filling of return- govt. university

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vikram nayyar (Querist)
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01 July 2011 kindly clarify if a govt. university, the income of which is exempted u/s 10(23C)(iiiab) of i.tax act, is required to file i.tax return? if yes under which sec and what is the relevent form.
Secondly if such university receive some income in the shape of int, rent or consultancy fee, then will it be sufficient to submit a declaration in form 15G or univ need to apply for non deduction certificate from i.tax dept.

RAHUL GARG

RAHUL GARG (Expert)
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02 July 2011 The university is an artificial juridical person which is covered u/s 10(23C)(iiiab) is not required to file the return of income due to the following reasons-

i) All the incomes of such universities are exempt under section 10(23C)(iiiab).

ii) As per section 139(1) only that person except company/firm is required to file ROI whose "total income" exceeds the basic exemption limit. Now for computing total income we have to first compute Gross total income. In this case the Gross total income shall be nil as after giving effect to the provisions of section 10(23C)(iiiab) which is a exemption provision and not deduction provision the GTI becomes nil. Hence, nothing exceeds exemption limit.

iii) It is not covered under fourth proviso to section 139(1) which says that in case of artificial juridical person ('AJP')if before giving effect to the provisions of section 10A, 10B, 10BA and Chapter VIA if total income exceeds the exemption limit then the AJP shall be required to file ROI. In the said proviso section 10 is not covered, hence in case of AJP which are eligible for exemption u/s 10 and not 10A, 10B and 10BA, first the effect should be given for section 10 to determine the total income for the purpose of filing ROI which will be NIL in each and every cases. Hence, no need to file ROI.

iv) It is not covered u/s 139(4C) as the universities which are eligible for exemption u/s 10(23C)(iiiad)/(iiiae) are covered but those eligible under (iiiab) are not covered. Hence, effect shall firstly be given for exemption u/s 10(23C)(iiiab) for determine the GTI which shall be nil in all the cases. Hence, no need to file ROI.

However, if the university is receiving the grants/donations covered u/s 35(1) (ii) or (iii) for scientific research, social science research or statistical research then the university shall be required to furnish ROI under section 139(4D) as the law is not clear on this. In section 139(4D) it is mandatory for every university covered u/s 35(1)(ii)/(iii) to file ROI whether it has income or loss. The language used is like that "every university referred to in section 35(1)(ii)/(iii).. shall furnish ROI". Hence, whatever is the income of university, even its income is exempt but if it is covered under section 35, ROI is required to be filed. It is basically a verification section.

Hope this clarifies your first query.

Now regarding your second query, please note that consultancy fee is not covered under Form 15G and only dividends, interest are covered. Hence, 15G can be furnished to the deductor only for interest and dividend. For consultancy fee 197 certificate shall be required from the AO.

Hope all your queries are satisfactorily replied. Please let me know if any further clarification required.

Best Regards,

Rahul Garg

Consultant, TCE, Tax Practice

Ernst & Young (Delhi)

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vikram nayyar

vikram nayyar (Querist)
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03 July 2011 Under section 139(4D), if a govt. univ. covered under section 35(i)(ii)/(iii), then it is required to file ROI.

However it is not clear how to ascertain whether a univ. is covered under Sec 35 or not. there can be following situations:-

1)The univ. issue a certificate/receipt for donation/grant received by it for research and on the basis of that certificate the donor co./firm is claiming deduction u/s 35.

2)The univ. did receive donations for research but the agreement/MOU vide which such danation was received has no reference of sec 35 of I.tax act. Also no certificate has been issued to the donor for claiming deduction u/s 35 by the donor.

3)The univ. has not received any donation for research.

So in the above situations what shall be the requirements as to filing ROI.

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