Taxation of society

This query is : Resolved

Shiva Bhardwaj (Querist)
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12 February 2017 NOTE FOR OPINION DETAILS OF THE SOCIETY
It is a society registered in 1996 under the Socities Registration Act, 1860.
The Trust is managed by Trustee under supervision of President etc .
It receives following income :
1)Donations from Peoples on Various Functions (Likje Basant Panchmi, Namdev Jayanti) which are credited to P/L account.
2)Bank Interest on Bank Saving Account is credited to P/L account
3) The Society also receives Grants from Ministries for specified Projects. The same are shown in Liability side. The expenses incurred for the Project are debited to Grant account. The excess expenditure incurred by us for the Project over and above the grant amount are debited to P/L account as our contribution.
The above Society is not registered u/s 11, 12 of the Income Tax Act and has never filed its Return of Income, nor deducted any TDS till date. It doesnot have any PAN Number.
QUERIES FOR OPINION
The Society wants to regularize the matter and your expert opinion is sought on the following matters.
1)Whether it would be assessable as AOP .
2)Whether its Taxable Income would be Net Profit/Loss as per P/L account or Gross receipts as per P/L would be the Taxable Income.
3)Whether Grants received would form part of Turnover for purposes of 44AB.
4)Whether Grants Received for Building FUnd credited to Capital Fund in B/S would also be included in Taxable income
5) What is the best alternative and what can be the worst consequences in the above circumstances.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 February 2017 1 Yes it will be assessable as AOP.
2 Gross receipts as per P&L will be taxable income.
3 It is not a business entity hence 44AB not applicable.
4 Grants received form Govt for building fund will not be considered as taxable income.
5 Register the society u/s 12aa is the best alternative.

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