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TMI Blog2025 (1) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... gory of "advancement of any other object of general public utility", the activities of assessee are in the nature of trade, business and commerce and total receipts of the assessee from such activities are more than 20% of the total receipts, hence the proviso to section 2(15) of the I.T. Act is applicable and not entitled to exemption u/s 11 of the Act in view of the provisions of section 13(8) of the I.T. Act, 1961? 2. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in allowing the exemption u/s 11 of the Act on the basis of the decision of the Hon'ble ITAT's on identical facts in the case of M/s NCDEX Investor (Client) Protection Fund Trust for AY 2016-17, A.Y. 2018-19, AY 2019-20 & 2020-21 vide ITA No.854 to 856/Mum/2023 dated 22/09/2023 without appreciating the fact that the department has not accepted the decision of Hon'ble ITAT and filed appeal before Hon'ble Bombay High Court vide lodging No. ITXAL/12245/2024 for A.Y 2016-17, ITXAL/12249/2024 for A.Y. 2019-20, ITXAL/12244/2024 for A.Y. 2020-21 and ITXAL/12251/2024 for A.Y. 2018-19 and the same are pending for adjudication? 3. Whether on the facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd its members. 3. During the course of assessment, the AO asked the assessee to explain why its income be not assessed as profit and gains of business and the exemption claimed u/s 11 of the Act be not denied to it. The assessee made submission before the ld. Assessing officer which is reproduced as under: "(a) It had been formed as per direction of FMC/SEBI, it was registered with Charity Commissioner, Mumbai for charitable purposes. Its objects were not all commercial in nature and it did not have any intention to maximize/earn profits on its own for the MCX. Its objectives were purely to protect the investors (i.e. public at large) against any defaulter member of the Exchange, creating awareness by educating general public and other stake holders through publishing books and other literature by means of media, advertisements, holding events, etc. of trading on commodity exchange. (b) The appellant also elaborated upon the mechanism for settling the claims it receives against defaulting members to demonstrate that such claims were audited and scrutinized at various levels. It was also stated that in the event of winding up of MCX, the funds of the appellant were to be utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any commercial activities for a fees or cess either direct or indirect and also the receipt from such commercial activities were more than Rs. 25 lakh. Therefore, the proviso to section 2(15) of the Act was attracted. Accordingly, the receipt of the assessee was treated by the assessing officer as business profit and exemption claimed u/s 11 of the Act was not allowed to the assessee. 5. The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal filed by the assessee vide order dated 04.11.2019 stating that assessee had not complied with hearing notices and concurring with the view of the AO held that assessee trust was not eligible for exemption u/s 11 of the Act. The assessee filed appeal before the ITAT. The ITAT vide order dated 19.03.2020 (ITA No. 861/Mum/2020) restored the issue to the file of ld. CIT(A) for deciding on merit. The ld. CIT(A) held that the assessee is eligible for exemption u/s 11 of the Act and directed the AO to allow the same. 6. During the course of appellate proceedings before us, the ld. Counsel filed paper book comprising details and copies of documents filed before the lower authorities. The ld. Counsel has also filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Before us, Authorized Representative(AR)submitted that the similar issue was decided by the Mumbai Tribunal in the matter of MCX Stock Exchange Investors Protection Fund Currency Derivatives Segment Trust (ITA/7922/Mum/2011-AY.2011-12, date-02.01.2014) and in the case of Inter-connected Stock Exchange Investors Protection Fund (ITA/7436/M/2011-20.9.2013), that the objects and facts and circumstances in the case of the assessee as well as in the above referred two cases were identical. DR stated that matter should be decided on merits. 3. We have heard the rival submissions and perused the material available on record. We find that in the case of MCX Stock Exchange Investors Protection Fund Currency Derivatives Segment Trust (supra) C Bench of the Mumbai Tribunal has held as under: "5. Having considered the rival submissions and careful perusal of the relevant record we note that the application for registration u/s 12AA has been rejected by the DIT (Exemption) on the following grounds: 1) the activity of the assessee being carried out not for the object of the general public utility but meant for benefit for specific persons investing through specific Stock Exchanges. ii) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of general public utility and therefore, the registration w/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." Respectfully, following the orders of the coordinating benches, we decide the effective ground of appeal in favour of the assessee and direct the DIT-E, Mumbai to grant registration to the assessee-trust u/s 12A of the Act." Further, we have perused the decision of ITAT, Mumbai in the case of NCDEX wherein identical issue on similar fact has been adjudicated in favour of the assessee and the relevant extract of the decision is reproduced as under: "014. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the income of the assessee with respect to contribution received from recognized stock exchange and the members thereof is eligible for exemption under section 10 (23EC) of the act. Central government for this exemption also notifies the assessee. Therefore, as far as the income of contribution is concerned, the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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