Preservation of Environment is charitable Activity eligible for Sec. 11(1)(a) exemption

Present two appeals are directed at the instance of Revenue against separate orders of ld.CIT(A)-2, Vadodara dated 26.2.2015 and 13.5.2015 passed for Asst. Years 2010-11 and 2011-12 respectively.

2. Revenue has taken four grounds of appeal in the Asst. Year 2010-11 and three grounds of appeal in the Asst. Year 2011-12. However, its grievance in both years revolves around a single issue viz. whether the assessee is entitled for benefit of section 1 1(1)(a) of the Income Tax Act, 1961 or not.

3. Brief facts of the case are that the assessee has filed its return of income 24.9.2010 and 23.9.2011 declaring total income at NIL in the Asst. Years 2010-11 and 2011-12 respectively. The assessee is a Society registered under Society Registration Act, 1860. It was granted registration under section 12(A)(a) of the Income Tax Act w.e.f. 1.6.1984. Main objects of the assessee have been reproduced by the ld.First Appellate Authority in its finding recorded in the Asst. Year 2010-11. I will be reverting to that finding in the later part of this order, but it is pertinent to mention that all along in the past the assessee was granted benefit under section 11 of the Income Tax Act. The AO has denied this benefit to the assessee on account of amendment carried out in section 2(15) of the Income Tax Act which provides definition of “charitable purpose”. According to the AO a proviso was inserted in section 2(15) by way of Finance Act (2) 2009. The AO was of the opinion that activities of the assessee is in the nature of business, and therefore, it is not entitled for exemption under section 11(1)(a) of the Act. He assessed taxable income of the assessee in the Asst. Year 2010-11 at Rs. 43,07,960/- and Rs. 41,32,020/- in the Asst. Year 2011-12.

4. The order passed in the Asst. Year 2010-11 has been followed in the Year 2011-12 because there is no disparity on facts.

5. I have heard ld.representatives and perused records. I find that the CIT(A) has made a lucid analysis of the facts and law, therefore, I deem it pertinent to take note of finding recorded by the ld.CIT(A) in the Asst. Year 2010-11, which reads as under:

“4.3. I have considered the facts of the case, the AO’s observations and submission made by the AR of the appellant. From the submissions and documents furnished by the appellant, it is seen that the appellant society was established by representatives of several institutional organizations with following main objectives:

To fulfill the Main object of Preservation of environment the society undertakes various activities, which are as under: