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2024 (1) TMI 790 - ITAT MUMBAIValidity of exemption u/s 10(23D) - offshore fund scheme maintained by the assessee - Exemption denied for the reason that there was no Certificate of Registration from SEBI as per the requirement of the Act - HELD THAT:- We observe from the record submitted that the erstwhile Unit Trust of India which is an investment body under the Unit Trust of India Act of 1963 and it was having the authority to launch various unit schemes under section 21 of the Unit Trust of India Act 1963. Under this authority it was also permitted to launch for investment by persons resident outside India, with that authority UTI India Fund Unit Scheme 1986 (assessee) was launched which is one of the approved scheme under the Unit Trust of India Act, 1963 especially for investments by persons resident outside India and this scheme was launched to augment the offshore funds. Therefore, it is required to register for a separate PAN to facilitate foreign remittance. It is important to note that these offshore funds were approved by Central Government as well as Reserve Bank of India and the income earned therefrom was always exempt and so pursuant to the provisions of section 32 Unit Trust of India Act, 1963. SEBI was established as a statutory body in the year 1992 which came into force on 30th January, 1992. After establishment of SEBI, all the securities came under the regulations formulated by SEBI. Subsequently, UTI Act 1963 was repealed by the Government of India by The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002. We observe that after Repeal Act, specified company was formed by State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India subscribing in equal proportion to the share capital of the specified company namely UTI Trustee Company Private Limited, a company under The Companies Act, 1956. Pursuant to the above restructuring of the UTI, all the Schemes of the UTI were transferred to above mentioned two successors with effect from 01st February, 2003. The Schemes listed in the Schedule I of the Repeal Act were transferred to and vested in the SUUTI and the Schemes listed in Schedule II of the Repeal Act were transferred to and vested in the UTI Mutual Fund. Assessee fund is one of the schemes listed in Schedule II (Sr. No. 37) of the Repeal Act and vested with UTI Mutual Fund. With the above restructuring of the Act and since assessee was established to cater to the offshore funds it retained its identity separately from the other schemes and maintained separate books of accounts and continued with the same PAN. The assessee is registered under the various schemes listed in Schedule II of the UTI Mutual Fund which is listed at Sl.No. 37 shows that assessee’s scheme is one of the scheme approved by the SEBI and it need not have to have a separate registration by the SEBI. It is enough that the SEBI approves all the schemes equally under the Schedule II of the list which is vested with UTI Mutual Fund. Therefore, the observation of the Assessing Officer in order to grant exemption under section 10(23D) has to have a separate registration is uncalled for and the various documents submitted by the assessee proves that the offshore fund scheme maintained by the assessee is an approved unit by the SEBI. Therefore, we do not see any reason to interfere with the findings of the Ld. CIT(A). Accordingly, appeal filed by the revenue is dismissed.
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