CBDT vide circular no. 6 of 2023 has provided various relief to charitable trust. Certain due dates has been extended, and various other relief has been provided where trusts were facing genuine hardship. The circular also clarified the various issues regarding the pending and / or rejected application for registration of trust. Brief of the circular is given below:
- With effect from financial year 2021-22 amendment was made vide Taxation and Other Laws (relaxation and Amendment of Certain provisions) Act 2020. As per the amendment all the existing and new trusts/institutions were required to apply for fresh/provisional registrations.
- Application for registration were to be submitted in form 10A and 10AB based on the type of registration.
- CBDT had extended the due date to apply for such registrations from time to time. The last extended due dates for form 10A was 25.11.2022 and form 10AB was 30.09.2022.
- In order to provide relief to the stakeholders due to genuine hardships faced by them, CBDT has further extended the due dates for making application for registration to 30.09.2023.
- The above extension has been granted only in case of trust who were having valid registration and have to revalidate their registration and also to those trusts who have been provisionally approved and have to apply for registration at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities.
- It is important to understand that the said extension has not granted to those trusts who have to apply for new registration and whose registration were due to expire.
- Additionally, relief from applicability of Section 115TD has been also been granted. Section 115TD provide that the accreted income of the trusts not applying for registration/ approval, within the specified time, shall be made liable to tax This amendment has come into effect from 01.04.2023 and therefore app lies to assessment year 2023-24 and subsequent assessment years.
- For trusts in whose case extension has been granted and where such application is made by the said date and registration/approval is granted, the provisions of clause (iii) of sub-section (3) of section 115TD of the Act shall not apply on account of delay in making application.
- Time to furnish form 10BD (Statement of donation accepted by trusts) and form 10BE (Certificate of donation) for donation received in financial year 2022-23 has been extended to from 31.05.2023 to 30.06.2023.
- As per the amendment made in budget 2023, form for accumulation of income (Form 10) and form for deemed application of income (Form 9A) are required to be furnished 2 months prior to the due date of furnishing of return of income. if furnished after the said date, accumulation/deemed application shall be denied. Considering the fact that accumulation/ deemed application can be determined only after computation of income is finalized, it is difficult to file said form two months prior. It has been clarified that the accumulation/deemed application shall not be denied to a trust as long as the statement of accumulation/deemed application is furnished on or before the due date of furnishing the return as provided in sub-section (I) of section 139 of the Act.
- If application is filed in form 10AB after the due date i.e. 30.09.2022 and order has not been passed yet, such pending applications made shall be treated as valid application. However, If order has been passed rejecting the registration on account of sole reason of delay in filing application, trusts are eligible to make fresh application.
- If application is filed in form 10A after the due date i.e. 25.11.2022 and such application is pending. An option to surrender provisional application of form 10A will be provided and such trust can make new application in form 10A.