2016 (3) TMI 45

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....i (hereinafter referred to as ADIT (E) under section 143(3) dated 30th November, 2012 was erroneous and prejudicial to the interests of the revenue. 2. The CIT (E) erred in issuing order dated 30th March, 2015 cancelling the assessment made by ADIT (E) vide order dated 30th November, 2012 under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') 3. The CIT (E) erred in directing the ADIT (E) to redo assessment denovo in light of the observation made by him in his order dated so" March, 2015. 4. The CIT (E) erred in holding that the 1 st proviso to section 2 (15) of the Act applied to the appellant Trust. 5. The CIT (E) erred in holding that the activity of the appellant Trust does not fall under 'the preservation of environment' limb under section 2(15) of the Act. 6. The CIT (E) erred in holding that the entire profit arises out of the activity of solid waste management. 7. The CIT (E) erred in holding that the predominant activity of the appellant trust is commercial in nature''. 3. The Brief facts of the case are that the assessee is a trust registered u/s.12A by Director of In....

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....receipts the assessee claimed various expenses which inter alia included the following:- (i) Awareness Expenses : Rs. 13,07,517/- (ii) Project Management Expenses : Rs. 50,11,379/- (iii) Site/ Shed Expenses : Rs. 1,12,37,398/-   The assessee has received the sum after entering into a work contract agreement and upon perusal of clauses of trust deed, the ld.CIT(E) is of the opinion that they are general in nature. At the time of hearing Managing Trustee Mrs. Mangalam Balasubramanian appeared and submitted that the Assessing Officer has passed the assessment order after proper examination and is not prejudicial to the interest of Revenue. The objects of the trust fall within the meaning of charitable purpose, not in residual clause of advancement of any other object of public utility and further submitted that the civic objective of the trust comes under the provisions of Sec2(15) of the Act i.e. Preservation of environment including watersheds, forest and wildlife and preservation of monuments or places or objects of artistic or historic interest. The trust also study on promotion of animal and bird welfare and the objects of the trust ....

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....and the purpose of working. The ld. Authorised Representative explained that as per the prerequisites the tender was entered for solid waste management system at Kalpakkam and Anupuram and the clauses and conditions of tender are very clear. The main object of the trust being solid waste management and other clauses also fall under definition charitable purpose u/s.2(15) of the Act. The only grievance of the CIT(E) being that the assessee trust activities are commercial activities. The ld. Authorised Representative filed statement of income from the date of inception to the latest for the year 2014 to show that trust is working effectively in the solid waste management projects and profit motive is not predominant objective and the main object being service objective and also produced appreciations from Government authorities, photographs, media coverage's and supported the arguments. The Income Tax Department has not disputed operation of the trust for earlier years and only for this year on the technicalities treated activities not covered u/s.2(15) of the Act and main objective is cleaning the cities, municipalities for the purpose of working, trust allotted contracts from organ....

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....he common cause of the society and welfare of the citizen under the banner of clean environment. For the purpose of big contributions the assessee trust as per the requisite applied for tenders not on commercial note but on social responsibility and if any profit is made out of the such activities they are incidental as the predominant objective being only solid waste management works. The ld. Authorised Representative vehemently argued that in compliance with Swatch Bharath Programme of Prime Minister of India Shri. Narendra Modi, the trust is working hard with its objective of cleaning. On perusal of the photographs and apprehension letters they conducted various awareness programmes and removed garbages and making environment clean and tide. In other words, it is a service to the humanity. Citizens of the society are benefited through clean environment and saved from diseases. The ld.AR relied on the decision of Ahmadabad Tribunal in the case of Deputy Director of Income Tax (E) Vs. Naroda Enviroprojects Ltd (2015) 43CCH 84 where similar activities fall under definition of Sec.2(15) of the Charitable purpose Act and also submitted that surplus is incidental to the main object. W....