ITAT Grants Registration to Punjab Plastic Waste Management Society u/s 12A of Income Tax Act [Read Order]

The Chandigarh Bench of Income Tax Appellate Tribunal (ITAT) has granted registration to Panjab Plastic Waste Management Society which is formed with the main aims and objects to set up a mechanism for collection, transportation, treatment & disposal of plastic material under Section 12A of the Income Tax Act 1961.

The assessee, Punjab Plastic Waste Management Society was engaged in Plastic Waste Management covered under the limb of ‘Preservation of Environment’ as defined in Section 2(15) of the Income Tax Act, formed with the main aims and objects to set up a mechanism for collection, transportation, treatment & disposal of plastic material, especially multilayered plastic pouches, thermocol packing & utility items (polystyrene products) in environmentally sound and safe methods / technologies.

The Assessee has filed appeal as the Commissioner of Income Tax had erred in law as well as on facts in rejecting application for registration under Section 12AA of the Income Tax Act, observing that the assessee society was meant to be run as a one man show rather than public charity which was contrary to the facts on record and the activities of the assessee society were not charitable in nature but restrictive in nature.

Tej Mohan Singh who appeared on behalf of the assessee submitted that while wrongly rejecting the Assessee’s application for registration, the Income Tax Authority had referred to only a few clauses mentioned in the Assessee’s bye-laws and aims and objectives.

He further submitted that the revenue had further wrongly construed that all the powers were vested exclusively in the Punjab Pollution Control Board (PPCB), to be used at its sole discretion.

He also contented that while considering grant of registration to a charitable trust or institution, the Commissioner was supposed to examine whether the objects of the trust were charitable or not and where the genuineness of the activities of the trust or institution was not in doubt

Sarabjeet Singh, on behalf of the revenue contended that as rightly observed by the ld. Commissioner of Income Tax, it was clear from Clauses 5, 10, 11(i) and 14 of the Byelaws of the Assessee-society, that the powers mentioned therein are with the Punjab Pollution Control Board only; that from this, it was amply clear that the Assessee-society was merely a one man show without any public charity,

He further contended that Assessee society was not pursuing any charitable object for the public at large, but was restricted to the specific group of companies which were members of the Assessee society; and that other stated charitable objects were merely ostensibly charitable objects.

The two-member Bench of A.D. Jain, (Vice President) and Vikram Singh Yadav, (Accountant Member) observed that the objects of the Assessee society were charitable and the activities of the Assessee society were genuine, as provided under Section 12AA of the Income Tax Act.

The bench set aside the rejection of Assessee’s application dated 19.5.2019, filed in Form No. 10A for registration, holding that was erroneous and not sustainable in the eyes of law. Hence, the bench allowed the appeal filed by the assessee granting registration to the Assessee society.

To Read the full text of the Order CLICK HERE

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