Case Law Details
CIT Vs Saurashtra Kutch Stock Exchange Ltd. (High Court of Gujarat at Ahmedabad ) -Section 11 of the Act envisages exemption of certain income of the trust registered under Section 12A of the Act. This itself may require certain scrutiny and applicability of the exemption at the hands of the Assessing Officer. Despite registration under Section 12A of the Act, it is not even the case of the assessee that without any application of mind, the Assessing Officer must grant exemption of whatever claim put forth by the assessee.
It is in this background that the condition would be read and understood. While granting exemption under Section 11 of the Act, the claim of the assessee shall have to be examined by the Assessing Officer irrespective of registration granted under Section 12A of the Act. This, however, would not mean that the Assessing Officer can re-examine the question of eligibility of the trust to seek exemption under Sections 11 and 12 of the Act.
Once the CIT grants approval for registration of the trust u/s 12A, the AO is not required to re-examine the entire question of the object and purpose of the trust even though the approval was given with the said condition as the CIT cannot keep the very foundation issue open to be judged by the AO.
When there is no conclusion that any part of the funds were diverted or applied as not permitted under sub-section (3) of Section 13, the exemption cannot be denied only on the basis of some irregularities observed by SEBI in managing the funds of the trust. – Revenue’s appeal dismissed.
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
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