751/CBDT. - Income Tax - 751/CBDT

INSTRUCTION NO. 751/CBDT Dated : September 4, 1974 Section(s) Referred: 12A Statute: Income - Tax Act, 1961 Section 12A of the Income-tax Act, 1961 was inserted by the Finance Act, 1972 to give effect to the recommendations of the Direct Taxes Enquiry Committee that system of compulsory registration of trusts should be introduced. The object sought to be secured therefrom being to keep a watch on the activities of the trusts. In terms of section 12A(a) every trust desirous of claiming exemption u/s 11 and 12 is under on obligation to file an application for registration in the prescribed from and in the prescribed manner to the Commissioner of Income-tax. Such applications has to be filed before the first day of July 1973 or before the expiry of a period of one year from the date of the creation of the trust or establishment of the instruction, whichever is later. 2. A question has been raised as to whether any normal order has to be passed by the Commissioner of Income-tax on receipt of such application u/s 12A(a) of the Income-tax Act, 1961. The plain language of the section would indicate that a formal acknowledgment of such applications by the Commissioner would be necessary to enable the applicants to produce evidence of compliance with the requirements of section 12A at the time of assessment. The proviso to section 12A which empowers the Commissioner to use his discretion to admit a belated application would further emphasise the necessity for such formal acknowledgment of documents filed and in cases of belated filing the conscious act of the Commissioner in admitting or rejecting the application. Therefore, in keeping with the requirements of section 12A(a), the Board considers it desirable that all applications made under this section are acknowledged by the Commissioners of Income-tax immediately on receipt thereof, through a proforma as per Annexure-I. A copy of this acknowledgment should also be endorsed to the Income-tax officer assessing that instruction. The Board has also decided that a register should be maintained as per Annexure-II for recording all applications for registration u/s 12A preferred by religious and charitable trusts, and it should be invariably ensured that while issuing the acknowledgment in the prescribed from the serial number of registration in this register is endorsed. 3. The Commissioners of Income-tax may also keep the Board informed through six-monthly reports of the number of applications for registration received u/s 12A, as per Annexure-III, to enable the Board to compile all-India statistics of religious trusts, institutions, etc. The first report will cover the period from the date of introduction of the provision till 31st March, 1974. The first report for this period may be submitted to the Board by 25th September, 1974 and the report for the six months ending on 30th September, 1974 may please be sent by 25th October, 1974.