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Exemption U/S. 10(23C)(VI) Can be Claimed without having Registration U/S. 12A

CBDT  Circular No. 14/2015 dated 17th August 2015 is self explanatory and clarify the vital points covering scope of enquiry while granting approval/s 10 (23C) (vi). This clarification on Section 10(23C)(vi) having impact on University or educational institution whose aggregate annual gross receipts exceed Rs. 1 Crore. The vital clarification covers the following;

a. It is also clarified that the principle laid down by the Apex Court in American Hotels case (supra) must be followed while considering the applications filed seeking approval for exemption u/s 10(23C)(vi).

b. It also covered necessity for registration u/s 12AA while seeking approval /claiming exemption u/s 10(23C)(vi).

c. Impact of extraordinary powers of the Managing Trustees to appoint remove or nominate other trustees.

d. Generation of surplus out of gross receipts.

e. Collection of amounts under different heads of fee from students.

f. Impact of extraordinary powers of the Managing Trustees to appoint remove or nominate other trustees.

g. Field authorities are advised to keep the above position in mind while dealing with the matters of approval /exemption u/s 10(23C)(VI). Similar principles would also apply to cases covered u/s 10(23C)(via) of the Act.

Characterstics & Procedure for Registration of University or Educational Institutions under Sec.-10(23C)(vi) of the Income-tax Act, 1961:

1. For this section approval of application for grant for exemption is necessary.

2. Application to the Prescribed authority ( Form 56 D) in four Sets

3. Self Attested List of Major Office Bearers

4. Self Attested Copy of By-laws or memorandum and article of association along with registration certificate of the Society or trust deed of trust.

5. Self attested Copies of the assessment orders for last 3 Years, if any

6. Any approval issued on or after 1-12-2006 will be one time approval and valid till date of withdrawn.

7. The Institution shall publish its accounts in local news paper and furnish the same along with application.

8. Opportunity to hear in case of dissatisfaction.

9. The prescribed authority may call further Documents and Information.

10. Max period of disposal – Within Twelve Months from the date of receipt of the Application.

11. Prescribed Authority: Application in Form No. 56D is to be made to the jurisdictional Chief Commissioner of Income Tax (Exemptions) or Director General of Income Tax (Exemptions).

12. The time period for application to be filled shall have to be filed at any time during the financial year immediately preceding the assessment year from which such exemption is sought.

13. Such application cannot be made for any earlier period.

14. The exemption will be for a period of three years and fresh application shall have to be made after the expiry of un-expired period of 3 years which shall also be permanent exemption unless withdrawn.

15. However its approval is to be granted or rejected within a period of 12 months from the end of the month in which application was received by the authorities.

16. Audit of Accounts is compulsory for such institutions.

17. It is mandatory to file return of income.

CA AMRESH VASHISHT, Meerut

(About the Author– Author was Member of ICAI- Regional Research Committee 2013-14 and ICAI- Committee For Direct Taxes 2011-12 and can be reached at email amresh_vashisht@yahoo.com or on phone Phone: 0 1 2 1-2 6 6 1 9 4 6. Cell: 9 8 3 7 5 1 5 4 3 2 having office at 1 1 5, Chappel Street, Meerut Cantt, UP, INDIA)

Read Other Articles of CA Amresh Vashisht

Categories: Income Tax

View Comments (4)

  • Can exemption u/s 10(23C)(Vii) for educational institution be claimed by having a Pan of Association of person (AOP).

  • Can a assessee file an application under section 56 D without having 80 G registration certificate please reply as soon as possible

  • Ca A T Khatri Mumbai
    The Article is very informative and gives detailed views on the subject.

    We are thankful for such an informative and precise information with section-wise clarity.

  • Good morning sir, I am MS Ravichandran , FCA., still I have a doubt that can deduction under section 10(23C) VI be claimed without getting approval under 12 A. Whether any other approval required to be obtained from Commissioner Exemption , in order to claim deduction u/s 10(23C)VI. If on oversight such approval not obtained in the earlier years itself what would be the consequence in tax angle.

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