The DCIT, (Exemptions), Circle-1, Ahmedabad V. Naroda Enviro Projects Ltd., Ahmedabad

ITA 114/AHD/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2167 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-10-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 09-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Rule of consistency; Benefit of exemption
• Section: 143(3); 80G; 12AA; 143(1); 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER) ITA. NO: 114/AHD/2018 (ASSESSMENT YEAR: 2014-15) THE DY. COMMISSIONER OF INCOME-TAX (EXEMPTIONS), CIRCLE-1, AHMEDABAD V/S NARODA ENVIRO PROJECTS LTD., PLOT NO. 512, 515, PHASE-1, GIDC ESTATE, NARODA, AHMEDABAD (APPELLANT) (RESPONDENT) PAN:AAFFN 9138D APPELLANT BY : SHRI ANSHU PRAKASH, CIT, D.R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 14 -10-201 9 DATE OF PRONOUNCEMENT : 27-11-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T 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: ITA NO. 114/ AHD/2018 . A.Y. 2014-15 2 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 FIRST AND SECOND PROVIS O TO SEC.2(15) OF THE ACT. 2. THE LD CIT(A) HAS ERRED IN THE LAW AND ON FACT S IN ALLOWING THE BENEFIT OF EXEMPTIONS U/S. 11 WITHOUT CONSIDERING THE FACT THA T THE ASSESSEE IS INVOLVED IN WIDESPREAD COMMERCIAL ACTIVITIES IN NATURE OF BUSIN ESS AND THE ACTIVITY OF THE ASSESSEE IS COVERED UNDER FIRST AND SECOND PROVISO TO SEC.2(15) OF THE ACT. 3. THE LD CIT(A) HAS ERRED IN THE LAW AND ON FACT S IN ALLOWING THE ACCUMULATION OF RS.4,16,24,5037- U/S.11(2) AND ACCUMULATION @15% OF RS.3,43,02,447/- U/S.11(1)(A) OF THE ACT WITHOUT APPRECIATING THE FA CT THAT ONCE THE PROVISO TO SECTION 2(15) IS APPLICABLE, THE BENEFIT OF SECTION 11 AND 12 CANNOT BE ALLOWED FURTHER. 4. THE REVENUE CRAVES OVER LEAVE TO ADD, A LTER, AMEND, MODIFY, SUBSTITUTE, DELETE AND/OR RESCIND ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING, IN NECESSITY SO ARISES. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE, NARODA ENV IRO PROJECT LTD. IS A COMPANY REGISTERED U/S. 25 OF THE COMPANIES ACT. IT IS ENGAGED IN THE ACTIVITIES OF MANAGEMENT OF LIQUID AND SOLID WASTES IN NARODA INDUSTRIAL. AREA. THE ASSESSEE COMPANY IS REGISTERED U/S. 12AA OF IHE 1, T, ACT, VI.DE ORDER NO R.NO. D1T(E)/ 1 2AA/624/05-06 DATED 04/07/2007. THE COMPANY IS ALSO APPROVED U/S. 80G(5) OF THE 1. T. ACT, 1961 BY THE OFFICE OF THE DIT(E), AHMEDABAD. 3. DURING THE COURSE OF ASSESSMENTS PROCEEDING FOR AY 2009- 1 0, A.Y, 20 10- 11 AND 2011-1.2, 20 12- 13 & 2013-14 IT HAS BEEN CONTI NUOUSLY HELD THAT THE ASSESSEE EARNED PROFIT IN THE NAME OF PROTECTION OF ENVIRONMENT AND HENCE ACTIVITIES UNDERTAKEN BY THE COMPANY COULD NOT BE T REATED AS PRESERVATION OF ENVIRONMENT, BUT UNDER THE LIMB OF THE ADVANCEMENT TO GENERAL PUBLIC UTILITY. THE ASSESSEE WAS NOT GRANTED THE BENEFIT OF SECTION 1.1 AND 12 OF THE L.T, ACT, AND TAXED ITS PROFIT. ITA NO. 114/ AHD/2018 . A.Y. 2014-15 3 4. DURING THE COURSE OF THE PROCEEDINGS, THE ISSUES RE GARDING THE- ACTIVITY OF THE ASSESSEE WERE UNDER QUESTION. SINCE THE FACTUAL MAT RIX OF THE EASE WAS SIMILAR TO THE PREVIOUS ASSESSMENT YEARS A SHOW CAUSE NOTIC E WAS ISSUED ON 23.11,2016. THE ASSESSEE FURNISHED THE WRITTEN REPLY OF SHOW CA USE ON 02,12.2016 WHICH IS PRODUCED BELOW: - 5. 1 NOTE ON JUSTIFICATION OF THE ASSESSEE U/S 2(15) OF THE INCOME TAX ACT 1961, THE APPELLANT IS ENGAGED IN THE ACTIVITY OF PRESERV ATION OF ENVIRONMENT BY ABATEMENT AND CONTROLLING POLLUTION OF ENVIRONMENT I,E, LAND, WATER AND AIR AND FOR THIS OBJECTIVE, THE APPELLANT IS PROVIDING POLL UTION CONTROL TREATMENT FOR DISPOSAL OF LIQUID AND SOLID INDUSTRIAL HAZARDOUS W ASTE. THE: APPELLANT WAS ORIGINALLY REGISTERED AS A COMMERCIAL COMPANY UNDER THE COMPANIES ACT, 1956 ON 19/10/1995. THEREAFTER, THE APPELLANT COMPANY WAS S UBSEQUENTLY CONVERTED INTO A COMPANY LIMITED BY SHARES, INCORPORATED U/S. 25 T HE COMPANIES ACT. 1956; I.E. A COMPANY WHICH DOES NOT EXIST FOR EARNING THE. PROFI T AS SUCH BUT EXIST FOR PROMOTION OF WELFARE AND WELLBEING OF THE SOCIETY A ND 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), AHME DABAD 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 U TILITY'. THE AO IS THEREFORE IN GROSS ERROR IN DENYING THE APPELLANT'S BENEFIT OF S ECTION 11 AND 12 OF THE I.T. ACT. THE ACTIVITIES CARRIED OUT BY THE APPELLANT DURING THE YEAR SQUARELY FALLS WITHIN THE MEANING AND SCOPE OF CHARITABLE ACTIVITIES AS D EFINED IN SECTION 2 (15) OF THE INCOME TAX ACT. FOR THE PURPOSE OF READY REFERENCE, SECTION 2 (.15) OF THE LT. ACT IS REPRODUCED HEREUNDER: '2(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE PO OR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATER SHEDS, FOREST AND WILD LIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBL IC UTILITY. PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THEY CARRYING ON OF ANY ACT IVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OR RETENTION OF THE INCOME FROM SUCH ACTIVITY. ITA NO. 114/ AHD/2018 . A.Y. 2014-15 4 PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT A PPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TEN LAC RUPEES OR LESS IN THE PREVIOUS YEAR.' A PLAIN READING OF SECTION 2 (15), REPRODUC ED HEREINABOVE, WILL REVEAL THAT PRESERVATION OF ENVIRONMENT IS A CHARITABLE ACTIVI TY BY ITSELF. THE APPELLANT COMPANY HAD BEEN ACTIVELY ENGAGED IN PRE SERVATION OF THE ENVIRONMENT BY CONTROLLING THE POLLUTION OF AIR, WATER AND SOI L BY THE POLLUTANTS GENERATED BY THE INDUSTRIAL UNITS LOCATED IN NARODA INDUSTRIAL A REA. AS A MATTER OF FACT, THE ASSESSES BEING A COMPANY REGISTERED U/S. 25 OF THE COMPANIES ACT WHICH DOES NOT EXIST FOR PROFIT AND WHICH HAS NO PROFIT MOTIVE AND WHICH CANNOT DISTRIBUTE DIVIDEND TO THE SHAREHOLDERS, HAS NOT CARRIED ON AN Y BUSINESS ACTIVITY AS SUCH BUT HAD PURSUED THE OBJECT FOR WHICH IT WAS ESTABLISHED I.E. PROTECTION OF ENVIRONMENT BY CONTROLLING THE POLLUTION OF WATER, AIR AND SOIL. THE REGISTRATION GRANTED U/S. 12AA OF THE LT. ACT AND RECOGNITION/ APPROVAL U/S, 80G (5J OF THE LT, ACT ARE IN EXISTENCE AND HAS LEG AL FORCE AND APPLICABILITY TO ALL THE PROCEEDINGS UNDER THE INCOME TAX ACT. NEEDLESS TO MENTION HERE THAT IN THE LADDER OF OFFICIAL HIERARCHY, THE DIRECTOR OF INCO ME TAX (EXEMPTION/ IS ON THE HIGHEST RANK. THE OFFICER OF THE HIGHEST CADRE I N THE INCOME TAX DEPARTMENT, AFTER DUE VERIFICATION AND EXAMINATION OF THE ISSUE S INVOLVED, IN HIS WISDOM HAD THOUGHT IT FIT TO GRANT APPROVAL 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 T HE ASSESSEE ARE IN THE NATURE OF 'CHARITABLE PURPOSE' WITHIN THE MEANING AND SCOPE O F 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 CONSERV ATION OF NATURAL RESOURCES AND ALSO ADVANCEMENT OF OTHER OBJECT OF GENERAL PUB LIC UTILITY. PLEASE NOTE THAT 'PRESERVATION OF ENVIRONMENT' IS ONE OF THE CHARITA BLE PURPOSES REFERRED TO IN SECTION 2(15) OF THE I.T. ACT. POLLUTION ABATEME NT; ENVIRONMENTAL PROTECTION, PREVENTION AND CONTROL OF WATER POLLUTION , HANDLING AND IRONS-BOUNDARY MOVEMENT OF HAZARDOUS WASTAGE DISCHARGED BY THE I NDUSTRIES SET UP IN THE IN THE INDUSTRIAL ESTATE AT NARODA, VATVA AND ODHAU AN D MANY OTHER PARTS OF GUJARAT ONLY FOR THE INDUSTRY AND EVEN STATE AND CE NTRAL GOVERNMENT HAVE GIVEN RECOGNITION AND IS ALSO FOR THE ADVANCEMENT OF GENE RAL PUBLIC UTILITY. BUT FOR THE ASSESSEE'S ACTIVITIES IN ABATING AND CONTROLLING TH E POLLUTION OF ENVIRONMENT, AIR AND WATER BY THE INDUSTRIAL WASTE AND POLLUTANT GEN ERATED BY THE MANUFACTURING UNITS IN THE INDUSTRIAL AREA, THE LIFE FOR THE PEOP LE IN AND AROUND THE INDUSTRIAL AREA WOULD HAVE BEEN MISERABLE. IT IS ONLY ON APPRE CIATION OF THE RELEVANT FACTS THAT THE HIGHEST AUTHORITY OF THE INCOME TAX AUTHOR ITY I.E': THE DIRECTOR OF INCOME ITA NO. 114/ AHD/2018 . A.Y. 2014-15 5 TAX (EXEMPTION) HAD CONSIDERED THE ACTIVITY OF THE ASSESSES AS FOR CHARITABLE PURPOSES AND ACCORDED REGISTRATION U/S, 12AA AND AP PROVAL U/S. 80G (5), THERE IS NO CHANGE WITH RESPECT TO THE FACTS AS WELL AS LAW. ' IT IS VERY SIGNIFICANT TO MENTION HERE THAT ON THE BASIS OF THE ASSESSMENT ORDER U/S. 143(3) FOR A.Y. 2009-10 WHEREIN THE AO HAS DEN IED THE BENEFITS OF THE PROVISIONS OF SECTION 11 AND 12 TO THE APPELLANT, T HE DIRECTOR OF INCOME TAX (EXEMPTION/, AHMEDABAD HAD ISSUED A SHOW CAUSE NOTI CE U/S. 12AA (3J FOR CANCELLATION OF THE REGISTRATION GRANTED TO THE APP ELLANT U/S, 12AA. THE HON'BLE DIRECTOR OF INCOME TAX (EXEMPTION), AHMEDABAD ON EV ALUATION OF EVIDENCE AND APPRECIATION OF FACTS WAS CONVINCED OF THE CHARITAB LE ACTIVITIES CARRIED OUT BY THE APPELLANT AND THE PROCEEDINGS INITIATED U/S. 12AA ( 3) OF THE I.T. ACT HAD BEEN DROPPED VIDE LETTER NO, DIT(E)/12AA/NARODA/12-13/87 6 DATED 15/3/2013. THE APPELLANT SUBMITS THAT THE PROVISO BELOW SECTIO N 2(15) WOULD BE APPLICABLE ONLY IN RELATION TO THE ACTIVITY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY, THE APPELLANT SUBMITS THAT WHEN T HE AMENDMENT WAS MADE TO SECTION 2 (15) OF THE I.T. ACT VIDE FINANCE ACT, 2008, THE THEN FINANCE MINISTER IN THE PARLIAMENT MADE IT VERY CLEAR TH AT GENUINE TRUSTS WILL NOT SUFFER BY VIRTUE OF THE AMENDMENT, HE FURTHER STATED IN HI S SPEECH IN THE AUGUST HOUSE OF PARLIAMENT THAT THE CENTRAL BOARD OF DIRECT TAXE S WOULD ISSUE EXPLANATORY CIRCULAR CONTAINING GUIDELINES FOR DETERMINING WHET HER ANY ENTITY IS CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BU SINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS. ACCORDINGLY THE DEFINITION OF CHARITABLE PURPOSE U/S 2(15) IS S UBMITTED HEREWITH AS PER ANNEXURE - 1 (PAGE AL), ALONGWITH THE SAME ABSTRA CTS FROM THE BUDGET AND THAT FROM THE SPEECH OF THE HON. FINANCE MINISTER ARE SU BMITTED HEREWITH AS PAR ANNEXURE - 2 (PAGES A3 & A3) AND ANNEXURE - 3 (PAG E A4). THE CBDT SUBSEQUENTLY CAME OUT WITH A CIRCULAR EXPLAINING THE DEFINITION OF CHARITABLE PURPOSES AS AMENDED BY THE FINANCE ACT, A COPY OF T HE SAID CIRCULAR NO, 11/2008 DATED 19/12/2008 IS SUBMITTED HEREWITH AS PER ANNEX URE - 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 FI RST 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 INCIDENTAL LY INVOLVES THE CARRYING ON OF COMMERCIAL ACTIVITIES. SINCE, THE OBJECT OF THE APP ELLANT COMPANY IS PRESERVATION OF ENVIRONMENT IT IS A CHARITABLE INSTITUTION WITHI N 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. ITA NO. 114/ AHD/2018 . A.Y. 2014-15 6 IT IS FURTHER SUBMITTED THAT THE INCOME TAX DEPARTM ENT HAS DULY ACCEPTED THE FACT LH.NL THE APPELLANT ASSESSES IS A CHARITABLE I NSTITUTION, THE RETURNS OF INCOME FILED FOR ASSESSMENT YEARS -2006 07 TO 2008-09 CLAI MING THE BENEFITS OF SECTION 11 AND 12 OF THE I.T. ACT HAD BEEN ACCEPTED AND ASS ESSED BY THE PREDECESSOR AO AND EVEN M SCRUTINY ASSESSMENT MADE U/S. 14313) FOR A.Y, 2006-07 AND 2008-09, THE PREDECESSOR AO HAD MADE THE ASSESSMENT OF THE A PPELLANT M ACCORDANCE WITH THE PROVISIONS OF SECTION 11 AND 12 OF THE ACT . IN OTHER WORDS, AS PER THE RECORDS OF THE INCOME TAX DEPARTMENT, THE APPELLANT HAD BEEN ASSESSED AS A CHARITABLE INSTITUTION IN ACCORDANCE WITH THE PROVI SIONS OF SECTION 11AND 12 OF THE INCOME TAX ACT. THE PRINCIPLE OF CONSISTENCY OF APPROACH POSTULATES THAT AN EARLIER DECISION TAKEN ON ISSUE IS TO BE FOLLOWED IN THE SUBSEQUENT YEAR IF THERE IS NO CHANGE WITHOUT RESPECT 1O THE FACTS AND LAW. IN THE PRESENT CA.S E OF. THE APPELLANT ASSESSE.FI, THERE HAS BEEN NO CHANGE IN RESPECT OF THE ACTIVITI ES EARNED ON BY THE ASSESSES M THE, PRECEDING YEAR AND THE YEAR UNDER APPEAL, TH ERE HAS BEEN NO CHANGE WITH RESPECT TO THE FACTS AS WELL AS LAW. THEREFORE, TH E PRINCIPLE OF CONSISTENCY OF APPROACH IS APPLICABLE IN THE APPELLANT'S CASE. THE APPELLANT SUBMITS THAT ON PRINCIPLES OF CONSISTENCY, THE ACTION OF THE AO IN DENYING THE APPELLANT BENEFITS OF THE PROW'S IONS OF SECTION 11 AND 12 OF T HE I.T, ACT IS NOT MAINTAINABLE IN LAW, PARTICULARLY SO WHEN SUCH BENEFIT WAS ALLOWED TO THE APPELLANT IN THE SCRUTINY ASSESSMENTS MADE FOR A.Y. 2008-09, 2006 0 7 AND ALSO IN THE SUMMARY ASSESSMENT U/S. 143(1) IN A.Y. 2007-08. NEED LESS TO MENTION HERE THAT THE SCRUTINY ASSESSMENT U/S. 143(3) R.W.S. 147 FOR A.Y . 2008-09 WAS PASSED BY THE ASSISTANT DIRECTOR OF INCOME TAX (EXEMPTION), AHMED ABAD ON I6/ 12/201 1 WHEREIN THE AO HAD ACCEPTED THE INCOME RETURNED BY THE ASSESSES IN ACCORDANCE WITH THE PROVISIONS OF SECTION 1 1 OF THE INCOME TA X ACT. 5. BUT LD. A.O. WAS NOT CONVINCED WITH THE CONTENTION OF THE ASSESSEE AND MADE ADDITION OF RS. 7,59,26,949/-. 6. AGAINST THE SAID ORDER, ASSESSEE PREFERRED FIRST ST ATUTORY APPEAL BEFORE THE LD. CIT(A) WHO GRANTED RELIEF TO THE ASSESSEE WITH FOLL OWING OBSERVATION: 4.2.1 FOLLOWING THE DECISION OF THE HON'BLE ITAT, I T IS SEEN THAT THE SAME ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT FOR THE PRE CEDING ASST. YEARS I.E. ASST, ITA NO. 114/ AHD/2018 . A.Y. 2014-15 7 YEARS 2010-11, 2011-12,2012-13 & 2013-14 AS WELL . RESPECTFULLY FOLLOWING THE DECISIONS OF MY PREDECESSORS AND THE ORDER OF THE H ON'BLE ITAT ON THE SAME ISSUE IN THE APPELLANT'S OWN CASE, THE IT IS HELD THAT TH E APPELLANT COMPANY WAS ENGAGED IN THE PRESERVATION OF ENVIRONMENT AND THER EFORE IT WAS ENGAGED IN CARRYING OUT CHARITABLE ACTIVITIES. THE ADDITION OF RS. 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 APP EAL. 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 IMPUGN ED ORDER AND HEARD LD. D.R. AS WE CAN SEE, THAT LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE FOLLOWING CO- ORDINATE BENCH DECISION IN ITA NO. 546/AHD/2013 FOR A.Y. 2009-10 WHEREIN CO-ORDINATE BENCH GRANTED RELIEF TO THE ASSESSEE WI TH FOLLOWING OBSERVATION AND DISMISSED THE APPEAL OF THE REVENUE: 4. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERI AL ON CORD, WE FIND THAT MAIN OBJECT OF ASSESSEE COMPANY WAS CONVERTED AS PER SEC TION 25 OF COMPANIES ACT CLARIFIES THAT ASSESSEE COMPANY IS IN AREA OF ENVIR ONMENTAL PROTECTION, ABETMENT OF POLLUTION OF WATER, AIR, SOLID, ETC. GENERATED B Y INDUSTRIAL UNITS IN AND AROUND VATVA AND ODHAV AREA OF AHMEDABAD. ACCORDINGLY, ASS ESSING OFFICER HAS NOT DISPUTED THE FACT THAT ASSESSEE IS DOING BASIC ACTI VITY OF TREATMENT OF VARIOUS POLLUTANTS GENERATED BY INDUSTRIAL UNITS. IT IS ALS O NOT DISPUTED BY ASSESSING OFFICER THAT SURPLUS GENERATED IS NOT DISTRIBUTED T O ITS MEMBERS/SHAREHOLDERS, ETC. THE ASSESSEE CANNOT LOOSE EXEMPTION MERELY ON THE GROUND THAT IT HAS MADE SURPLUS AS LONG AS ASSESSEE IS NOT GENERATING SURPL US FOR PRIVATE PROFIT OF THE SETTLER OR ANY OTHER PERSON. IN THIS SITUATION, ASS ESSING OFFICER WAS NOT JUSTIFIED IN HOLDING THAT ASSESSEE WAS GENERATING SURPLUS OR PRO FIT MAKING WAS THE PREDOMINANT OBJECT OF ASSESSEE. ASSESSEE COMPANY WA S INCORPORATED WITH A SOLE ITA NO. 114/ AHD/2018 . A.Y. 2014-15 8 OBJECT TO COMPLY WITH DIRECTIONS OF HON'BLE HIGH CO URT OF GUJARAT IN A PIL FOR INDUSTRIES OF NARODA GIDC FOR ESTABLISHMENT IN RUNN ING OF COMMON EFFLUENT TREATMENT PLANT AND ITS STORAGE AND DISPOSAL FACILI TY AT ODHAV, AHMEDABAD. THE PROJECT WAS SETUP UNDER THE DIRECTIONS AND GUIDELIN ES OF HON'BLE HIGH COURT OF GUJARAT AND VARIOUS LOCAL AND STATE LEVEL AGENCIES VIZ. COLLECTOR, GIDC, AMC, GPCB, ETC. AS PER DIRECTIONS OF HON'BLE HIGH COURT OF GUJARAT, IT WAS SINE-QUA-NON FOR INDUSTRIAL UNITS TO BECOME MEMBER OF ASSESSEE C OMPANY FOR MEETING THE POLLUTION CONTROL PARAMETERS LAID DOWN BY GPCB. THE AMOUNT COLLECTED FROM THE MEMBERS VARIED DEPENDING UPON THE QUANTUM OF EFFLUE NT, NATURE OF EFFLUENT TO BE TREATED AS WELL AS OTHER FACTORS PERTAINING TO P OLLUTANT OF DIFFERENT KIND COMING FROM THE INDUSTRIAL UNITS. THUS, ASSESSEE IS ENGAGED IN THE ACTIVITY OF PRESERVATION OF ENVIRONMENT BY ABETMENT AND CONTROL LING POLLUTION OF ENVIRONMENT I.E. LAND, WATER AND AIR. FOR THIS OBJE CTIVE, ASSESSEE IS PROVIDING POLLUTION CONTROL TREATMENT FOR DISPOSAL OF LIQUID AND SOLID INDUSTRIAL WASTE. IT IS UNDISPUTED THAT ASSESSEE WAS INCORPORATED U/S. 25 O F THE COMPANIES ACT. ASSESSEE WAS DULY REGISTERED U/S. 12AA AND ALSO U/S . 80G(5) OF THE INCOME-TAX ACT. THE SAID CERTIFICATES WERE ISSUED AFTER DUE VE RIFICATION BY CONCERN AUTHORITIES. ASSESSING OFFICER HAS IGNORED MODIFIED OBJECTS OF ASSESSEE'S MOU AFTER ITS CONVERSION AS COMPANY U/S. 25 OF THE COMP ANIES ACT. THE PLAIN READING OF OBJECTS OF COMPANY REVEALS THAT MAIN OBJECT IS P ROTECTION OF ENVIRONMENT BY ABETMENT OF POLLUTION OF VARIOUS KINDS LIKE WATER, AIR, SOIL, ETC. IN THIS BACKGROUND, ACTIVITIES OF ASSESSEE COMPANY SQUARELY FALLS U/S. 2(15) OF THE INCOME-TAX ACT. THE PROVISO TO SECTION 2(15) IS APPLICABLE TO OBJECTS O F GENERAL PUBLIC UTILITY. THE SAME WAS ALSO CLARIFIED VIDE CBDT CIRCULAR NO. 11 DATED 19.12.2008. SINCE ASSESSEE COMPANY IS DIRECTLY ENGAGED IN PRESERVATION OF ENVI RONMENT 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 ASSE SSING OFFICER'S CONTENTION THAT ASSESSEE IS CARRYING OUT BUSINESS ACTIVITY AND IS I N 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 PRI VATE PROFIT OF SELLER. PROFIT MAKING IS NOT PREDOMINANT OBJECT OF ACTIVITY. UNDER THE FA CTS AND CIRCUMSTANCES, CIT(A) WAS JUSTIFIED IN HOLDING THAT ASSESSEE IS DOING CHA RITABLE ACTIVITY AS PER SECTION2(15) OF THE INCOME-TAX ACT, BENEFIT OF SECT ION 11 & 12 OF THE INCOME-TAX ACT IS AVAILABLE TO IT. ACCORDINGLY, CIT(A) WAS JUS TIFIED IN DIRECTING ASSESSING OFFICER TO TREAT THE ACTIVITY OF ASSESSEE COMPANY A S CHARITABLE AND FURTHER RIGHTLY DIRECTED TO DELETE THE ADDITION OF RS.2,53,21,438/- . THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPH OLD THE SAME. ITA NO. 114/ AHD/2018 . A.Y. 2014-15 9 5. IN THE RESULT, APPEAL FILED BY REVENUE IS DIS MISSED. 10. IN OUR CONSIDERED OPINION, LD. CIT(A) HAS GRANTED R ELIEF TO THE ASSESSEE ON THE BASIS OF PRINCIPLE OF CONSISTENCY AND FOLLOWING THE CO-ORDINATE BENCH ORDER. THUS, WE ARE NOT INCLINED TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A). HE HAS PASSED DETAILED AND REASONED ORDER. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON 27 - 11- 2019 SD/- SD/- (AMARJIT SINGH) (MAHAVIR PRASA D) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 27/11/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD