ASSISTANT COMMISSIONER Vs. SAURASHTRA KUTCH STOCK EXCHANGE LTD

JUDGEMENT

(1.) The present appeal is directed against the judgment and order passed by the High Court of Gujarat, Ahmedabad on March 31, 2003 in Special Civil Application No. 1247 of 2000 [Assistant Commissioner of Income-Tax v. Saurashtra Kutch Stock Exchange Ltd., (2003) 262 ITR 146]. By the said judgment, the High Court confirmed the order passed by the Income Tax Appellate Tribunal, Ahmedabad on September 5, 2001 in Misc. Application NO. 31/Rjt/2000. By the said order, the Tribunal held that there was a 'mistake apparent from the record' within the meaning of sub-section (2) of Section 254 of the Income Tax Act, 1961 and accordingly, it recalled its earlier order passed on October 27, 2000 in ITA No. 69/Rjt/2000.

(2.) Shortly stated the facts of the case are that Saurashtra Kutch Stock Exchange Ltd.- respondent herein is an assessee under the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). It is a Company registered under Section 25 of the Companies Act, 1956. The assessee is a 'Stock Exchange' duly recognized under the Securities Contracts (Regulation) Act, 1956. As a 'Stock Exchange', it is a 'charitable institution' entitled to exemption under Sections 11 and 12 of the Act from payment of income-tax. The assessee, therefore, made an application on February 10, 1992 for registration under Section 12A of the Act. The Commissioner of Income Tax, Rajkot registered it on July 8, 1996. The assessee filed its return of income on October 29, 1996 for the assessment year 1996-97 declaring its total taxable income as 'Nil', claiming exemption under Section 11 of the Act although the assessee had not been registered under Section 12A of the Act. The return was processed under sub-section (1)(a) of Section 143 of the Act. On November 7, 1997, a notice was issued to the assessee by the Commissioner of Income Tax under Section 154 of the Act to show cause why exemption granted under Section 11 of the Act should not be withdrawn. The assessee replied to the said notice and asserted that in accordance with Section 12A of the Act, the trust had made an application for registration and, hence, it was entitled to exemption under Section 11 of the Act. Meanwhile, the Commissioner of Income Tax on February 20, 1998 granted registration to the assessee on condition that the eligibility regarding exemption under Section 11 of the Act would be examined by the Assessing Officer for each assessment year.

(3.) By an order dated December 3, 1999, the Assessing Officer assessed the income of the assessee under sub-section (3) of Section 143 of the Act and rejected the claim of exemption under Section 11 of the Act.