TMI Blog2019 (11) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity and is in the nature of profit making, we find that benefit of exemption cannot be denied on the ground that it had made surplus/pro fits as long as it is not meant for private profit of seller. Profit making is not predominant object of activity. CIT(A) was justified in holding that assessee is doing charitable activity as per Section 2(15) benefit of Section 11 12 is available to it. CIT(A) was justified in directing AO to treat the activity of assessee company as charitable and further rightly directed to delete the addition - Decided against revenue. - ITA. No: 114/AHD/2018 - - - Dated:- 27-11-2019 - Shri Mahavir Prasad, Judicial MEMBER And Shri Amarjit Singh, Accountant Member Appellant by: Shri Anshu Prakash, CIT, D.R. Respondent by: None ORDER Mahavir Prasad, 1. This appeal filed by the Revenue is directed against the order of the Ld. CIT(A)-7, Ahmedabad dated 03.10.2017 pertaining to A.Y. 2014-15 and following grounds have been taken: 1. The Ld. CIT(A) has erred in the law and on facts in considering the activity of the assessee which is in the nature of advancement of general public utility not hit by the newly introduced fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and for this objective, the appellant is providing pollution control treatment for disposal of liquid and solid industrial hazardous waste. The: appellant was originally registered as a commercial company under the Companies Act, 1956 on 19/10/1995. Thereafter, the appellant company was subsequently converted into a company limited by shares, incorporated u/s. 25 the Companies Act. 1956; i.e. a company which does not exist for earning the. profit as such but exist for promotion of welfare and wellbeing of the society and people at large. The appellant company has been accorded registrations u/s, 12AA of the Income Tax Act by the Director of Income Tax (Exemption), Ahmedabad and also had been approved and recognized as an institution u/s. 80G (5) of the Income Tax Act, 1961 and the jurisdiction of the appellant company rests with the Deputy Director of Income tax (Exemption) Ahmedabad. This registration u/s, 12AA and approval u/s. 80(G)(5) of the IT. Act arc in force even as on this date, advancement of any other object of general public utility . The AO is therefore in gross error in denying the appellant's benefit of Section 11 and 12 of the I.T. Act. The activities carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val u/s. 12AA of the IT. Act and also approval/recognition u/s. 80(G) (5) of the IT. Act, These documents bear testimony to the fact that the activities of the Assessee are in the nature of 'charitable purpose' within the meaning and scope of Section 2(15) of the I.T. Act, as amended by Finance Act, 2,008. Please note that the Assesses is directly involved in preservation of environment and conservation of natural resources and also advancement of other object of general public utility. Please note that 'preservation of environment' is one of the charitable purposes referred to in Section 2(15) of the I.T. Act. Pollution abatement; environmental protection, prevention and control of water pollution, handling and Irons-boundary movement of hazardous wastage discharged by the industries set up in the in the industrial estate at Naroda, Vatva and Odhau and many other parts of Gujarat only for the industry and even state and Central Government have given recognition and is also for the advancement of general public utility. But for the Assessee's activities in abating and controlling the pollution of environment, air and water by the industrial waste and pollutant g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the said Circular No, 11/2008 dated 19/12/2008 is submitted herewith as per Annexure - 4 (Pages AS to A6),Para 2,1 of the said circular clearly provides that newly inserted proviso to Section 2 (.15) will not apply in respect of the first three limbs of Section 2 (15) i.e, relief to the poor, education or medical relief. Consequently, where the purpose of the trust or institution is relief of the poor, education or medical relief, it will constitute charitable purpose even if it incidentally involves the carrying on of commercial activities. Since, the object of the appellant company is preservation of environment it is a charitable institution within the meaning of Section 2 (15) of the I.T. Act. The proviso to Section 2 (15) of the I.T. Act has no applicability at all to the facts of the appellant's case. It is further submitted that the Income Tax Department has duly accepted the fact lh.nl the appellant Assesses is a charitable institution, the returns of income filed for assessment years -2006 07 to 2008-09 claiming the benefits of Section 11 and 12 of the I.T. Act had been accepted and assessed by the predecessor AO and even m scrutiny assessment made u/s. 14313) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The addition of ₹ 7,59,26,949/- is accordingly deleted. Grounds of appeal nos. 1 to 6 are allowed. 5. In the result, the appeal is allowed. 7. Now Revenue has come before us by way of second appeal. 8. None appeared on behalf of the assessee but ld. D.R. vehemently relied on order of the Assessing Officer. 9. We have gone through the relevant record and impugned order and heard ld. D.R. As we can see, that ld. CIT(A) granted relief to the assessee following Coordinate Bench decision in ITA No. 546/Ahd/2013 for A.Y. 2009-10 wherein Co-ordinate Bench granted relief to the assessee with following observation and dismissed the appeal of the Revenue: 4. After going through rival submissions and material on cord, we find that main object of assessee company was converted as per Section 25 of Companies Act clarifies that assessee company is in area of environmental protection, abetment of pollution of water, air, solid, etc. generated by industrial units in and around Vatva and Odhav area of Ahmedabad. Accordingly, Assessing Officer has not disputed the fact that assessee is doing basic activity of treatment of various pollutants generated by industrial units. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee company is directly engaged in preservation of environment as per Section 2(15), the proviso as pointed by Assessing Officer is not applicable in the instant case. Accordingly, Assessing Officer was not justified to conclude that assessee is not doing any charitable activity. With regards to Assessing Officer's contention that assessee is carrying out business activity and is in the nature of profit making, we find that benefit of exemption cannot be denied on the ground that it had made surplus/pro fits as long as it is not meant for private profit of seller. Profit making is not predominant object of activity. Under the facts and circumstances, CIT(A) was justified in holding that assessee is doing charitable activity as per Section2(15) of the Income-tax Act, benefit of Section 11 12 of the Income-tax Act is available to it. Accordingly, CIT(A) was justified in directing Assessing Officer to treat the activity of assessee company as charitable and further rightly directed to delete the addition of ₹ 2,53,21,438/-. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same. 5. In the result, appeal filed by Revenue is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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