CBDT Clarification regarding Form No 10AC issued till 03.06.2022 for provisional registration/Approval u/s 12AB or 10(23C)
CBDT Clarification regarding Form No 10AC issued till 03.06.2022
The Finance Act, 2022 has inserted sub-section (4) in section 12AB of the Income-tax Act, 1961 (the Act) allowing the Principal Commissioner or Commissioner of Income-tax to examine if there is any “specified violation” by the trust or institution registered or provisionally registered under the relevant clauses of sub-section (1) of section 12AB or sub-section (1) of section 12AA.
Subsequent to examination by the Principal Commissioner or Commissioner of Income-tax, an order is required to be passed for either cancellation of the registration or refusal to cancel the registration.
Similar provisions have also been introduced in clause (23C) of section 10 of the Act by substituting the fifteenth proviso of the said clause with respect to fund or institution trust or institution or any university or other educational institution or any hospital or other medical institution referred under sub-clauses (iv), (v), (vi), (via) of this clause and which have been approved or provisionally approved under the second proviso to the said clause.
The above amendments are effective from 1st April, 2022. In addition to the specified violations referred above, the power of cancellation has also been granted under sub-rule (5) of rule 17A and sub-rule (5) of rule 2C of the Income-tax Rules, 1962 ( the Rules) to the Principal Commissioner or Commissioner authorised by the Board.
The CBDT has issued Circular No. 11 of 2022 dated 3rd June 2022 which relates to cancellation of registration/approval or provisional registration/approval in the case of “specified violation”.
The definition of “specified violation” for the purposes of fifteenth proviso to clause (23C) of section 10 and section 12AB of the Act has been provided in the respective clause and section. The said definition, inter-alia, includes instances where any activity of the fund or trust or institution is not being carried out in accordance with all or any of the conditions subject to which it was approved/ provisionally approved or registered/provisionally registered.
As per the new procedure for approval/registration of charitable entities, which was notified vide Notification No 19/2021 dated 26.03.2021, the entities seeking re-registration/ approval or provisional registration/ approval (fresh) are required to file an application in Form 10A. Further, the order granting registration or provisional registration or approval or provisional approval is made in Form 10AC subject to the fulfilment of certain conditions.
In view of the amendments made vide Finance Act, 2022, the conditions subject to which the registration/approval or provisional registration/ provisional approval was granted to trusts and institutions need to be revised to align the same with the amendments made by Finance Act, 2022.
In view of the above, CBDT has clarified that,-
(i) the six conditions contained in Form No. 10AC, issued between 01.04.2021 till 3rd June 2022 shall be read as if the said conditions had been substituted with new conditions as provided with effect from 1st April, 2022
(ii) where due to technical glitches, Form No. 10AC has been issued during FY 2021-2022 with the heading “Order for provisional registration” or “ Order for provisional approval” instead of “Order for registration” or “ Order for approval”, then all such Form No. 10AC shall be considered as an “Order for registration or approval”. Also it has been provided that in cases where Form No. 10AC has been issued under various given section codes, the word provisional shall stand removed.
Download CBDT Circular No. 11of 2022 Click Here >>