is very effectively working for the common cause of the society and welfare of the citizen under the banner of clean environment. For t .....

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usal of the photographs and apprehension letters they conducted various awareness programmes and removed garbages and making environment clean and tide. In other words, it is a service to the humanity. Citizens of the society are benefited through clean environment and saved from diseases. The ld.AR relied on the decision of Ahmadabad Tribunal in the case of Deputy Director of Income Tax (E) Vs. Naroda Enviroprojects Ltd (2015) 43CCH 84 where similar activities fall under definition of Sec.2(15) .....

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