ACIT (Exemption) Vs Gujarat Enviormental Service (ITAT Ahmedabad)
Environmental Trust’s Contractual Receipts Held Charitable: ITAT Ahmedabad Upholds Section 11 Exemption
The Ahmedabad Bench of the ITAT dismissed the Revenue’s appeal and upheld the CIT(A)’s order granting exemption under Section 11 to a charitable trust engaged in environmental protection activities for AY 2023-24. The Assessing Officer had denied exemption on the ground that the trust’s receipts arose from contractual activities and were not income derived from property held under trust, thereby taxing the surplus as “Income from Other Sources.”
The Tribunal affirmed that the trust’s objects and activities squarely fall within “preservation of environment” under Section 2(15). It held that contractual receipts earned for maintenance of gardens, sanitation, composting and solid-waste management were incidental to and in furtherance of the charitable objects, carried out without any profit motive. Noting that the trust’s registration under Section 12A/12AB remained intact, there was no violation of Section 13, and the entire income was applied for charitable purposes, the ITAT followed binding precedents in the assessee’s own case for earlier years. Accordingly, it upheld the CIT(A)’s deletion of the addition and confirmed eligibility for exemption under Section 11.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
