12A Registration condonation of delay

This query is : Resolved

esha dsouza (Querist)
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23 September 2009 We had made an application U/S 12 A for registration of a trust in the current financial year but the society was registered in Aug'08 and the trust registered an Income including Corpus Donations of Rs.51,00,000.00 but could spend only Rs. 12,00,000.00 during that year and the balance is in Fixed Deposits.The ITO is refusing to grant the condonation of delay and wants to tax the difference of Rs. 39,00,000.00 as the trust will get the 12 A registration certificate only from 01.04.2009. If you'll could please guide us in this matter as to what respite we will derive from the Income Tax Act or related case laws. Please enlighten. Thanx

Rajeev

Rajeev (Expert)
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24 September 2009 well as long as you can prove that there were sufficient reasons for not being able to file the application for registration in time, then the provisions of sections 11 and 12 would not be applicable.

The trust receives voluntary contributions from the persons for a charitable cause. The payments are not received by the trust for diverting towards payment of taxes. The spirit with which the payments are made are also to be considered and if there is a bona fide reason for filing the application for registration belatedly then the delay should be condoned so that the purposes for which contributions have been received is achieved. If the trust knowingly ignores the provisions of law then necessarily it has to bear the burden. In the instant case, you have to establish that the trustees or the persons who were managing the affairs of the trust were not aware of filing the application under section 12A. Therefore, the Commissioner should have condoned the delay.

I hope you know its appealable , Just try and prove beyond doubt that there was a reasonable cause for delay and the condonation of delay has to be granted , the exemption should be given from the date of inception

Refer Citation : Kadur Vidhya Pratishtana v Commissioner of Income-tax,Mysore Gopal Chowdhury, Judicial Member And N. L. Kalra, Accountant Member IT Appeal No. 162(Bang.) of 2005

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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24 September 2009 The Income tax department's view may be by virtue of section 12A(2) which says, where an application has been made on or after 01/06/2007, the provisions of section 11 and 12 shall apply in relation to the income of such trust from the assessment year immediately following the financial year in which such application is made.

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