TaxTMI 
TaxTMI 
2019 (12) TMI 1275
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....fter called as IPF)/Customer Protection Fund(hereinafter called as CPF) for stock exchanges in order to protect the investors interest. Accordingly, SEBI, has issued guidelines to all stock exchanges vide letter No.SMD/RCG/PJ/268/96 dated 19.01.1996 for setting up for IPF. In terms of the said direction given by the Ministry of Finance and SEBI, the National Stock Exchange Stock Exchange Investor Protection Fund Trust was set up on 11.07.1995 with an object of safeguarding the interest of the investors. The CBDT vide various notifications exempted the income of the appellant trust for A.Y. 1996-97 to A.Y. 2001- 02 under section 10(23C)(iv) of the Act. Therefore, the entire income of the Trust being the contribution received in terms of SEBI guidelines as well as income on investments was claimed as exempt under section 10(23C)(iv) of the Act. Subsequently, section 10(23EA) of the Act was inserted w.e.f. 01.04.2001 to exempt any income of IPF set up by the recognized stock exchange in India ,as the Central Government made, by notification in the official gazette, may specify in this behalf . The CBDT circular vide notification No.253 dated 29.11.2005 had I notified the appellant tru....
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....ot be treated as income of the assessee. The assessee replied vide letter dated 24.03.2014 submitting therein that the assessee has duly complied with the requirements of section 11(2) which is reproduced by the AO in para 11.1. However, the same did not find favour with the AO and AO observed that the section 11(2) clause (a) of the Act does not say that objects should be mentioned in the form No.10 but the purpose of accumulation is required to be mentioned and thereafter the AO relying upon certain decisions rejected the accumulation and treated the same as income during the year. In other words, the claim of the assessee was rejected primarily on the ground that the purpose of accumulation is not mentioned but the objects were mentioned in form 10. 4. In the appellate proceedings, the Ld. CIT(A) affirmed the order of AO on this ground after taking into consideration the submissions of the assessee by observing and holding as under: "In ground No. 2 of appeal the appellant has disputed denial of exemption u/s. 11(2) made by the AO on the ground that specific objects were not mentioned in Form No. 10. The appellant during the course of appellate proceedings has made same sub....
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....d under section 11(2) of the Act, as the same are for the charitable purposes. The Ld. A.R. relied heavily on a couple of decisions namely; 1. CIT(E) vs. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust 263 Taxman 247 (SC) 2. CIT(E) vs. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust 409 ITR 591(Guj HC) The Ld. A.R. submitted that the decision relied upon by the AO in the case of DIT(E) vs. Trustee of Singapore Charitable Trust (1993) 199 ITR 820 is not applicable to the facts of the instant case as in the assessee's case there was only one object as stated hereinabove whereas in the said decision the facts were different as there were multiple objects and the question of vagueness and ambiguity very much was there. The Ld. A.R. therefore prayed that the appeal of the assessee may kindly be allowed in view of the fact that the similar deduction has been allowed in the earlier years and also that there is no violation of provision of section 11(2) of the Act. 6. The Ld. D.R., on the other hand, relied on the order of Ld. CIT(A) by submitting that the section 11(2) of the Act specifically provides for specifying the purposes for which accumulation was....
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....rading members or a constituents, where a trading member being declared a defaulter on the stock exchange. To our opinion, this was the sole object of the trust for which this protection fund was created and thus sufficiently satisfy the requirements of section 11(2) of the Act. We also note that similar claim of the assessee has been allowed in the earlier years by the Revenue. The case of the assessee finds support from the decision of Hon'ble Supreme Court in the case of CIT(E) vs. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust (supra) wherein Hon'ble Supreme Court while dismissing the SLP filed by the Revenue upheld the order of the Hon'ble Gujarat High Court in which the Hon'ble High Court has held that non specification of purpose for which the funds were accumulated by assessee trust under section 11(2) would not be fatal to the exemption claimed. In the case of Bharat Kalyan Prathistan vs. DDIT(E) (Delhi HC) 299 ITR 406 the Hon'ble Delhi High Court has held that specification of certain purpose or purposes is needed for accumulations of the trust's income under section 11(2) of the Act however, the details of the purposes for which the income was accumulated ne....
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....ed that the interest under section 234C of the Act is to be charged on the returned income and not the assessed income and therefore the interest under section 234C has wrongly been charged by the AO. Accordingly, we direct the AO to charge interest under section 234C of the Act as per the provisions of the Act. The ground No.4 of the appeal is allowed for statistical purpose in the terms aforesaid. 13. The appeal of the assessee is partly allowed. ITA No. 2329/Mum/2016 14. The grounds raised by the Revenue are as under: "1. Whether on the facts of the case and in law, the Ld. CIT(A), Mumbai erred in allowing the exemption under 10(23EA) of the I.T. Act, even though the claim was not made by the assessee during the filing of return of income but as alternative at the appellate stage before CIT(A)? 2. The appellant prays that the order of the Commissioner of Income-Tax (Appeals) I, Mumbai be set aside and that the order of the Assessing Officer be restored" 15. At the outset, the Ld. counsel of the assessee submitted that issue is covered in favour of the assessee by the order of Hon'ble Bombay High Court in the case of DIT(E) vs. Exchange M/s. National Stock Investor ....