THE DCIT (EXEMPTIONS), CIRCLE-2, AHMEDABAD vs. M/S. GUJARAT ENVIRONMENT SERVICE SOCIETY, ANAND

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ITA 3564/AHD/2016Status: DisposedITAT Ahmedabad15 May 2018AY 2012-136 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's activities were for a charitable purpose, specifically the preservation of the environment, and had been accepted as such in previous years. The Tribunal found no change in facts and circumstances from prior assessment years.

What were the facts?

The assessee society claimed exemption under Section 11(1)(a) of the Income Tax Act for AY 2012-13. The Assessing Officer disallowed this exemption, treating the surplus income as business income, citing the definition of charitable purpose under Section 2(15). The CIT(A) allowed the exemption, following previous years' orders.

What were the issues?

Whether the assessee's activities qualify as charitable purposes for exemption under Section 11(1)(a) in light of the definition in Section 2(15), and whether the CIT(A) was justified in allowing the exemption.

Which sections of the Income-tax Act were involved?

Section 11(1)(a),Section 2(15)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “ SMC ” BENCH, AHMEDABAD

Before: SHRI PRAMOD KUMAR&

For Respondent: Shri Sulabh Pad Shah, AR
Hearing: 09/05/2018

आदेश / O R D E R PER Ms. MADHUMITA ROY - JM: Being aggrieved by and/or dissatisfied with the order dated 29.09.2016 passed by the Commissioner of Income Tax(Appeals)-5, Vadodara [Ld.CIT(A) in short] for Assessment Year (AY) 2012-13 arising out of the assessment order dated 21.3.2015 passed by the ITO-

ITA No.3564/Ahd/2016 Dy.CIT (E) vs. M/s.Gujarat Environment Service Society Asst.Year – 2012-13 - 2 - Exemptions Ward Baroda, the instant appeal has been filed before us by the Revenue with the following grounds:-

(I) Whether on the facts and in the circumstances of the case the Ld.CIT(A) justified in giving the benefit of section 11(1)(a) of the Act which the A.O. disallowed by invoking the provision of section 2 (15).

II) On the facts and circumstances of the case, the Ld.Commissioner of Income-Tax (Appeals) ought to have upheld the order of the Assessing Officer.

2.

The brief facts leading to the case is this that the Assessee society has filed a return of income ITR-7 on 26.0.2012 declaring total income at Rs.NIL after claiming the exemption u/s.11 of the Act. The assessee society is a contractor and its activities are to undertake clean environment to the society as a whole and increase the facilities to have better environment as engaged by its member companies/concerns in the name and style of Gujarat Environment Service Society. The case was selected for scrutiny under CASS and the assessment was finalized u/s.143(3) of the Act vide order dated 21.03.2015 by making following disallowance. During the course of assessment proceedings, the learned

ITA No.3564/Ahd/2016 Dy.CIT (E) vs. M/s.Gujarat Environment Service Society Asst.Year – 2012-13 - 3 - AO has denied and rejected exemption claimed u/s.11(1)(a) of the Income tax Act on the ground that the activities of the appellant trust is not in the nature of charitable purpose in view of the definition of section 2(15) of the Act and therefore the amount of Rs.36,61,374/- as shown income over Expenditure in the Income-Expenditure account is treated as business income of the appellant.

2.1 Against the said order, the assessee filed an appeal before the Ld. CIT(A) and the Ld.CIT(A) allowed the appeal preferred by the assessee following the order passed by the learned CIT(A) in assessee’s own case for the AY 2010-11 and AY 2011-12 directing the Assessing Officer to grant exemption under section 11(1)(a) of the Act. Consequently, the addition of Rs.36,61,374/- on the account of disallowances claim of deduction under section 11 (1)(a) has been deleted.

3.

The Learned Representative of the assessee contended before us that the assessee has been allowed exemption under section 11(1)(a) for the last many years and the AO has not brought out any difference between the activities of the assessee in the years preceding the current assessment year and in the current assessment year. He has relied upon the order passed by the CIT(A) in assessee’s own case for the AY 2010-11 and AY 2011-12 whereby and whereunder the concerned AO was directed to

ITA No.3564/Ahd/2016 Dy.CIT (E) vs. M/s.Gujarat Environment Service Society Asst.Year – 2012-13 - 4 - grant exemption under section11(1)(a) to the assessee as claimed by it. The Learned Departmental Representative made no rival submission in this regard.

4.

It was further submitted by the AR that the said orders passed by the learned CIT(A) for the AY 2010-11 and AY 2011-12 have attended finality by a common order dated 25.10.2017 passed by the Co-ordinate Bench of this learned Tribunal upholding the said orders while dismissing the appeals preferred by the revenue. A copy of the said order dated 25.10.2017 was also produced before the court at the time of hearing of the matter.

5.

We have perused the said order; the operative portion thereof reads as follows:

“8. As discussed above, objects of the assessee has been reproduced by the Ld.CIT(A) in the finding extracted (supra). Main object of the assessee was for providing clean environment to the society, maintenance of garden, plantation, horticulture etc. These objects and activities of the assessee were in the nature of charitable purpose, and as such accepted by the Revenue in the past. Exemption under section 11(1)(a) of the Act has been granted to the assessee in the past, and there is no change in the

ITA No.3564/Ahd/2016 Dy.CIT (E) vs. M/s.Gujarat Environment Service Society Asst.Year – 2012-13 - 5 - facts and circumstances. Registration granted under section 12A has not been cancelled. The activity of the assessee does not fall in the expression “advancement of any other object of general public utility”. It is specifically fall within the ambit of “preservation of environment”. The Ld.CIT(A) has considered both these aspects and accepted explanation of the assessee that it is meant for preservation of environment as well as its objects are of charitable nature. The Ld.CIT(A) has put reliance upon the judgment of the Hon’ble Gujarat High Court in the case of Ahmedabad Management System, 47 taxmann.com 162 (Guj.). After considering well reasoned order of the Ld.CIT(A) I do not find any reason to interfere in it. It is upheld. Both the appeals are dismissed.”

5.1. We find that the issue is identical in nature and already covered by the assessee’s own case for the AY 2010-11 and AY 2011-12 by the decision of the Co-ordinate Bench of this learned Tribunal and, therefore, considering this particular aspect of the matter, we find no reason to interfere with the order passed by the learned CIT(A) and we thus dismiss the appeal preferred by the revenue.

ITA No.3564/Ahd/2016 Dy.CIT (E) vs. M/s.Gujarat Environment Service Society Asst.Year – 2012-13 - 6 - In the result, appeal of the Revenue is dismissed. 5. This Order pronounced in Open Court on 15 / 05/2018

Sd/- Sd/- (�मोद कुमार) (सु�ी मधु�मता रॉय) लेखा सद�य �या�यक सद�य ( PRAMOD KUMAR ) ( Ms. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 15/ 05/2018 ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-6, Vadodara �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation .. 9.5.18 (dictation-pad pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member …10.5.18 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S…….15.5.18 7. Date on which the file goes to the Bench Clerk…………………15.5.18 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………

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