Finance Bill, 2023 Scope of Specified Violation for Cancellation of Registration or for Withdrawal of Approval of Trusts/Institutions Widened by Finance Bill, 2023

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The Tax Publishers Finance Bill, 2023--Charitable Trusts Scope of Specified Violation for Cancellation of Registration or for Withdrawal of Approval of Trusts/Institutions Widened by Finance Bill, 2023 CA. Nisha Bhandari Under the existing scheme of law the Principal Commissioner or Commissioner can initiate cancellation proceedings of trusts on occurrence of any specified violation. The Finance Bill, 2023 proposes to extend the scope of specified violation by including therein the instances of incomplete or false information in the form furnished for registration or re-registration and for approval or re-approval by the trusts or institutions. The present write up aims at discussing this proposed amendment. 1. Cancellation of registration granted under Section 12AB As per currently applicable sub-section (4) of Section 12AB where registration or provisional registration of a trust or an institution has been granted under clause (a) or clause (b) or clause (c) of sub-section (1) or clause (b) of sub-section (1) of Section 12AA, as the case may be, and subsequently, -- (a) the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or (b) the Principal Commissioner or Commissioner has received a reference from the assessing officer under the second proviso to sub-section (3) of Section 143 for any previous year; or (c) such case has been selected in accordance with the risk management strategy, formulated by the Board from time to time, for any previous year, the Principal Commissioner or Commissioner shall -- (i) call for such documents or information from the trust or institution, or make such inquiry as he thinks necessary in order to satisfy himself about the occurrence or otherwise of any specified violation; (ii) pass an order in writing, cancelling the registration of such trust or institution, after affording a reasonable opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violations have taken place; SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Finance Bill, 2023--Charitable Trusts

Scope of Specified Violation for Cancellation of Registration or for Withdrawal of Approval of Trusts/Institutions Widened by Finance Bill, 2023

CA. Nisha Bhandari

Under the existing scheme of law the Principal Commissioner or Commissioner can initiate cancellation proceedings of trusts on occurrence of any specified violation. The Finance Bill, 2023 proposes to extend the scope of specified violation by including therein the instances of incomplete or false information in the form furnished for registration or re-registration and for approval or re-approval by the trusts or institutions. The present write up aims at discussing this proposed amendment.

1. Cancellation of registration granted under Section 12AB

As per currently applicable sub-section (4) of Section 12AB where registration or provisional registration of a trust or an institution has been granted under clause (a) or clause (b) or clause (c) of sub-section (1) or clause (b) of sub-section (1) of Section 12AA, as the case may be, and subsequently, --

(a) the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or

(b) the Principal Commissioner or Commissioner has received a reference from the assessing officer under the second proviso to sub-section (3) of Section 143 for any previous year; or

(c) such case has been selected in accordance with the risk management strategy, formulated by the Board from time to time, for any previous year,

the Principal Commissioner or Commissioner shall --

(i) call for such documents or information from the trust or institution, or make such inquiry as he thinks necessary in order to satisfy himself about the occurrence or otherwise of any specified violation;

(ii) pass an order in writing, cancelling the registration of such trust or institution, after affording a reasonable opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violations have taken place;