Case Law Details
CIT Vs Water And Land Management Training And Research Institute (Supreme Court of India)
Introduction: In a significant legal development, the Supreme Court of India has upheld the charitable status of the Water and Land Management Training and Research Institute (WLMTRI) under Section 12AA of the Income Tax Act. This decision confirms the organization’s dedication to carrying out charitable activities related to environmental conservation and land management. The court’s verdict is based on the grounds that the institution’s objectives align with the definition of charitable activities, as per Section 2(15) of the Income Tax Act, 1951.
The petitioner’s grievance revolved around the registration application filed by the WLMTRI, emphasizing its commitment to charitable activities aimed at safeguarding the environment. The organization’s objectives, as outlined in the impugned order, include:
1. Training government functionaries involved in water and land management within the Department of Irrigation and Command Area Development, as well as the Department of Agriculture.
2. Promoting efficient operational plans and principles.
3. Enhancing awareness among water users about optimal water and land resource utilization.
4. Serving as an apex body for matters related to water and land management and offering advice to the state.
5. Providing consultancy services and conducting intensive, need-based research on water and land management.
The respondent cited a three-Judge Bench Judgment in the case of “M/s. Ananda Social and Educational Trust Vs. The Commissioner of Income Tax.” This judgment clarified that the term ‘activities’ within Section 12AA encompasses both actual and proposed activities. In other words, the Commissioner must assess whether the trust’s objectives are genuinely charitable and whether the proposed activities align with these objectives.
In this specific case, the court determined that the Commissioner overseeing the WLMTRI’s registration as a charitable trust had overlooked the fact that the category in which the institute claimed charitable status is inherently charitable, and it doesn’t fall under the general public utility concern clause. Therefore, the impugned order was deemed to be erroneous.
Consequently, the Supreme Court upheld the impugned order, confirming the charitable status of the Water and Land Management Training and Research Institute. The court found no infirmity in the decision, and the special leave petition was dismissed. All pending applications were disposed of, solidifying the institute’s position as a charitable organization committed to environmental protection and sustainable land management.
Conclusion: The Supreme Court’s decision to uphold the charitable status of the Water and Land Management Training and Research Institute serves as a significant precedent in the realm of charitable organizations in India. It reiterates the importance of aligning objectives with charitable activities, emphasizing the institution’s dedication to environmental protection and sustainable land management. This legal verdict sets a crucial standard for similar cases in the future, ensuring that charitable organizations are genuinely contributing to the betterment of society and fulfilling their charitable objectives.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
The petitioner’s grievance is that the respondent’s application for registration under Section 12 AA of the Income Tax Act, as an institution carrying on charitable objects, falling within the definition of Section 2 (15) of the Income Tax Act,1951 in furtherance of the protection of the environment was allowed, as a result of the impugned order. The object of the assessee has been set out in the impugned order rejecting its application which are:
(a) To train different level Government functionaries of the Department of Irrigation and Command Area Development and the Department of Agriculture, dealing with aspects relating to water and land management in planning, designing, construction, and operation and maintenance of irrigation;
(b) Promote a full understanding of the principles of efficient operational plans;
(c) Provide a better understanding among the water users of the optimal use of water and land resources;
(d) To function as an apex body on all matters relating to water and land management and render advice to the State;
(e) Provide consultancy services to the State and undertake intensive and need-based research on water and land management.
The respondent relies upon a three-Judge Bench Judgment of this Court in “M/s. Ananda Social and Educational Trust Vs. The Commissioner of Income Tax” reported in (2020) 17 SCC 254, where it was observed:
“Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, we are of the view that the term ‘activities’ in the provision includes ‘proposed activities’. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of section 12AA of the Act. There the Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust.”
In the present case, the Court is of the opinion that the concerned Commissioner, overlooked the circumstance that the category within which the assessee claimed registration as a charitable trust, is considered to be “per se” a charitable object, and does not fall within the description of the residuary clause of a general public utility concern. The impugned order corrected the error.
The Court is of the opinion that there is no infirmity in the impugned order. The special leave petition is, accordingly, dismissed.
All pending applications are disposed of.
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