WHETHER AUDIT U/S 44AB APPLICABLE TO TRUST

[CHAMAN BANTHIA]

ASSESSEE IS AN EDUCATIONAL TRUST HAVING GROSS RECEIPT(SCHOOL FEES) EXCEEDING 1 CR. BUT NOT HAVING REGISTRATION U/S 12AA. THE TRUST HAS NOT GONE FOR OR APPLIED FOR 12A. THE AUDIT OF ACCOUNTS BY A CHARTERED ACCOUNTANT HAD BEEN CONDUCTED BUT HAS NOT UPLOADED THE FORM 3CB-3CD.

Q(1)- WHETHER TAX AUDIT U/S 44AB IS APPLICABLE TO AFORESAID TRUST?

Q(2)- WHAT IF AFORESAID AUDIT WAS CONDUCTED AFTER DUE DATE & FORM 3CB-CD NOT UPLOADED?

ALSO THERE WERE CONTRIBUTION FROM TRUSTEES TO THE EDUCATIONAL INSTITUTION(TRUST).

Q(2)- WHETHER CONTRIBUTION IS TO BE INCLUDED WHILE CALCULATING GROSS RECEIPTS?

Q(3)- WHETHER THE CONTRIBUTION CAN BE CONSIDERED AS CORPUS FUND?

Q(4)- IS CORPUS FUND(IN THIS CASE CONTRIBUTION)TAXABLE AS INCOME?

MY CONTENTION - AS AUDIT U/S 44AB IS APPLICABLE TO ASSESSEE HAVING INCOME FROM BUSINESS/PROFESSION. IN THE ABOVE CASE ASSESSEE IS RUNNING AN EDUCATIONAL TRUST SO WE CAN IGNORE TAX AUDIT.

CONTACT NO. 9680003049

[DR.MARIAPPAN GOVINDARAJAN]

IN my view tax audit is not applicable since the trust is not carrying any business.

[CHAMAN BANTHIA]

Thank you sir , what about contributions ?

[CASusheel Gupta]

Contribution can be considered as corpus only if it is with specific direction that it shall form part of corpus.

Corpus fund is not taxable (Refer to section 11(1)(d).

CA Susheel Gupta

9811004443

[CASusheel Gupta]

You need to file form 10 and 9A for accumulation and audit report in form 10B

CA Susheel Gupta

9811004443

[CHAMAN BANTHIA]

Thank you sir.

AI Summary

Tax audit applicability to trusts: non business educational trusts generally outside audit scope; contributions require corpus designation. Tax audit under section 44AB applies based on whether the trust carries on a business; a non business educational trust is generally outside the tax audit requirement despite large receipts or lack of registration. Trustee contributions count as corpus only if specifically designated as such, and designated corpus funds are not taxable; appropriate accumulation filings and prescribed audit reports are required to regularise compliance.