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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 ..... within the meaning of section 2(15) of the Act, making it a ground of rejection of registration u/s 12A. 3. He further erred in concluding that the activity being carried out by the appellant could not be termed as any other objects of general public utility for the reasons that the trust has been formed for the specific persons who invested through stock exchange and not for general public and the object and contention is very clear that benefits are not open for general public at large. 4. He further erred in concluding that the appellant has violated the provisions of section 13(3) of the Act without appreciating the fact that the sitting fee and conveyance expenses paid to trustee for administering the trust and attending trust meeting are reasonable considering the service rendered by them and nature of payment and appellant has not violated the provisions of section 13(3) of the Act. 5. He further erred in concluding that the activities of the trust cannot be put to the test of genuiness without ascribing any reason for the same. 6. He failed to appreciate and ought to have held that: A. The trust is formed in pursuance of the guidelines/regulations issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are hereby reproduced as under:- "The submission putforth by the assessee has been perused, however, the same is not acceptable. Firstly the trust has mainly established for the protection, awareness and education of the investors of the Exchange and that the objects of the trust are not charitable but had shade of business ethics involved for creation of goodwill. Therefore, the activities of the assessee trust cannot be considered well within the meaning of Section 2(15) of the Act. Further, as the activity are being carried out could not been termed as any other object of general public utility at large. In nutshell the registration could not be granted merely because of the requirement of creation of fund under the provisions of Exchange. It can be also seen that stock exchanges who wished to take benefit of Section 11 of the Act and has to register itself as per the requirement of section 10(23EC) of the Act and it is not mandatory for institution to register itself under 12AA of the Act to reap squarely fell within the meaning of section 10(23EC) of the Act. The registration u/s 12AA of the Act could not be granted merely because of the requirement of creation of fund under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in which it has been specifically held that the where main object of the assessee Trust was to protect investor by way of creating a fund and fund created by the assessee was a public charitable fund having been set up to advance an object of general public utility, the assessee was entitled to grant registration u/s 12AA of the Act. In view of the said circumstances, the said ground is not liable to be considered as business activity which nowhere fall within the perview of the provision u/s 2(15) of the Act. The second ground for rejection of the application is that the activity of the Trust is not open for general public at large and registration is required to be given merely because of creation of fund under the provision of exchange. Now it is to be seen whether on this ground the application for the registration u/s 12AA is liable to be declined or not. On this issue the ITAT, Mumbai has also decided the matter of controversy in ITA. No.7922/M/2012 MCX Stock Exchange Investor Protection Fund Currency Derivatives Segment Trust Vs. DIT (Exemption) Mumbai dated 22.01.2014 The relevant finding of the said case is hereby reproduced as under:- "5. Having considered the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grant registration applied for. We decide accordingly." 7. As it is clear that the Co-ordinate Bench of Tribunal has decided the identical issue 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. Following the decision of the Co-ordinate Bench 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." 6. In view of the above said finding, we noticed that the Hon'ble ITAT Mumbai has passed the order on the basis of the order passed by the Hon'ble ITAT, Mumbai Bench in the case of Inter-Connected Stock Exchange Investors Protection Fund (supra). Accordingly, on this ground also the claim of the assessee for the registration u/s 12AA of the Act is also not liable to be declined. Now coming to the third ground for declining the application in which the authority declines the claim of the assessee on the ground of that the case of the assessee was squarely fall within the Section 10(23EC) of the Act and accordingly required to be regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with the payment of meeting fees to the trustees which is not liable to be considered at this stage of the registration of the Trust. In this regard, we are also find in support of the decision of the Hon'ble ITAT in the case of title as Kul Foundation Vs. Commissioner of Income-Tax-1, Pune (2015) 54 taxmann.com 143 (Pune Tribunal) and in the case of Ashoka Education Foundation Vs. Commissioner of Income Tax -1, Nasik (2015) 53 taxmann.com 436 (Pune Tribunal). It is specifically held that 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 Section13 of the Act. In view of the said circumstances 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). Therefore, we set aside the order in question and restored the application before the DCIT exemption to consider the same in view of the observation made above in accordance with law. Accordingly, appeal filed by the appellant is hereby ordered to be allowed. 8. In the result, the appeal filed by the assessee is hereby ordered to be allowed. Order pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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