Public Charitable Fund status confirmed where corpus arises from prescribed contributions; registration under section 12AA/12A granted.

The note addresses entitlement to registration under section 12AA read with section 12A for an assessee-trust created as an investor protection/indemnity fund. It applies coordinating Tribunal reasoning that trusts whose corpus is built by prescribed contributions (not by quid pro quo charges on individual investors) qualify as public charitable funds advancing objects of general public utility; mandatory/prescribed funding mechanisms do not convert the object into a commercial service or private benefit. Applying that principle, the trust meets the character of a public charitable fund and registration under section 12AA/12A is to be granted.

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Issues: Whether the assessee-trust is entitled to registration under section 12AA read with section 12A of the Income-tax Act, 1961 as a public charitable fund advancing an object of general public utility.

Analysis: The trust was constituted to create an investor protection/indemnity fund under Multi Commodity Exchange arrangements. Coordinating benches of the Tribunal have examined identical trust deeds and concluded that such investor protection funds, where corpus is built by prescribed contributions and not by quid pro quo charges on individual investors, qualify as public charitable funds advancing objects of general public utility. Those decisions held that mandatory or prescribed contributions by exchanges and related mechanisms do not convert the trust's object into a service for trade or a private benefit. Applying that reasoning to the present facts, the trust's objects and mechanism for building corpus align with the character of a public charitable fund, and the denial of registration under section 12AA/12A based on a supposed fit under section 10(23EA) or on non-mandatory registration is not tenable.

Conclusion: Registration under section 12AA read with section 12A of the Income-tax Act, 1961 is to be granted to the assessee-trust; the appeal is allowed in favour of the assessee.

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