CBDT notification for introduction of new forms for filing application for registration under section 10(23C) of the Income-tax Act, 1961

Government of India amended the first proviso and second proviso of Section 10(23C) and by way of inserting clause (ac) under sub-section (1) of Section 12A of the Act through Finance Act, 2020 requiring that all existing institution to make fresh application with the Principal Commissioner or Commissioner for seeking approval or registration in prescribed form, as the case may be. The Central Board of Direct Taxes (‘CBDT’) through notification 19/2021 dated 26 March 2021 has notified the forms for a new scheme for trusts which comes into effect from 1 April 2021.

We have summarized the notification with respect to application under section 10(23C) of the Income-tax Act, 1961 (‘Act’) in a tabular form highlighting the details of the forms notified by CBDT.

1. Finance Act, 2020 has replaced the existing registration process with a complete new process which involves filing of online application for registration and grant of approval under section 10(23C) of the Act.

2. Fund or trust or institution or university or other educational institution or hospital or other medical institution under clause (i) or clause (ii) or clause (iii) or clause (iv) of first proviso to clause (23C) of Section 10 (‘Non-profitable entities’), would be required to file application under substituted Rule 2C of Income-tax Rules, 1962 as amended by the Income-tax (6th Amendment) Rules, 2021.

3. Under the amended process, approval shall be granted for a period of 5 years, and the Non-profitable entities will be required to re-apply for registration in the manner and the period as prescribed the provision of the Act.

4. Existing Non-profitable entity which is already approved under the erstwhile provisions of the Act is also required to make application for registration in prescribed form within 3 month from 1 April 2021, however no enquiries shall be made in such case for grant of registration.

Particular Period for filing application for registration Form for registration application Approval shall be effective Time limit for passing an order
Existing Non-profitable entities  already approved under existing rules Within 3 months from 1 April, 2021 Form 10A From the financial year in which approval was originally granted Before expiry of the period of 3 months from the end of the month in which the application was received
Non-profitable entities approved under newly inserted Rules through notification 19/2021 dated 26 March 2021 At least 6 months prior to expiry of the period of approval Form 10AB From the financial year in which registration application is made Before expiry of the period of 6 months from the end of the month in which the application was received:
Provisionally approved Non-profitable entities At least 6 months prior to expiry of the period of approval Form 10AB From the financial years for which provisional approval was received Before expiry of the period of 6 months from the end of the month in which the application was received:
In any other case (Note 1) At least one month prior to the commencement of the Financial year for which approval is sought Form 10A From the financial year in which registration application is made Before expiry of the period of 1 months from the end of the month in which the application was received:

Note:

1. All applications made under the existing rules and is pending before the Principal Commissioner or Commissioner, on which no order has been passed before the 1st day of April, 2021, shall be deemed to be an applications made under clause (iv)

Documents required for filing application

1. For an entity, created or established under an instrument, self-certified copy of such instrument creating or establishing the entity.

2. For an entity, created or established otherwise than under an instrument, self-certified copy of such of the document evidencing creation or establishment of the entity.

3. Self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be.

4. Self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010 (42 of 2010), if the applicant is registered under such Act;

5. Self-certified copy of existing order granting approval under clause (23C) of section 10;

6. Self-certified copy of order of rejection of application for grant of approval under clause (23C) of section 10, if any;

7. For existing entities, self-certified copies of the annual accounts of three years immediately preceding the year in which the said application is made;

8. Where an undertaken is by the entity as per the provisions of sub-section (4) of section 11 and/ or where income of the entity includes profits and gains of business as per the provisions of sub-section (4A) of section 11, self-certified copies of the annual accounts and report of audit as per the provisions of section 44AB of three years immediately preceding the year in which the said application is made;

9. Note on the activities of the applicant.

Other Aspects

1. The Form shall be furnished electronically through digital signature, if the return of income is required to be furnished under digital signature. Otherwise, through electronic verification code in a case of no requirement of digital signature for filing return of income.

2. The Form shall be verified be verified by the person who is authorized to verify the return of income under section 140 of the Income-tax Act, 1961.

In case of any queries/ doubts in relation to the recently introduced forms, please feel free to reach out through email at [email protected]

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Location: Indore, Madhya Pradesh, India
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