National Stock Exchange Investor Protection Fund Trust Vs Assistant Director of Income Tax (ITAT Mumbai)
The cross appeals filed by the assessee and the Revenue before the ITAT Mumbai arose from the order dated 15.02.2016 of the Commissioner of Income Tax (Appeals) concerning Assessment Year 2011-12. The assessee, National Stock Exchange Investor Protection Fund Trust, challenged, inter alia, denial of exemption under Section 11(2) of the Income-tax Act, 1961 in respect of accumulation of ₹33,19,23,133/-, and the levy of interest under Sections 234A and 234C. The Revenue challenged the CIT(A)’s allowance of exemption under Section 10(23EA), contending that the claim had not been made in the original return.
The assessee Trust had been established on 11.07.1995 pursuant to directions of the Government of India and SEBI for safeguarding the interests of investors in the stock market. Its primary object was to compensate investors, trading members or constituents for losses arising in specified circumstances, including where a trading member was declared a defaulter. Initially, the Trust’s income was exempt under Section 10(23C)(iv). Subsequently, Section 10(23EA) was introduced with effect from 01.04.2001, and the CBDT notified the assessee Trust for the purposes of that provision. Following amendment of Section 10(23EA) with effect from 01.04.2007, exemption under that provision was restricted to contributions received from stock exchanges and their members, while income from investments was claimed as exempt under Sections 11(1) and 11(2).
