Charitable Trust Promoting EVs Eligible for Sections 12AA and 80G | ITAT

Case Details: Rasha Welfare Foundation v. Commissioner of Income-tax - [2025] 176 taxmann.com 286 (Delhi-Trib.)

Judiciary and Counsel Details

• Ms Madhumita Roy, Judicial Member & Naveen Chandra, Accountant Member
• Anupam & Sanjeet Paliwal, Advs. for the Appellant.
• Monika Singh, CIT-DR for the Respondent.

Facts of the Case

The assessee was a public charitable trust duly registered under the Indian Trusts Act, 1882. The object of the trust was to promote environmental sustainability by encouraging the use of electric vehicles, reducing carbon emissions, and supporting scalable and climate-resilient transportation solutions as part of its CSR vision.

The Commissioner (Exemptions) denied the grant of registration under sections 12AA and 80G, stating that the rental activity of the assessee showed it to be commercial in nature and that the assessee was engaged in commercial activities. The matter reached the Delhi Tribunal.

ITAT Held

The Tribunal held that the activities of the assessee are charitable and have been undertaken professionally, with each activity governed by agreements entered into with various parties, including the beneficiaries, to ensure that the desired activities are performed and accomplished, from raising funds to the deployment of funds. Furthermore, at this juncture, the revenue is only required to examine the genuineness of the trust’s activities and its compliance with any other applicable law.

The Apex Court in the case of Additional Commissioner of Income Tax, Gujarat, Ahmedabad v. Surat Art Silk Cloth Manufacturers Association Surat [1979] 2 Taxman 501/[1978] 121 ITR 1 (SC) has held that the dominant object of the trust is charitable and mere existence of profit cannot negate charitable status as long as the profits are applied solely for the purpose of the charitable object and not distributed among members. The present case squarely falls within the ambit of the ratio of this judgment.

List of Cases Reviewed

• Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1979] 2 Taxman 501/[1978] 121 ITR 1 (SC) [Para 15] – followed

List of Cases Referred to

• Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1979] 2 Taxman 501/[1978] 121 ITR 1 (SC) (para 8).