Conditions for applicability of sections 11 & 12 - Section 12A - Income Tax - Ready Reckoner - Income Tax

Conditions for applicability of sections 11 12 - [ Section 12A ] The income of charitable or religious Trust is exempt u/s 11 12 if trust or institution fulfilled the following conditions, namely :- Application for Registration of trust or Institution Before 1st day of June, 2007 ( a ) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Principal Commissioner or Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA. where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,- ( i ) from the date of the creation of the trust or the establishment of the institution if the Principal Commissioner or Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons; ( ii ) from the 1st day of the financial year in which the application is made, if the Principal Commissioner or Commissioner is not so satisfied . After the 1st day of June, 2007 Till 31st March 2021 the provisions of clause (aa) of section 12A(1) provides after the 1st day of June, 2007 application for registration of the trust or institution made in the prescribed form and manner to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA. [ Section 12A(1)(aa) ] the person in receipt of the income has made an application for registration of the trust or institution, in a case where a trust or an institution has been granted registration under section 12AA or has obtained registration at any time under section 12A , and, it has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, in the prescribed form and manner, within a period of thirty days from the date of said adoption or modification, to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA. [ Section 12A(1)(ab) ] From 01.04.2021 The receipt of an application for registration of a trust or institution made under clause (a) / ( aa ) / (ab) section 12A(1) shall not be grant under section 12AA after 31.03.2021. [ Section 12AA(5) ] The person in receipt of the income has made an application for registration of the trust to the commissioner and such trust is registered under under section 12AB On or after 01.04.2021. Validity of registration specified in the section 12AB(1). Time Limit for granting of registration specified under section12AB(3). Time limit for making application for registration [ Section 12A(1)(ac) Read with Section 12AB ( Refer this chapter ) First Second proviso of Section 10(23C) ( Refer this chapter ) ] The provisions of section 11 12 shall apply from the AY for which registration is granted under section 12AB. [ Section 12A(2) ] Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made . The provisions of section 11 and 12 shall apply to a trust or institution, where the application is made under - (a) sub-clause (i) of section 12A(1)(ac), from the assessment year from which such trust or institution was earlier granted registration; (b) sub-clause (iii) of section 12A(1)(ac), from the first of the assessment year for which it was provisionally registered. Maintain books of Account [ Section 12A(1)(b) ] where the total income of the trust or institution as computed under this Act without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year,- the books of account and other documents have been kept and maintained in such form and manner and at such place, as may be prescribed the accounts of the trust or institution for that year have been audited by an Chartered Accountant before the specified date referred to in section 44AB and the person in receipt of the income furnishes by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars, as may be prescribed. Form of Audit Report [ Read with rule 16CC and rule 17B of Income Tax Rules, 1961 ] ( w.e.f. 01.04.2023 ) The report of audit of the accounts of (a) a fund or institution or trust or any university or other educational institution or any hospital or other medical institution which is required to be furnished under clause (b) of the tenth proviso to section 10(23C); or (b) a trust or institution which is required to be furnished under sub-clause (ii) of section 12A(1)(b), shall be in- (a) Form No. 10B where- the total income of such fund or institution or trust or university or other educational institution or hospital or other medical institution, without giving effect to the provisions of the sub-clauses (iv), (v), (vi) and (via) of section 10(23C), exceeds ₹ 5 crores during the previous year ; or the total income of such trust or institution, without giving effect to the provisions of sections 11 and 12 of the Act, exceeds ₹ 5 crores during the previous year ; or such fund or institution or trust or university or other educational institution or hospital or other medical institution has received any foreign contribution during the previous year ; or such fund or institution or trust or university or other educational institution or hospital or other medical institution has applied any part of its income outside India during the previous year ; (b) Form No. 10BB in other cases. Return Filling of such trust or Institution [ w.e.f. 01.04.2023 ] Return of trust filed u/s 139(4A) within the time allowed under section 139(1) or (4). [ section 12A(1)(ba) ] ITR 7 applicable for trust. Notes: - Exemption is available from PY in which application is made but exemption u/s 11 12 shall also be available for earlier AYs for which assessment is pending before Assessing Officer on the date of registration activity of Trust in earlier AY are same as those on the basis of which registration has been granted. No action under section 147 shall be taken by the AO in case of such trust or institution for any preceding AY only for non-registration of such trust or institution for the said AY, However, above benefit for earlier AY not available if trust had applied for registration it was rejected or registration once granted was cancelled.