Union Budget 2023-24 + FINANCE Bill, 2023

6. Specified violations under section 12AB and fifteenth proviso to clause (23C) of section 10

6.1 Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 amended the provisions related to application for registration by amending the first and second proviso to clause (23C) of section 10 of the Act, and clause (ac) of sub-section (1) of section 12A of the Act. Now the new trusts are required to apply for the provisional registration/approval which is valid for a period of 3 years or till six months from the commencement of activities whichever is earlier. The trusts and institutions under both regimes, already registered or approved, were required to furnish the application in form 10A for re-registration/approval. The process of granting the provisional approval/ registration for the new trusts and re-registration/approval for the trusts already registered is automated. Application is filed by the trust or institution on e-filing portal and provisional approval/registration or the approval/registration in such cases is granted in an automated manner without verification.

6.2 It has come to the notice that in some cases the form furnished by the trusts for provisional approval/registration and for re-registration/approval are defective and since the process of registration/approval/provisional registration/approval is automated, registration has been granted by the CPC. At present the approval/registration and the provisional approval/registration of the trusts can be cancelled by the PCIT/CIT for certain specified violations.

6.2 In order to rationalise the provisions, it is proposed to,

a) insert clause (g) in Explanation 2 to the fifteenth proviso of clause (23C) of section 10 of the Act to provide that the “specified violation” shall also include the case where the application referred to in the first proviso is not complete or it contains false or incorrect information.

b) similarly, it is proposed to insert clause (g) in Explanation to sub-section (4) of section 12AB of the Act to provide that “specified violation” shall also include the case where the application referred to in clause (ac) of subsection (1) of section 12A of the Act is not complete or it contains false or incorrect information.

6.3 These amendments will take effect from 1st April, 2023.

[clauses 5 & 9]

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Union Budget 2023-24 + FINANCE Bill, 2023