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TMI Blog2023 (12) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in holding that the Appellant Trust is engaged in commercial activity not falling within the purview of 'charitable purpose' as required under section 80G(5) of the Act. 3. The learned CIT has erred in passing the impugned order without granting effective opportunity of hearing to the Appellant Trust. The Appellant Trust craves leave to add, alter, amend or withdraw all or any of the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing." 3. The only dispute raised by the assessee, in the present appeal, is against the denial of approval under section 80G of the Act. 4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee filed an application in Form 10AB seeking approval under section 80G of the Act. Form 10AC in this case was issued by the CPC granting provisional approval under section 80G of the Act. Vide order dated 30/03/2023 the learned CIT(E) rejected the prayer of the assessee for grant of approval under section 80G of the Act on the basis that the assessee is established for spending Corporate Social Respons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Huhtamaki India Ltd. as they require different quality of plastic raw material. 6. On the other hand, the learned Departmental Representative ("learned DR") submitted that CSR funds from the company were transferred to the assessee and therefore there is a nexus between the company and the assessee. It was further submitted that the assessee is engaged in the commercial activity, since as per its one of the objects it can provide integrated recycling and waste management services, ranging from simple recycling collections to full recycling and waste management solutions to businesses of all sizes. The learned DR submitted that the activities carried out by the assessee fall under the residual category of advancement of any other object of general public utility. 7. We have considered the submissions of both sides and perused the material available on record. The assessee was settled as an irrevocable trust, vide Trust Deed dated 09/10/2019, with the main object to work in the area of preservation of environment. The assessee is registered under the Bombay Public Trusts Act, 1950. Further, the assessee has also received a Registration Certificate for recycling plastic waste issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, NGOs and small businesses across different countries; k. To provide integrated recycling and waste management services ranging from simple recycling collections to full recycling and waste management solutions to businesses of all sizes; l. To work in close association with government bodies, inter governmental organizations, academia, Municipal Corporations, Housing Society and to invest in joint projects to eliminate & recycle plastic waste from the environment. j. To provide financial aid/ assistance to any other individual working in the related field or institutions having similar objects as mentioned herein above; k. To publish pamphlets, magazines and/or books or literature related to recycling of plastic wastes m. To undertake any such project, program, activities, campaigns, related to the area of conversation of environment and pollution abatement." 9. As per the assessee, the majority of the plastic waste generated in India pertains to MLP waste and since MLP material consists of layers of different polymers as well as metallised or paper-based layers, recycling such waste is difficult and uneconomical as compared to recycling other waste materials (such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n charitable purpose; (c) The institution or fund is not for the benefit of any particular religious community or caste; (d) The institution or fund maintains regular accounts of its receipts and expenditure; and (e) The institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860, or under any other law corresponding to that Act. 12. We find that vide Finance (No.2) Act, 2009 with retrospective effect from 01/04/2009, preservation of environment (including watersheds, forests, and wildlife), was included in the definition of "charitable purpose" under section 2(15) of the Act. From the perusal of the memorandum explaining the provisions in the Finance (No.2) Bill, 2009, forming part of the paper book from pages 77-79, we find that such an amendment was made so as to exclude the preservation of environment from the applicability of the conditions which are applicable to the "advancement of any other object of general public utility". From the perusal of the record, in the present case, we find that it is undisputed that the assessee has been involved in the recycling of plastic waste and therefore the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members of the taxpayer are being benefited and their statutory liability is being discharged by the assessee, by itself, would not be sufficient to hold that the assessee could not be said to have been set up for charitable purpose. In the present case, it is also pertinent to note that the MLP waste which is recycled by the assessee is collected from Pune and other nearby areas by NGOs and Huhtamaki India Ltd is not the direct source of such waste. Therefore, in view of the aforesaid decision, we find no merits in the aforesaid basis of the learned CIT(E) in rejecting the approval under section 80G of the Act. 16. Further, the assessee has submitted that Huhtamaki India Ltd does not purchase any product manufactured by the assessee nor use it as raw material. In support of this submission, the assessee has placed on record the list of parties to whom granules produced after recycling MLP waste were sold during the financial years 2021-22 and 2022-23. Further, the assessee has submitted that Huhtamaki India Ltd manufactures high-end flexible packaging materials such as pouch, label, specialised cartons, promotional materials, etc. for food products, confectionery items, beverage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cycling and waste management solutions to businesses of all sizes. From the perusal of the financial statements of the assessee for the financial years 2020-21, 2021-22, and 2022-23, we find that the assessee earned income only from donations, sale of scraps, and sale of finished goods and no such service was rendered to any entity. In any case, it is to be noted that such a service even if it is rendered by the assessee, the same will only be for the preservation of environment and thus is a charitable activity. It is evident from the record that no other objection was raised by the learned CIT(E) while denying the approval under section 80G of the Act to the assessee. Further, no doubt has been raised by the Revenue regarding the genuineness of the activity conducted by the assessee. Accordingly, we are of the considered view that the assessee satisfies all the conditions for the grant of approval under section 80G of the Act. Therefore, the impugned order dated 30/03/2023 denying the grant of approval under section 80G of the Act is set aside and the grounds raised by the assessee are allowed. 19. In the result, the appeal by the assessee is allowed. Order pronounced in the op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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