MAATI FOUNDATION,RANGA REDDY V. COMMISSIONER OF INCOME TAX (EXEMPTION), HYDERABAD

ITA 1294/HYD/2024

AI Insights

Maati Foundation, a trust focused on environmental protection and waste management, applied for registration under section 12AB and approval under section 80G of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption) initially rejected these applications, citing that the foundation's activities were of a 'commercial' nature and did not meet the requirements of the sections. The Tribunal, however, found that the foundation's activities were in public interest and aimed at ecological balance, thus meriting the registration and approval sought. The Tribunal criticized the CIT(E) for the lack of detailed reasoning in the rejection and directed that the foundation be granted the requested registration and approval.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23082 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.BALAKRISHNA
• Assessee Lawyers: PANKAJ SANCHETI
• Section: 80G

Judgement Text

" 1 ITA.Nos.1294 & 1295/Hyd./2024 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH : HYDERABAD BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA.Nos.1294 & 1295/Hyd/2024 [U/sec.12AB and U/sec.80G of the Income Tax Act, 1961] Maati Foundation, A-508, Aparna Cyber Commune, Nallagandla, Seriingampally, Ranga Reddy District. PIN – 500 019. Telangana. PAN AASAM9016B vs. The Commissioner of Income Tax (Exemption), Opposite LB Stadium, Aaykar Bhavan, Hyderabad – 500004. State of Telangana. (Appellants) (Respondent) For Assessee : CA Pankaj Sancheti For Revenue : Shri B. Bala Krishna, CIT-DR Date of Hearing : 13.02.2025 Date of Pronouncement : 13.02.2025 ORDER PER G. MANJUNATHA, A.M. : These assessee’s twin appeals ITA.Nos.1294 & 1295/Hyd./2024 are directed against the orders both dated 24.10.2024 of the learned CIT(E), Hyderabad in rejecting the registration u/sec.12AB of the and approval u/sec.80G of the Income Tax Act, 1961 [in short “the Act”], respectively. 2 ITA.Nos.1294 & 1295/Hyd./2024 Since common issues are involved in both these appeals, these appeals were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity. 2. Facts of the case, in brief, are that the assessee is a trust under and name and style of MAATI Foundation formed on 07.07.2023 and registered with Registrar of Societies. The objectives of the Society are that to promote the movement focused on waste prevention and reduction with global impact, support recycling and waste minimization approaches to ensure products are reused, repaired or recycled, redesign industrial systems into circular models based on Nature’s strategies, create jobs through waste-based business opportunities, implement waste reduction, recycling and environmental education programs to support sustainable communities, enhance public participation in material reduction and recovery programs and undertake all necessary activities to achieve these objects. 3 ITA.Nos.1294 & 1295/Hyd./2024 2.2. It filed an application in the prescribed Form No.10AB seeking for registration of the society u/sec.12AB of the Act. The learned CIT(E) called for certain information with respect to cash flow statement indicated in the objectives of clause, copy of latest three months GST returns, list of donors in respect of it’s 80G claim and documentary evidences with regard to expenditure incurred for the objections as per the Trust Deed/MOA. The assessee society has filed it’s reply. The learned CIT(E) after considering the submissions of the assessee society noted that the activities of the assessee society are of commercial in nature and in violation of the provisions of sec.12AB of the Act and accordingly rejected the registration u/sec.12AB of the Act. Similar and identical observations were while denying the approval u/sec.80G of the Act by the learned CIT(A). 3. During the course of hearing, Learned Counsel for the Assessee submitted that the assessee society has been formed with an avowed object to protect and preserve the environment while minimizing the wastage by reusing it 4 ITA.Nos.1294 & 1295/Hyd./2024 so that the future generations shall enjoy a clean environment and for this avowed object, the assessee society involving public participation too by conducting various programmes. The assessee-society is striving to achieve it’s objects. However, the learned CIT(E) noted that the activities of the assessee society are of “commercial” nature. He submitted that the order of the learned CIT(E) is not based on the factual matrix of the case and, therefore, not sustainable in the eye of law. He pleaded that assessee society shall be encouraged in the interest of nature as it is working on restoration of ecological balance. He accordingly submitted that the learned CIT(E) be directed to grant registration u/sec.12AB and approval u/sec.80G of the Act. 4. The Learned DR on the other hand strongly relied on the orders of the learned CIT(E) in rejecting the application of the assessee-society for registration u/sec.12AB and denial of approval u/sec.80G of the Act. He submitted that that the orders of the learned CIT(E) be confirmed as the assessee society failed to substantiate it’s 5 ITA.Nos.1294 & 1295/Hyd./2024 case by filing requisite documents as called for by the learned CIT(E). 5. We have heard the rival submissions of both the parties, perused the objects of the trust and the orders of the learned CIT(E) in the instant appeals. We find that the learned CIT(E) had passed cryptic orders without giving cogent reasons while rejecting the application for registration u/sec.12AB and denial of approval u/sec.80G of the Act. It is an admitted fact that the assessee-society is educating and involving public participation in waste management so that by collective participation of the public at large, the ecological balance could be restored, which is an avowed object to pass-on a clean environment for the future generations. We all know well that our environment is badly effected due to vast technological development of the society in all sectors and thereby, the public life has become at ease in all walks of life and equally we are damaging/spoiling the mother earth by dumping the waste products into the earth. We, therefore, note that it is the fundamental duty of the every citizen of this great country 6 ITA.Nos.1294 & 1295/Hyd./2024 as enshrined under Article 51A of the Constitution of India to protect and improve the natural environment including various lakes, rivers and wild life and other living creatures living on the mother earth. The assessee-society is discharging it’s fundamental duty as a citizen of this country. Therefore, this kind of activities taken-up by a society like the one before us, shall be encouraged in true letter and spirit. We find that the learned CIT(E) did not doubt the genuineness of the activities of the assessee society. We, therefore, find no merit in the orders of the learned CIT(E) by passing a cryptic order while rejecting the application for registration u/sec.12AB and denying approval u/sec.80G of the Act. We accordingly, in the interest of justice and to maintain ecological balance for betterment of our future generations at large which is the primary duty of every human being living on the earth, direct the learned CIT(E) to grant registration u/sec.12AB and approval u/sec.80G of the Act. Accordingly, the grounds raised by the assessee in these twin appeals are allowed. 7 ITA.Nos.1294 & 1295/Hyd./2024 6. In the result, appeals ITA.Nos.1294 & 1295/Hyd/ 2024 of the assessee are allowed. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 13.02.2025. Sd/- Sd/- [LALIET KUMAR] [G.MANJUNATHA] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Date 13th February, 2025 VBP Copy to 1. The appellant 2. The respondent 3. The CIT, Hyderabad concerned 4. The DR ITAT ‘A” Bench, Hyderabad 5. Guard File //By Order// //True Copy// Sr. Private Secretary : ITAT : Hyderabad Benches, Hyderabad. "