Sec. 12AB Registration Denied For Captive Solar Plant

Case Details: Infosys Green Forum vs. Income-tax Officer (Exemptions) - [2026] 182 taxmann.com 242 (Bangalore - Trib.)

Judiciary and Counsel Details

Prashant Maharishi, Vice President
Keshav Dubey, Judicial Member
Manish Kanth, Adv. & Porus Kaka, Sr. Adv. for the Appellant.
Shivanand Kalakeri, CIT(DR)(ITAT) for the Respondent.

Facts of the Case

Assessee-Infosys Green Forum was a Section 8 company. It was incorporated to promote commerce, art, science, sports, education, research, social welfare, religion, charity, or the protection of the environment, or any other object. The company was formed to undertake the corporate social responsibility (CSR) activities on behalf of Infosys Limited, pursuant to the amendment to Rule 7(4) of the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The company was set up to generate clean and green solar power. It was a non-profit company and was entitled to supply power to its 100% shareholder (Infosys Ltd.) at an agreed-upon rate. The company applied for registration under section 12AB of the Act.

The CIT(E) rejected the assessee’s application for registration under section 12AB of the Act. Aggrieved by the order, the assessee filed an appeal to the Bangalore Tribunal.

Tribunal Held

The Tribunal held that the assessee was set up to generate power for its 100% shareholder (Infosys Ltd.) only. There was no benefit to the public at large or a section of the public at all. The dominant object of the whole of the exercise is to get the power for Infosys Limited through captive solar power plant shown as CSR activity and then made an attempt to claim the benefit of section 11, 12 of the Income tax Act by obtaining registration under section 12AB of The Act and further to obtain recognition under section 80G(5) of the Act.

Assessee’s case was not different from the case that a donor sets up a school for his own children and claims it as ‘Educational activity’, a company setting up a hospital exclusively for its own promoters/employees and claiming it as medical relief, setting up its own yoga centre for itself and claiming it as ‘Yoga’, etc. In all these cases, there was no public benefit.

Further, the Hon’ble Supreme Court in CIT v. Dawoodi Bohara Jamat [2014] 43 taxmann.com 243 (SC) has held that the word ‘charity’ connotes altruism in thought and action and involves an idea of benefiting others rather than oneself. It cannot be said that a purpose would cease to be charitable even when public welfare is intended to be served.

Therefore, the CIT(E) ‘s order was upheld, and the assessee’s appeal was dismissed.

List of Cases Referred to

CIT (Exemption) v. Indian Trade Promotion Organisation [2023] 152 taxmann.com 491 (SC)/[2023] 294 Taxman 1 (SC)/[2023] 454 ITR 799 (SC) (para 11)
Huhtamaki Foundation v. CIT (Exemption) [2024] 163 taxmann.com 174 (Mumbai – Trib.) (para 11)
CIT v. Naroda Enviro Projects Ltd. [2020] 118 taxmann.com 378 (Gujarat)/[2019] 419 ITR 482 (Gujarat) (para 11)
CIT (Exemptions) v. Water & Land Management Training & Research Institute [2017] 83 taxmann.com 234 (Andhra Pradesh and Telangana)/[2017] 398 ITR 283 (Andhra Pradesh and Telangana) (para 11)
CIT (Exemption) v. Water & Land Management Training & Research Institute [2023] 156 taxmann.com 193 (SC)/[2023] 295 Taxman 753 (SC)/[2024] 461 ITR 1 (SC) (para 11)
Punjab Heritage & Tourism Promotion Board v. CIT (Exemptions) [2025] 179 taxmann.com 259 (Chandigarh – Trib.) (para 11)
City Hospital Charitable Trust v. CIT (Exemptions) [2025] 175 taxmann.com 716 (Bangalore – Trib.)/[2025] 213 ITD 399 (Bangalore – Trib.) (para 11)
Punjab Plastic Waste Management Society v. CIT(E) [IT Appeal No. 17 (Chandigarh) of 2020, dated 14-7-2023] (para 11)
CIT v. Dawoodi Bohara Jamat [2014] 43 taxmann.com 243 (SC)/[2014] 222 Taxman 228 (SC)/[2014] 364 ITR 31 (SC) (para 30).