Vishwa Kalyan Charitable Trust was formed on 1st March, 2017. It filed with the Commissioner of Income-tax (Exemption) its application for registration as per section 12A on 31st August, 2019 explaining that for good and

CS Professional · Direct Tax Law & Practice · PYQS · December 2020
Vishwa Kalyan Charitable Trust was formed on 1st March, 2017. It filed with the Commissioner of Income-tax (Exemption) its application for registration as per section 12A on 31st August, 2019 explaining that for good and sufficient reasons, it could not file the application so long after its formation and thus the registration to be granted since 01.03.2017. The trust for the accounting year ended on 31st Mach, 2020 earned an income of ₹5,70,000 and has claimed that the income earned by it be treated as exempt under section 11 of the Income-tax Act, 1961. Explain with brief reasons in the context of the provisions contained under the Income Tax Act, 1961: by which date the application for registration should have been filed by the trust for claiming benefit u/s 11 and 12 and whether such an application could have been filed before the formation of the trust?

Answer & Explanation:

The application for registration under section 12A of the Income tax Act, 1961, can be filed at any time after formation of the Trust and the provisions of sections 11 and 12 would apply from the assessment year relevant to the financial year in which the application for registration is made. No, the application for grant of registration under section 12A cannot be filed before the formation of the trust. However, where registration has been granted and on the said date assessment relating to the earlier assessment years is pending, then the benefit of sections 11 and 12 shall be available in respect of income derived from property held under trust in those years, provided the objects and activities of the trust remained unchanged.

Topics: Exemptions and Deductions

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic