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TMI Blog2018 (4) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... ned on the ground of the registration u/s 10(23EC) of the Act. At the time of registration of the Trust, the claim of the assessee is not liable to be declined in view of the provision of Section 13 of the Act. We are of the view that the claim of the assessee for the registration u/s 12A of the Act has wrongly been rejected by the Director of Income-tax (Exemption). - Decided in favour of assessee. - I.T.A. No.6580/Mum/2014 - - - Dated:- 28-3-2018 - SHRI G.S. PANNU, AM AND SHRI AMARJIT SINGH, JM For The Revenue : Shri R. P. Meena (CIT DR) For The Assessee : Shri Chetan Kakka (AR) ORDER PER AMARJIT SINGH, JM: The Assessee has filed the present appeal against the order dated 30.09.2014, passed by the Director of Income- Tax (Exemption), 6th Floor, Piramal Chambers, Parel, Mumbai- 400012 in which the application moved by the appellant u/s 12A of the Act has been ordered to be rejected. 2. The appellant has raised the following grounds:- 1. Director of Income Tax(Exemption) hereinafter referred as DIT(E) erred in rejecting the application for registration u/s 12AA of the Income tax Act, 1961 ignoring all merits of the case. 2. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also eligible to claim exemption us/ 10(23(EC) cannot be a ground to reject the application for registration u/s 12AA of the Act. f. having regard to the accounts and detailed submissions made by the appellant, the appellant has clearly established that it has not violated the provisions of section 13(3) of the Act as payments made to trustees are in the nature of sitting fees and not in the nature of salary, allowance, etc. Even if it is assumed that they are in the nature of salary, allowance, etc., they are not unreasonable to attract the violation of section 13(3) of the Act. 7. The appellant prays that the DIT(E) be directed to grant certificate of registration u/s 12AA of the Act to the appellant. 3. The brief facts of the case are that the appellant filed an application for registration u/s 12AA of the I.T. Act, 1961 in the prescribed Form No. 10A on 25.03.2014. The appellant trust was constituted by a Trust Deed dated 26.04.2012. The Trust was registered with the Charity Commissioner Mumbai on 06.03.2013 vide registration No. F-29431 (Mumbai). After filing the application before the Director of Income-tax Exemption, Mumbai, the object of the Trust was ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act, 1961. 7. After considering the submissions of the assessee, it appears that the activity as being carried out could not be termed as any other object of general public utility for simple reason that it was meant for the benefit of specific person who are the members and employees of the trust and not for general public. 4. On the basis of the above said reasons the application for registration of the Trust u/s 12AA was dismissed. Therefore, the assessee has filed the present appellant before us. 5. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. Basically, the Trust has been established for the protection, awareness and education of the investor of the exchange. The object of the Trust has been duly being recorded in the Trust deed dated 26.04.2012 which lies at page no. 3 to 12 of the paper book. The first ground which has been considered by the Director Income-Tax (Exemption), Mumbai for declining the claim of the assessee for registration is that the Trust has mainly established for the protection, awareness and education of the investor of the exchange and the said object was not found charitable bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d would allay all such misgiving/s or inference/s, and, in our clear view there is no scope for taking any such view. Firstly, as a condition for an eligible claim, the relevant member of the stock exchange is to be declared as a defaulter following the prescribed procedure. Two, the corpus of the fund is to be built through, inter alia, share of listing fees, interest on 1% listing deposit, paid and kept by the issuer companies with the ITA No.7922/M/2011 MCX Stock Exchange Investors Protection Fund Currency Derivatives Segment Trust 4 respective stock exchanges. An individual member of a particular member stock exchange is not called upon to pay any direct charges to the applicant fund. In fact, a part of the auction money of the defaulting money is also, in terms of the SEBI circular (FITTC/FII/02/2002 dated 15.05.2002), made over to the corpus of the fund. Accordingly, the object of the applicant cannot be as a service in relation to any trade, etc. Further, even assuming so, the same does not involve any consideration inasmuch as no quid pro quo can be attributed to the mandatory contributions to the fund by the participating stock exchanges. In our considered view, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... listing deposit, paid and kept by the issuer companies with the respective stock exchanges. An individual member of a particular member stock exchange is not called upon to pay any direct charges to the applicant fund. In fact, a part of the auction money of the defaulting money is also, in terms of the SEBI circular (FITTC/FII/02/2002 dated 15.05.2002), made over to the corpus of the fund. Accordingly, the object of the applicant cannot be as a service in relation to any trade, etc. Further, even assuming so, the same does not involve any consideration inasmuch as no quid pro quo can be attributed to the mandatory contributions to the fund by the participating stock exchanges. In our considered view, therefore, the applicant fund is a public charitable fund, set up to advance an object of 6552/13NCDEX 3 general public utility, and has been wrongly denied registration as one by the Revenue. We, accordingly, vacating the findings of the competent authority vide the impugned order, direct it to grant registration applied for. We decide accordingly. Respecfully, following the above decision, we decide effective ground of appeal in favour of the assessee-trust and direct the DIT-E to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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