Exemption u/s 11(1)(d) Corpus Donations to Charitable Religious Trust

[LALIT MUNOYAT]

1) The Trust was created on 26-12-2013 as per PAN.

2) Application for its registration with Office of the Charity Commissioner Mumbai was made in Jan 2013. The registration was granted on 15-04-2013.

3) Application for exemption certificate u/s 12 AA was made on 15-10-2013 and the registration approval was received on 21-04-2014 making the registration effective from 15-10-2013.

4) Return of Income for the A.Y. 2013-14 was filed on 31-03-2014 claiming exemption of corpus donations of ₹ 82 Lakhs. By intimation u/s 143(1) the exemption was denied because registration was not received upto 31-03-14 and corpus donations were fully taxed.

Point of Issue

a) Is the trust eligible for exemption for A.Y. 2013-14 u/s 12A(1)(aa) for registration which is effective from 15-10-13; If not

b) Is the Trust eligible for exemption u/s 12A(2) read with First Proviso which provides that

i) The exemption is available w.e.f. 1st day of April 2014 or

ii) The exemption will also be applicable to A.Y. 2013-14 if assessment proceedings for A.Y. 13- 14 are pending before the Assessing Officer as on the date of such registration.

iii) Can it be said that as on the date of such registration assessment proceedings for A.Y. 2013-14 were pending particularly when the Return of Income was filed only on 31-03-14

AI Summary

Registration effective date for charitable trust determines tax exemption eligibility when assessment proceedings status is contested.
Trust applied for and subsequently received registration made effective from an earlier date; exemption for corpus donations under section 11(1)(d) was claimed for the assessment year but denied because registration was not received by the return filing date. The legal issue is whether section 12A(1)(aa) or the first proviso to section 12A(2) permits exemption for that assessment year where registration is effective from an earlier date or where assessment proceedings were pending on the registration date when the return had been filed on the last day of the year.