Plastic Waste Management Falls Under Preservation Of Environment: ITAT Allows Income Tax Exemption

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the Income Tax exemption for the Punjab Plastic Waste Management Society and observed that plastic waste management falls under the preservation of the environment.

The bench of A.D. Jain (Vice President) And Vikram Singh Yadav (Accountant Member) has quashed the order of the Commissioner of Income Tax (Exemptions) against the Punjab Plastic Waste Management Society, by which the Society’s application under Section 12A for grant of registration as a Charitable organisation was rejected.

The appellant/assessee, Punjab Plastic Waste Management Society, is engaged in Plastic Waste Management covered under the limb of ‘Preservation of Environment’ as defined in Section 2(15). The Assessee Society was formed with the main aims and objectives of setting up a mechanism for the collection, transportation, treatment, and disposal of plastic material, especially multilayered plastic pouches, thermacol packing, and utility items (polystyrene products), in environmentally sound and safe methods.

The Assessee had appealed the CIT's decision to deny the Society's application for registration under Section 12A of the Income Tax Act of 1961, which was submitted electronically on March 29, 2019, in Form No. 10A, and requested an exemption from submitting income taxes.

The CIT(E) held that, prima facie, it appears that none of the activities falls under any of the definitions of "charitable purpose" set forth in Section 2(15) of the Income Tax Act of 1961. The public cannot be guaranteed to profit from these activities because they would be limited to a particular number of businesses. In the absence of activities meant for the public at large, there is no way the genuineness of the activities of the society can be corroborated with the stated aims and objectives as per the documents submitted by the applicant. CIT (Exemptions) rejected the application under Section 12A for a grant of registration.

The ITAT held that Section 2(15) of the Income Tax Act provides for the preservation of our environment for a charitable purpose. The action-oriented towards the preservation, saving, and conservation of our environment has been construed and held by the legislature to be a charitable action.

The ITAT held that not only one but all the objectives of the assessee Society are directly covered by the limb of preservation of the environment as a charitable Purpose’ under the provisions of Section 2(15) of the Income Tax Act.

Case Title: Punjab Plastic Waste Management Society Versus CIT(E)

Case No.: ITA No. 17/CHD/2020

Date: 14.07.2023

Counsel For Appellant: Tej Mohan Singh

Counsel For Respondent: Sarabjeet Singh

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