STOCK EXCHANGE Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner Stock Exchange challenges the reassessment notices issued by the Asstt. CIT, Circle -2(5), Ahmedabad on 20th July, 1995 for the asst. yrs. 1989 -90 to 1993 -94.

(2.) THE case of the petitioner is that its income was held to be exempt from income -tax on the ground that it was held for charitable purposes in the past for the asst. yrs. 1959 -60 to 1984 -85. According to the petitioner, it was entitled to exemption under s. 4(3)(i) of the IT Act, 1922 and later under s. 11 of the Act of 1961. The petitioner contends that it was registered under s. 12A of the IT Act with the CIT, Ahmedabad for the purpose of grant of exemption under s. 11 of the Act. As it was represented by some of the Stock Exchanges that they should be recognised as institutions established for charitable purposes under s. 10(23C)(iv) of the said Act also, the Government of India informed some of these Stock Exchanges including the petitioner by its letter dt. 18th December, 1980 that they should submit applications for consideration of issuing Notification under the said provision. Thereafter, a Notification came to the issued on 24th September, 1987 of granting exemption under s. 10(23C)(iv) of the Act for the asst. yrs. 1985 -86 to 1988 -89. On the expiry of the said period, the petitioner applied for renewal of exemption under the said provision but no renewal was granted. By letter dt. 9th September, 1991, the CBDT wrote to the petitioner that it had examined its case and that as the case of the petitioner was covered under specific provision contained under s. 10(23A), the provisions of s. 10(23C)(iv) which apply to charitable institutions and trusts in general, would not apply in case of the Stock Exchanges. Thereupon, the petitioner sent a request that it's application for renewal of exemption under s. 10(23C)(iv) should be treated as an application under s. 10(23A), and exemption be continued from asst. yr. 1989 -90 onwards. By its order dt. 9th September, 1991 it was ordered that the exemption under s. 10(23C)(iv) of the Act cannot be continued in favour of the petitioner Stock Exchange. Thereafter, by order dt. 31st October, 1996 the Board deleted from its earlier order dt. 9th September, 1991, the words to the effect that the case of the Stock Exchange was covered by the specific provisions of s. 10(23A) of the Act.

(3.) THEREFORE , as it is now pointed out to us, the Central Government by its letter dt. 7th March, 1997 has communicated to the petitioner its decision that it could not be notified under s. 10(23C)(iv) of the Act, since its activities were mainly intended to protect and regulate the interests of its members viz. the share -brokers only.