URGENT-TAXATION QUERY

please tell regarding the nature of activiities of your society ..............

Hi Rahul Sec.12A clarified that the charitable institutions that have not taken income tax registration for claiming exemption will be required to pay tax on their net income if they fail to seek registration acc to prov of Act.. As per the new amendment, these institutions will be eligible for tax exemption only from the date they make application under the Income Tax Act. But acc to Rule 17A & Rule 17B The expression “before expiry of the period in proviso (i) of clause (a) of section 12A” requires sufficiency of reasons which prevented the person from making the application for registration within one year as required, and not the reasons for the period beyond the prescribed period of one year. What the authority has to see is whether or not there were sufficient reasons which prevented the person from making the application within the prescribed period and not the total period after which the application was made. Further, refusal to condone the delay in making the application for registration entails consequence of the denial of the benefit of the provisions of sections 11 and 12 from a date anterior to the date from which benefit is granted in the financial year in which the application is made. Since the consequence of refusal has the effect of denial of benefit, principles of natural justice require an opportunity of hearing before an order in this behalf is passed on the ground that the reasons furnished by the applicant were not satisfactory - Society of Divine Providence v. Union of India [1998] 146 CTR (MP) 417.

Rahul hope your query is solved