Comparative Analysis of Sec 12AA/12AB/10(23C) Registered Trust /Institution

(where the aggregate annual receipts exceed Rs. 5 crore)

(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)

(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)

Where such trust/Inst.fails to file ITR within due date, then they will not be allowed exemption. Even by filing ITR-U

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)

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;

(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.

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.

(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.

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.

(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.

(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

•  Total income of the trust or institutions does not exceed Rs. 5 crore during the previous year.
•  Where the trust or institution does not receive any amount of foreign contribution.
• Where the trust or institution does not apply any amount of its income outside India in the previous year.

(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.

Particulars

Specified Violation

(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.