Can Form No. 10AB be filed now for permanent registration of trust ?

 

All the existing charitable Trust & institutions which are registered u/s 12A or 12AA of the Income Tax Act are now required to get themselves registered u/s 12AB. For this, they have to make the application in Form No. 10A on or before 31^st March 2022. All such trusts will get the permanent registration in Form No. 10AC U/s 12AB which will be valid for 5 years.

Let us know more about it:

1. All the new trusts will also be required to make the application in Form No. 10A on or before 31^st March 2022. All such trusts will get the provisional registration in Form No. 10AC U/s 12AB which will be valid for 3 years only. Finance act 2020 has introduced a new concept of provisional registration to tackle the practical issue of difficulty in granting registration or approval before the start of actual charitable activities by a trust or an institution.

2. All new trusts who have got the provisional registration & want to claim the benefit of application of income u/s 11 and u/s 12 are mandatorily required to obtain registration under the Income Tax Act by filing Form No. 10AB. Trust which is registered as per new law u/s 12AB of the Income Tax Act is required to make an application for re registration u/s 12AB in Form 10AB.

3. Form 10AB can be used for registration by entities that is provisionally registered u/s 12AB of the Income Tax Act as per the new law and the period of approval is due to

• Fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or (v) or (vi) or (via) of section 10(23C) approved under the first proviso effective from 1st April 2021

• Trust/Institute registered under section 12AB

• Institution/fund approved under the proviso of clause (vi) of section 80G (5) effective from 1st April 2021.

4. It may be noted that Form Nos. 10AB has to be furnished electronically online through digital signature, if the return of income is required to be furnished under digital signature or through electronic verification code in case non availability of Digital Signature. Form Nos. 10AB must be verified by the person who is authorised to verify the return of income under section 140, as applicable to the applicant. Same is the case with Form NO. 10A for provisional or permanent registration.

5. Where a trust is provisionally registered u/s 12AB of the Act the Time limit for making application for registration u/s 12AB in Form 10AB shall be earlier of the Following 6 months prior to the date of expiry or Within 6 months of commencement of activities. The order for re registration under section 12AB shall be passed by the PCIT/CIT within a period of three months from the end of the month in which the application is filed. This registration shall further remain valid for a period of 5 years.

6. In case of a newly registered Trust, the trust will be granted provisional registration and that too for a maximum period of three years. At the end of the first three years, the trust needs to be converted to normal or final registration which shall have a validity of 5 years. This registration shall remain valid for a period of five years and to be renewed after every 5 years as per provisions of the act for an existing trust. Further, there is no provision so far in the Act to extend the period of three years further. Hence, the Trust must commence the charitable activities within this period. Since the application for normal registration is required to be made within 2.5  years, charitable activities must be commenced by that time as while granting the normal provision u/s 12AB this factor will be seen.

Can Form No. 10AB be uploaded now?

The question now arises as to whether all the trusts who have been granted the provisional registration in the FY 2021-22 can apply for permanent registration in Form No. 10AB now?

It may be noted that the CBDT has notified Form NO. 10AB but the utility for filing the Form No. 10AB has not yet been provided at the income tax portal. As a result, the trusts which are granted provisional registration cannot apply for permanent registration as of now.

Till the utility is released by the CBDT, the form No. 10AB cannot be uploaded despite the fact that the trust has already commenced the charitable activity or despite the fact the trust is eligible to apply for permanent registration.