National Stock Exchange Investor Protection Fund Trust Vs CIT (ITAT Mumbai)
Investor Protection Is Not Member Protection: Registration u/s 12AB & Approval u/s 80G Restored as Sections 13(1)(c) & 13(3) Miss the Market
Trust Born Out of a Regulatory Mandate
The assessee was a public charitable trust constituted by the National Stock Exchange of India Ltd. on 11 July 1995, pursuant to directions of the Ministry of Finance & the regulatory framework governing recognised stock exchanges.
Its principal object was to compensate investors or constituents for losses suffered when a trading member was declared a defaulter, subject to the limits prescribed by the trustees. Its other objects included investor education, awareness & related research.
The Trust was registered under the Bombay Public Trust Act, 1950 and had obtained registration u/s 12A in 1995. It had also been granted registration u/s 12AB & approval u/s 80G for the immediately preceding period. For continuation from AY 2027-28 onwards, it filed Form No. 10AB on 26 September 2025.
Part of its income was also eligible for exemption u/s 10(23EA), pursuant to CBDT Notification No. 253/2005.
CIT(E) Sees a Benefit to NSE Members
The CIT(E) noticed that the Trust received contributions from NSE & its trading members and utilised its funds to meet investor claims arising upon a trading member being declared a defaulter.
