COMPARATIVE ANALYSIS OF SEC 12AA/12AB REGISTERED TRUST /INSTITUTION OR TRUST/INST/FUND REFERRED TO IN SUB CLAUSE (iv)(v)(vi)(via) of Sec 10(23C)
| Particulars | Trust/Inst. registered u/s 12AA/ 12AB | Trust/ Inst. referred to in sub clause (iv) of section 10(23C) | Trust/ Inst. referred to in sub clause (v) of section 10(23C) | Trust/ Inst. referred to in sub clause (vi) of section 10(23C) | Trust/ Inst. referred to in sub clause (via) of section 10(23C) | |
| NATURE & PURPOSE | Trust /institution registered for carrying out charitable or religious purpose and claiming exemption u/s 11. | Any fund or institution established for charitable purpose | Any trust or institution wholly for public religious purpose or wholly for public religious and charitable purpose. | Any University or other educational institution existing solely for educational purpose and not for the purpose of profit. (Where the aggregate annual receipts exceed Rs. 5 crore) | Any hospital or other Institution for the reception and treatment of person suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit
(where the aggregate annual receipts exceed Rs. 5 crore) |
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| EXCLUDE | Not applicable | It doesn't include those University or educational institution belong to the same nature and purpose mentioned above para
(i) which is wholly or substantially financed by the Government (Sec 10(23C)(iiiab) (ii) where the aggregate annual receipts from such university or universities or or educational institution or institutions do not exceed Rs. 5 crore. (Sec 10(23C)(iiiad) |
It doesn't include those hospital or other institution belong to the same nature and purpose mentioned above para
(i) which is wholly or substantially financed by the Government (Sec 10(23C)(iiiac) (ii) where the aggregate annual receipts from such hospital or hospitals or or institution or institutions do not exceed Rs. 5 crore. (Sec 10(23C)(iiiae) |
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| Filing Of Return of Income And Withdrawal Of Exemption If Not Filed Within Due Date | That the Trust/Inst. registered u/s 12AA/12AB of the Act shall file ITR-7 in accordance with the prov of Sec 139(4A).
Where such trust/Inst.fails to file ITR within due date, then they will not be allowed exemption. Even by filing ITR-U |
That the fund/Inst/University/trust/hospitals/educational inst./medical inst. referred to in sub clause (iv)(v)(vi)(via) of Sec 10(23C) shall furnish the ITR-7 in accordance with the provision of Sec 139(4C).
Where the Trust / Institution referred to in sub clause (iv), (v),(vi)(via) of clause (23C) of Sec 10 fails to file ITR within the time limit prescribed u/s 139 then they will not be allowed exemption. (i.e. by filing updated return (ITR-U) , trust/Institution referred above will not be allowed exemption) |
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| Meaning of charitable purpose | As per Sec 2(15) of the Income Tax Act , charitable purpose" includes relief of the poor, education, yoga, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility:
Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, unless- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year; |
Not applicable | ||||
| Voluntary Contribution made in the form of corpus | The income of such trust/inst. shall not include any voluntary contribution made in the form of Corpus subject to condition that such voluntary contribution are invested/deposited in forms or modes as per Sec 11(5). | |||||
| Application of income shall not include (i.e shall not qualify as expenditure | Application of income for charitable or religious purpose shall not include:
(i) where such application is made from the Corpus of the trust. (ii) where such application is made from any loan or borrowing Provided that such application made shall be qualified as expenditure when such amount is invested or deposited back into such corpus or when such loan or borrowing is repaid from the income of that year. |
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| Conditions for claiming Exemption | Such Trust/Institution should apply 85% of its income wholly and exclusively to such objects for which it was granted registration for claiming exemption u/s 11 or Sec 10(23C)(iv)(v)(vi)(via) of the Act. | |||||
| Where the application falls short of 85% of income but amount accumulated or set part for application to such objects | Where the Trust/Inst. fails to apply 85% of its income to such objects for which it was granted registration during the PY but accumulated or set apart, whole or part of its income for application to such objects subject to the conditions stipulated therein , then such ambulation shall not be included in the Total income. ( subject to under clause (a) of Explan. 3 to third proviso of Sec 10(23C) or 11(2)(a))
Conditions: (i) Furnish Form No, 10 to the A.O. stating the purpose for which it was accumulated and the period of accumulation shall not exceed 5 years. (ii) the amount so accumulated or set apart shall be invested or deposited in the forms or modes as per Sec 11(5). (iii) Furnish Form No. 10 on or before the due date of Filing ITR as specified u/s 139. Provided that in computing the period of five years referred to in clause (a), the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded. |
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| Violation of conditions for which income was accumulated or set apart for a period of 5 years | Where any income accumulated or set apart for a period of 5 years for application to such objects for which it was granted registration applied in the following manner:
(i) applied for purpose other than the objects for which such trust/inst. is established or ceases to be accumulated or set apart for application thereto, (ii) ceases to remain invested or deposited in any of the forms or modes specified in sub-section (5) of section 11; or (iii) is not utilised for the purpose for which it is so accumulated or set apart during the period of 5 years, or (iv) is credited or paid to any trust or institution registered u/s 12AA or section 12AB or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), Then , such income shall be deemed to be the income of such person of the previous year- (i) in which it is so applied or ceases to be so accumulated or set apart under clause (a); or (ii) in which it ceases to remain so invested or deposited as per 11(5) under clause (b); or (iii) being the last previous year of the period, for which the income is accumulated or set apart, but not utilised for the purpose for which it is so accumulated or set apart under clause (c); or (iv) in which it is credited or paid to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution under clause (d). Proviso- Notwithstanding anything contained sub clause (ii) above where due to circumstances beyond the control of the trust/inst. any amount invested or deposited as per 11(5) can't be applied for the purpose for which it was accumulated or set apart , and if such trust/inst. furnish an application to the A.O specifying such other charitable or religious purpose which is in conformity with the objects of such Trust/Inst. On receiving such an application, if the A.O. is satisfied and allow the Trust/inst. to apply accumulated income for such other charitable or religious purpose mentioned in the application, then the provisions of the section shall apply as if the purpose specified by such person in the application were a purpose originally specified in the notice given to the Assessing Officer. |
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| Filing of Form 9A by Trust/ Inst. registered u/s 12AA/12AB of the Act | Where in any previous such Trust /Inst fails to apply 85% of its income due to
Case1– Whole or part of the income has not been received during the relevant year, Case 2-received as on 31st March Filing of Form No. 9 Form No. 9 should be filed on or before the due date of filing ITR and such income shall be applied (i) For Case 1- Should be applied during the PY in which income received or in the next immediately FY. (ii)For case 2- Should be applied in the next immediately FY. |
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| Voluntary contribution made in the form of corpus shall not be treated as application | Any amount credited or paid by trust/inst. registered u/s 12AA/ 12AB of the act or referred to in sub clause (iv)(v)(vi)(via) of Sec 10(23C) of the Act to any other trust/inst. registered u/s 12AA/ 12AB of the act or referred to in sub clause (iv)(v)(vi)(via) of Sec 10(23C) being voluntary contribution in the form of Corpus shall not be treated as application of income in the hands of Donor Trust/ Inst. | |||||
| Applicability of Tax audit | Where the Total Income of such Trust/Institution registered u/s 12AA/12AB of the Act or referred to in sub clause (iv) (v)(vi)(via) of Sec 10(23C) of the Act exceed the maximum amount which is not chargeable (maximum amount chargeable to tax Rs. 2,50,000 for AOP/Trust/BOI) to tax in any previous year, then such fund or institution or trust or any university or other educational institution or any hospital or other medical institution shall-
(a) keep and maintain books of account and other documents in such form and manner and at such place, as may be prescribed; and (b) get its accounts audited in respect of that year by an accountant. |
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| Form of Audit Report | The audit report of such trust/institution shall be
(A) Form No. 10B where (i) where the total income of such trust or inst. without claiming exemption exceeds Rs. 5 crore during the PY. (ii) such trust or inst. has received any foreign contribution during the PY. (iii) such trust/inst. has applied any part of its income outside India during the PY. (B) In any other case, Form 10BB where
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| Income applied to the benefit of person referred to in sec 13(3) | Where the income or part of income or property of any fund or institution or trust registered u/s 12AA/12AB of the Act or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of Sec 10(23C), has been applied directly or indirectly for the benefit of any person referred to in sub-section (3) of section 13, such income or part of income or property shall, be deemed to be the income of such fund or institution or trust or university or other educational institution or hospital or other medical institution of the previous year in which it is so applied Person referred to in sub section (3) of Sec 13:
(a) the author of the trust or the founder of the institution; (b) any person who has made a substantial contribution to the trust or institution, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds fifty thousand rupees; (c) where such author, founder or person is a Hindu undivided family, a member of the family; (cc) any trustee of the trust or manager (by whatever name called) of the institution; (d) any relative of any such author, founder, person, member, trustee or manager as aforesaid; (e) any concern in which any of the persons referred to in clauses (a), (b), (c), (cc) and (d) has a substantial interest. |
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Particulars |
Trust/Inst. registered u/s 12AA/12AB | Trust/Inst. referred to in sub clause (iv) of section 10(23C) | Trust/Inst. referred to in sub clause (v) of section 10(23C) | Trust/Inst. referred to in sub clause (vi) of section 10(23C) | Trust/Inst. referred to in sub clause (via) of section 10(23C) |
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Specified Violation |
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 or the fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) is approved or provisionally approved 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 or approval, on or before the specified date, 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; (iii) pass an order in writing, refusing to cancel the registration of such trust or institution or approval, on or before the specified date, if he is not satisfied about the occurrence of one or more specified violations; (iv) forward a copy of the order under clause (ii) or clause (iii), as the case may be, to the Assessing Officer and such trust or institution. "Specified Date" shall mean the day on which the period of six months, calculated from the end of the quarter in which the first notice is issued by the Principal Commissioner or Commissioner, on or after the 1st day of April, 2022, calling for any document or information, or for making any inquiry, under clause (i) expires. "specified violation",- (a) where any income of the fund or institution or trust or any university or other educational institution or any hospital or other medical institution has been applied other than for the objects for which it is established; or (b) the fund or institution or trust or any university or other educational institution or any hospital or other medical institution has income from profits and gains of business, which is not incidental to the attainment of its objectives or separate books of account are not maintained by it in respect of the business which is incidental to the attainment of its objectives; or (c) any activity of the fund or institution or trust or any university or other educational institution or any hospital or other medical institution- (A) is not genuine; or (B) is not being carried out in accordance with all or any of the conditions subject to which it was notified or approved; or (d) the fund or institution or trust or any university or other educational institution or any hospital or other medical institution has not complied with the requirement of any other law for the time being in force, and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality. |
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