TMI Blog2010 (12) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit of sec.11 and sec.12 of the Act despite the order passed by the Central Board of Direct Taxes on behalf of the Central Government under sec.10[23C][iv] of the Act holding that the assessee is not an organization engaged in charitable purposes? 2. Since a common question of law is involved in all these appeals which arise out of a consolidated order passed by the Tribunal and the parties are also common, the appeals were taken up for hearing together and are disposed of by this common judgment. 3. The assessee, a Trust, has been constituted as a public charitable trust under a deed of trust executed on 27 th February, 1942. The assessee has been recognized as a Recognized Stock Exchange under section 3 of the Securities, Contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order of the Tribunal, it was submitted that the Tribunal has allowed the appeal on the ground that once registration had been granted under section 12A of the Act, it was beyond the province of the Assessing Officer to reject the claim of exemption under section 11 of the Act by looking at the objects of the association and holding the same as noncharitable in nature. Inviting attention to the provisions of section 10(23C((iv) of the Act, it was submitted that the same pertains to incomes which do not form part of the total income. It was submitted that non-grant of exemption under section 10(23C)(iv) of the Act, is not in any manner relevant for the purpose of considering grant of benefit under sections 11 and 12 of the Act, and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals). Neither was such a contention raised before the Tribunal by the revenue. The main grounds on which exemption under section 11 of the Act had been denied by the Assessing Officer and the Commissioner (Appeals) is that there is no restrictive provision in the trust deed prohibiting the institution from the distribution of profits to the members and that in the absence of such provision exemption under section 11 of the Act cannot be allowed. The question as formulated at the time of admission of the appeal, therefore, does not arise out of the impugned order of the Tribunal. In the circumstances, by resorting to the provisions of sub-section (4) of section 260A of the Act, the substantial question of law as framed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own in the aforesaid decisions, the question formulated is required to be answered in the affirmative and the appeal deserves to be dismissed. 10. The fact that the assessee was granted registration under section 12A of the Act is not in dispute. The Tribunal after going through the Rules and Bye-laws of the assessee Association has taken note of the fact that the assessee is a Recognised Stock Exchange and has been constituted for the purpose of developing the stock market. The basic objective of the stock market falls within the ambit of charitable purpose as defined under section 2(15) of the Act and is clearly covered as a charitable object for the purpose of exemption of income under section 11 of the Act. After appreciating the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been applied for the objects of the institution and the statutory conditions contained u/s.11 to 13 are fulfilled by the assessee. In our opinion, it is beyond the province of the AO to reject the claim of exemption u/s.11 by looking into the objects of the Association and holding the same as noncharitable in nature. 11. This High Court in the case of Hiralal Bhagwati v. Commissioner of Income Tax (supra), has held that the registration of a charitable trust under section 12A is not an empty formality. This is apparent from the tenor of the provisions of section 12A. It requires that not only an application should be filed in the prescribed form, setting the details of the origin of the trust, but also names and addresses of the tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in sub-section (1) of section 12AA of the Act and a Certificate is issued granting registration to the Trust or Institution it is apparent that the same is a document evidencing satisfaction about : (1) genuineness of the activities of the Trust or institution, (2) about the objects of the Trust or Institution. Section 12A of the Act stipulates that provisions of sections 11 12 shall not apply in relation to income of a Trust or an Institution unless conditions stipulated therein are fulfilled. Thus granting of registration under section 12AA of the Act denotes, as per legislative scheme, that conditions laid down in section 12A of the Act stand fulfilled. Applying the principles laid down by the Apex Court in the case of Gestetne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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