2025 (2) TMI 607 - AT - Income Tax

Registration under section 12AB and 80G approval directed for society; waste management and public education held charitable

ITAT set aside the CIT(E)'s cryptic refusal and directed grant of registration u/s 12AB and approval u/s 80G to the assessee-society, holding its ... Rejection of registration u/sec.12AB and denial of approval u/sec.80G - no charitable purposes as activities of the trust were commercial in nature - HELD THAT:- 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, therefore, note that it is the fundamental duty of the every citizen of this great country 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. 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. 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. 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 - Decided in favour of assessee. The issues presented and considered in the judgment by the Appellate Tribunal ITAT Hyderabad are as follows:1. Whether the assessee's society qualifies for registration under section 12AB of the Income Tax Act, 1961.2. Whether the assessee's society is eligible for approval under section 80G of the Income Tax Act, 1961.Issue-wise detailed analysis:The Appellate Tribunal considered the facts of the case where the assessee, a trust named MAATI Foundation, was formed with the objective of promoting waste prevention, recycling, and environmental education. The trust applied for registration under section 12AB and approval under section 80G of the Income Tax Act, 1961. The CIT(E) rejected both applications, stating that the activities of the trust were commercial in nature and not in compliance with the relevant provisions.The tribunal heard arguments from both parties. The counsel for the assessee argued that the trust's activities were aimed at protecting the environment and involving public participation in waste management. The counsel contended that the CIT(E)'s decision was not based on the factual matrix of the case and should be overturned. On the other hand, the Departmental Representative (DR) supported the CIT(E)'s decision, emphasizing the lack of substantiating documents from the assessee.The tribunal found that the CIT(E) had issued vague orders without providing sufficient reasons for rejecting the applications. It acknowledged the importance of the trust's activities in educating the public and restoring ecological balance. The tribunal noted that it is the duty of every citizen to protect and improve the natural environment. Therefore, it directed the CIT(E) to grant registration under section 12AB and approval under section 80G to the trust. The tribunal emphasized the need to encourage such activities for the betterment of future generations and the preservation of the environment.Significant holdings:The tribunal held that the trust's activities align with the fundamental duty of citizens to protect the environment, as enshrined in the Constitution of India. It emphasized the importance of maintaining ecological balance and supporting initiatives that promote environmental sustainability. The tribunal concluded that the CIT(E)'s decision to reject the trust's applications was not justified, and therefore directed the granting of registration and approval under the relevant sections of the Income Tax Act, 1961.In conclusion, the Appellate Tribunal ITAT Hyderabad allowed the appeals of the assessee, directing the grant of registration and approval sought under sections 12AB and 80G of the Income Tax Act, 1961.