Dear Sir
ARS Education Trust was established on 13-12-2013. We applied for 12A & 80G to the Income Tax Commissioner (Exemption) of Hyderabad. She rejected our application asking us to limit the objects in our Trust Deed. She also directed us to include the IT Provisions in the Deed as an amendment. However the local Sub Registrar did not agree to make amendments to the Deed. Will you please clarify what is to be done to get the approval for 12A & 80 G in this situation?
Purna Rao
ARS Education Trust
Dear Mr Pure Ray,
From what you have stated it is amply clear that the Honb. CIT (E) has travelled beyond his jurisdiction. In registration proceedings what she/he has to satisfy herself/himself is clearly mentioned in Sec.12AA -a.Objects of the Trust are charitable b.activities if started are genuine.Based on his conclusions on the twin issues either he has to register the trust or refuse to do so with detailed reasoning thereof.Thus the scheme of registration leaves no scope for the CIT to direct amendment in Trust Deed.He has to either grant registration or refuse it if not satisfied through a speaking order and under no circumstances he can bring anty other option in the decision matrix.There are clear fetters on her/his powers built in the Section itself which has been affirmed by the courts time and again.Therefore in my opinion IT AT is the only answer to the issue.Further once the settller has defined the objects is it open to amendment? In my opinion answer is a clear no.
comments by Mr. Aveenish Mitta is right. Nothing needs to be added in my opinion.
I think both Sudhir Chandra and Avneesh Matta have given very categorical answers. Thus you can go in for appeal. Infact as Mr Chandra has stated that the Commissioner Income Tax (Exemption) can put any specific condition in its order for registration. It can either reject the application for registration or issue with conditions, but cannot hold the order indefinitly.
what needs to be exempted and to what extent it needs to be exempted has to be elaborated before any exemption is to be sought. Necessary provisions may be part of some provisions that need to be elaborated or clarified.
Dear Sir,
You should again approach the IT authority along with the Sub registrar’s letter stating that we are ready to do the needful in the matter but sub registrar is not permitting us .
N.D. Panchal
Chief Accounts Officer
website:www.ceeindia.org
Dear Mr Purna Rao
As regards the legal position, there is nothing in law to limit the object clause or force inclusion of certain clauses pertaining to income tax.
This can be ensured by the Income Tax Commissioner (Exemption) himself by putting the same in conditions granting Section 12A registration
regards
sudhir chandra
I am of the view that the direction of CIT(E) is beyond jurisdiction. For registration u/s 12A only two aspects need to be examined by CIT – one, the objects are charitable purpose under section 2(15) and two, the activities are genuine. Even if there are no activities having been started, the laid down ITAT/HC law says that the registration cannot be rejected. I am sure there has been a speaking order having been issued by CIT;and, if the order states the reasons as mentioned by the querist, there is sure case winnable at ITAT. CIT cannot limit the objects of the trust, if all the objects fall within the parameters of definition of Charitable purpose nor can it seek modification in the trust deed. Adherence to section 11, 12 and 13 are required to be examined at the time of tax assessment and not for registration.
Registration should possible. One may get registration first.
Dear Mr. Purna Rao,
You should have included at the time of registering the Trust deed, the the basic IT provisions mandatorily required for any organisation which would ultimately seek exemption under sections 12(A)(a) and 80(G) of IT Act. What you have to do now is to register a supplementary deed with the same Sub-Registrar adding the IT provisions required, to earlier deed and then approach the IT authorities.
S.S.Shiva