The Tax Publishers

Application for Registration of Charitable or Religious Trusts--Recent Developments

CA. Dr. Nisha Bhandari

According to Section 12A(1), the exemption provisions of Sections 11 and 12 shall not be applicable in relation to the income of any trust or institution unless conditions specified under clauses (aa), (ab), (b) and (ba) of Section 12A are satisfied. The clauses (aa) and (ab) of Section 12A require the assessee-trust to get registered by making an application to the Principal Commissioner or Commissioner of Income Tax. Rule 17A prescribes the form and manner for furnishing application for registration of charitable or religious trusts, etc., Rule 17A has recently been substituted by the Income Tax (First Amendment) Rules, 2018, effective from 19-2-2018. The learned author analyses the related requirements.

1. Registration, one of the conditions precedent for availing of exemption under Section 11

According to Section 12A(1), the exemption provisions of Sections 11 and 12 shall not be applicable in relation to the income of any trust or institution unless conditions specified under clauses (aa), (ab), (b) and (ba) of Section 12A are satisfied. The clauses (aa) and (ab) of Section 12A require the assessee-trust to get registered by making an application to the Principal Commissioner or Commissioner of Income Tax.

Where the trust was not registered under Section 12A, exemption under Section 11 cannot be allowed even if it is eligible for the same.--Vide Muslim Imdadi Society v. Dy. CIT (2004) 1 SOT 1 (Del-Trib).

For the purpose of claiming benefit under Section 11(1)(a), registration under Section 12A is a condition precedent and as the assessee has not been granted registration under Section 12A, it is not entitled to claim exemption under Sections 11(1) and 12 of the Act.--Vide U.P. Forest Corporation & Anr. v. Dy. CIT 2008 TaxPub(DT) 1285 (SC) : (2008) 297 ITR 1 (SC) : (2007) 165 Taxman 533 (SC) : (2007) 213 CTR (SC) 473.

2. Requirement regarding registration as applicable from 1-6-2007

section 12A(1)(aa) provides that the provisions of Sections 11 and 12 shall not apply in relation to the income of the trust or institution (where any application for registration has not been made under clause (a) before the 1-6-2007), unless the person in receipt of the income has made an application for such registration on or after the 1-6-2007 in the prescribed form and in the prescribed manner to the Commissioner and such trust or institution is registered under Section 12AA.

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