Law:

Section:

Section 11, read with section 2(15) of the Income-tax Act, 1961 – Charitable or religious trust – Exemption of income from property held under – Assessment years 1970-71 and 1971-72 – Whether as long as activities in which assessee stock exchange was engaged were not activities for profit and income derived by it from levy of membership fees and listing fees were being applied for charitable purposes, assessee was entitled to claim exemption under section 11 notwithstanding fact that its memorandum made reference to some objects which might not be of charitable nature – Held, yes FACTS The assessee was a stock exchange. According to the memorandum of association its principal objects were (i) facilitating the transaction of business of the stock exchange and establishing for that purpose a clearing house for the transaction of the members; (ii) erection and maintenance of a suitable building in Bangalore for transacting there the business of the association and for other purposes as may be determined upon; (iii) dealing in any manner with the property of the association; (iv) to associate with other bodies having objects similar to those of the association; (v) establishing and supporting institutions, trusts, etc., calculated to benefit the present and past members and employees and the dependants of such persons; and ( vi) carrying on business as financiers, promoters, etc. During the relevant assessment years the income of the assessee consisted of (1) administration fees and membership fees, and (2) listing fees paid by companies who wanted the rates of their shares to be quoted in the circulars issued by the assessee and wished to have periodical information about the stock market. The assessee claim exemption under section 11 contending that its objects were of general public utility not involving the carrying on of any activity for profit and the income realized by it had been applied for charitable purposes. The ITO declined to exempt the incomes of the assessee under section 11. The AAC, however, allowed the appeal of the assessee. The Tribunal dismissed the revenue's appeal. On reference : HELD The income derived by the assessee had to be utilized for…

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