2014 (1) TMI 1839 - AT - Income Tax

Registration u/s 12A eligibility - proof of charitable activities - Held that - Decided in favour of the assessee by holding that the assessee is a public charitable fund, set up to advance an object of general public utility and therefore, the registration u/s 12A has been wrongly denied by the authority. We set aside the impugned order of the DIT(Exemption) with the direction to grant registration u/s 12A of the Income Tax Act to the assessee. See Interconnected Stock Exchange Investors Protection Fund Vs DIT(2013 (10) TMI 1134 - ITAT MUMBAI ) - Decided in favour of assessee

Summary

Issues involved:
Registration u/s 12A rejected by DIT(Exemption) - Trust formed by a recognized Stock Exchange - Object of Investor Protection Fund - Application for registration u/s 12A rejected - Identical issue considered by Co-ordinate Bench - Grounds for rejection - Activity not for general public utility - Trust not charitable institution - Decision of Co-ordinate Bench - Trust deed clarifies misgivings - Fund set up for general public utility - Registration wrongly denied - Appeal allowed.

Detailed Analysis:

1. Registration u/s 12A Rejected: The judgment deals with an appeal against the rejection of registration u/s 12A of the Income Tax Act by the DIT(Exemption). The trust in question was formed by a recognized Stock Exchange with the objective of setting up an Investor Protection Fund.

2. Object of Investor Protection Fund: The Investor Protection Fund was established to compensate investors who suffer losses due to Defaulter Members, provide education and training to investors, promote awareness, and conduct research on investor protection and related subjects.

3. Identical Issue Considered by Co-ordinate Bench: The appellant argued that a similar issue had been addressed by a Co-ordinate Bench of the Tribunal in a previous case. The grounds for rejection included the activity not being for general public utility and the trust not qualifying as a charitable institution.

4. Decision of Co-ordinate Bench: The Co-ordinate Bench had analyzed the trust deed and concluded that the fund was indeed set up for general public utility. The Bench found that the fund's objectives aligned with charitable purposes and directed the authorities to grant registration u/s 12A.

5. Conclusion: The judgment ultimately allowed the appeal, setting aside the order of the DIT(Exemption) and directing the grant of registration u/s 12A to the assessee. The decision was based on the Co-ordinate Bench's ruling that the fund was a public charitable fund serving general public utility.

This detailed analysis highlights the key issues, arguments presented, the Co-ordinate Bench's decision, and the final outcome of the appeal, providing a comprehensive understanding of the legal judgment.