Ambiguity of Trust provisions under Income Tax Act: CAAS Surat Raises Concerns
Introduction: In a representation addressed to the Chairman, Central Board of Direct Taxes (CBDT), the Chartered Accountants Association, Surat (CAAS), brings attention to the ambiguity surrounding Trust provisions under the Income Tax Act. The association, known for addressing impactful taxation issues, expresses concerns about Circular No.6/2023 of CBDT-F.No.370133/06/2023-TPL dt.24/05/2023.
Detailed Analysis:
1. New Procedure for Trust Registration: CAAS highlights the introduction of a new procedure for obtaining fresh registration of Trusts or Institutions under sections 12AB and 10(230) of the Income Tax Act. The same applies to the approval process under section 80G(5) of the Act. The Income Tax Rules now prescribe a common Form No. 10AB for both fresh registration and approval.
2. Inconsistency in Date Extension: The key issue raised by CAAS pertains to the inconsistency in date extensions. While the date for filing applications for registration under section 12AB is extended, the corresponding date for approval under section 80G is not extended. CAAS argues that as a corollary, the approval date under section 80G should be extended till 30.09.2022, a point inadvertently overlooked.
3. Supporting Representations: CAAS references a similar representation made by the Gujarat Chamber of Commerce and Industries in Part “C” of their letter dated 01.08.2023, addressed to The Revenue Secretary. This adds weight to the argument, emphasizing the need for alignment in the extension of dates for both processes.
4. Demand for Clarification: CAAS concludes its representation by urging the CBDT to issue a clarification regarding Circular No. 6 dated 24.05.2023. They assert that the extension of dates for filing Form No. 10AB for obtaining approval under section 80G of the Act should be explicitly acknowledged and aligned with the extension for registration under section 12AB.
Conclusion: In conclusion, the Chartered Accountants Association, Surat, advocates for the resolution of the ambiguity in Trust provisions under the Income Tax Act. Their representation emphasizes the need for consistent date extensions for both registration and approval processes, as highlighted in Circular No.6/2023. CAAS expects an effective resolution of their demand, which they assert is in the best interest of all stakeholders. The letter, signed by the President and Secretary of CAAS, has also been copied to the Finance Minister and Revenue Secretary for their attention. The effective resolution of this matter will contribute to clarity and efficiency in compliance for trusts and institutions in the income tax domain.
*****
Chartered Accountants Association, Surat
Ref: CAAS/Representations/2023-24/03 Date: 05-01-2024
To,
The Chairman,
Central Board of Direct Taxes,
North Block,
New Delhi – 110001
Sub: Ambiguity of Trust Provisions under Income Tax
Ref: Circular No.6/2023 of CBDT-F.No.370133/06/2023-TPL dt. 24/05/2023
Respected Madam,
As you are well aware that Chartered Accountants Association Surat (CAAS), has been bringing up impactful and most relevant issues relating to taxation and more specifically related to hardships of the stakeholders, we hereby bring to your notice the present ambiguity of Trust provisions under the Income Tax Act in Circular No.6/2023 of CBDTF.No.370133/06/2023- TPL dt.24/05/2023. Such ambiguity cannot be resolved without the active push from your ministry.
Issue:
1. A new procedure has been laid down for getting fresh registration of the Trusts or Institutions u/s. 12AB / 10(230) of the Income Tax Act. Similarly, the new procedure has been laid down for getting approval U/s. 80G(5) of the Act. For getting fresh registration and approval, a common Form No 10AB has been prescribed under the Income Tax Rules.
Representation:
1. It is also to be noted that the approval u/s. 80G of the Act can be granted only when the Trust or Institution is registered under the Income Tax Act. So, when the date is extended for fling the application for getting the registration u/s. 12AB of the Act. as corollary, the date for getting approval u/s. 80G should also have to be extended till 30.09.2022. However, the same has not been extended through inadvertence.
2. The representation on similar line was made by the Gujarat Chamber of Commerce and Industries in Part “C” of their letter dated 01.08.2023 addressed to The Revenue Secretary.
3. Therefore, a clarification should be issued in context of Circular No. 6 dated 24.05.2023, that it also applies to filing of Form No 10AB for getting approval u/s. 80G of the Act
We look forward to the effective resolution of our demand which is in the best interest of all the stakeholders.
Thanks & Regards,
For Chartered Accountants Association, Surat.
President | Secretary
Copy to::
(1) Finance Minister,
134, North Block, New Delhi-110011
(2) Revenue Secretary,
128/A, North Block, New Delhi-110011
