 to share a knowledge which normally as a lawyer also we keep on understanding and those who are interested to understand what is the process of registration of charitable trusts and societies which not I would say off late but has always been an important aspect which one wants to understand and that is why we had requested Rano Jan ma'am to share her knowledge and tour perspectives number one what is the procedure for doing the registration and number two in the part two we will be taking things forward to understand the legal nuances in the same and as you all know today's resource person is not only a speaker who takes things forward in a simplified manner but she's equally well versed in writing her articles are published and which are well received be that as it may needless to add that she's also a profit advocate who has created her niche after committing the office as an ITAT member and without taking much time I would request Rano Jan ma'am to take things and make us understand in a simplified manner which she's known for what do you want thank you Vikaal ji thank you very much and good evening everyone so thank you very much beyond law clc for inviting me here it's a very elite forum and I know whoever comes here I am really happy that you have divided it into two parts because I am happy that you have divided it into two parts because I am really happy that you have divided it into two parts because as everyone knows that our income tax act that is a self-contained code there are procedures and substantive laws in it so the taxability of charitable trust is also of its two aspects some are procedural some are substantive so today we will talk about the procedure of the registration procedure and the taxability of substantive provisions will be done in the second part thank you very much now see when we talk about charity so the importance of charity which is the importance of charity is probably from our generation our generation means people who are in this world no one can understand more than them this pandemic is in our life so we have not seen it in generations and hopefully we will not see it in the future so maybe the times we have seen and at that time the importance of charity no one can understand it now everyone will agree that when the pandemic was going on so it is not just a poor person or the people who cannot afford anything they were looking for something or they needed some charity in fact the big people who are called well connected rich people they were also looking for charity to have some bed or room to have oxygen in a hospital or ventilator so we all understand the importance of charity so our government and our constitution have always been like this we are a little poor country and developing country so we have always had a different importance of charity so our constitution from the time till now the charitable trusts or societies or any other charity work they are given some benefits that you are doing a very good job and it benefits our society so we are giving you this benefit so the Income Tax Act also always we will also see the Act of 1922 so some benefits are given to charitable trusts and societies I am talking about trust and societies because these are the two entities they have a lot of charity either they have societies or they have trust and in Income Tax Act they have a different place I will tell you later so how important is charity we know that our government and the government has made a lot of provisions in which whatever charity is being done they will be given some benefits in fact it starts with the fact that the government has always believed that if you do charity then we will not take tax from you whatever income you will get whatever money you will collect then you apply for charity we will not take tax from you but you will also have to believe that wherever you get more benefits you will get some mistakes in which the Income Tax Act tries to misuse it so what happens is that the benefits given to the charity there are some mistakes now the Income Tax Act what does the government do they come for some amendments and you will have to believe that whatever money you will get the Income Tax Act is the most complicated subject of charitable trust so let's start from here look charity is a structure of Income Tax Act in which way the charity will be given the benefits so there are two major parts of it in section 10 there is an exemption section 10 is the section in which there are exempt incomes in which situations your income will be exempt an example is the Agricultural Income if you don't go into much detail then your agricultural income will be exempt from the tax regime so there are some benefits for that we don't have to do much special things there are some sections where you will get exemptions and you will have to comply with the conditions and you will get exemptions there is a section 10-23 C in which basically charity can be of many types education can be of medical relief and there are many things the definition of charity is in section 2 in clause 15 there is definition which includes education and medical relief but in section 10-23 the benefit you get that is only for there are many more but for our limited purpose for today's calibration if you are doing educational activities and you are existing only for educational purposes you are not doing anything else you are only doing education so in any case you are doing charity and you will get some of its benefits I will go to that because it is very important to understand and I always feel that all our professionals get very confused although it is very simple but after going to one level we get less and less and what is going on in our mind we keep on going but there are some things that I will tell you quickly apart from that there is section 11 in section 11 in general there are many conditions there are compliances there are many provisions there are many things but basically in any charity the exemption in section 11 there are rules and regulations but before going to section 11 before taking the benefit of section 11 you are supposed to be registered under section 12A first 12A then 12AA in the last year the government took very sweeping amendments in which in the procedure in which 12AA the procedure of registration was going on they took very heavy changes why they took changes there are many reasons I will discuss with you first I will talk about 1023C I just wanted to tell you why registration how and when you need to know that without registration you cannot take the exemption of section 11 and in section 10 I was talking about 1023C you can only take education and medical institutions those which are only existing so suppose if you are doing any other charity then you do not get the benefit for that you have to take the exemption of section 11 and to take the exemption of section 11 you need to be registered under section 12A you need to be registered under section 12A now quickly after taking 2 minutes I will talk about section 1023C in which there is confusion in 1023C there are some clauses which cover educational activities this is section 1023C 3AB 3AC 3AD 6 and 6A I will keep my derivation here there is something else but it is not related to education or medical so these are 6 clauses in which you get the benefit if you are doing this who gets it only those who are working for medical activities or who have university or college or those who are working for medical activities and who have a hospital and they are solely existing for these purposes they are only existing for educational purposes or for medical purposes so now the 6 clauses which I have said are very easy to understand 3AB I will talk about institutions which are existing solely for these purposes they exist for education and which are substantially financed by the government the government gives them money and says that you work for education school, college, university so these kind of institutions they don't need any formality no registration no approval no audit no return every year exactly on these lines I have talked about educational institutions medical institutions 10, 23C, 3AC even in that if you are existing solely for medical purposes and you are substantially financed by the government you will get the exemption after that 3AB and 3A 3AD is about educational institutions 3A is about medical institutions but these institutions which are not financed by the government they are not substantially financed because they have been talked about their turnover or their receipts are not more than 5 crores in a year earlier there was 1 crore in the last budget because 1 crore is very less in today's budget so if your total receipts are not more than 5 crores then you will get 10, 23C, 3AD and 3AE for that you don't have to do anything you don't have to take any approval you don't have to do any registration and you don't have to audit you just have to return return of income every year that is done 10, 23C, 3 6 and 6A 6 means DI those who are small Roman people 10, 23C, 6 and 6A this is almost structured 6 is about educational institutions and 6A is about medical institutions but these are those institutions they are existing solely for these purposes but their turnover is more than 5 crores now they say to take these benefits from CIT or CIT you have to take approval this is called approval not registration so here in these 4 clauses there are only 2 clauses in which you have to take approval and the changes that I was talking about last year a lot of sweeping changes have come in the procedure the changes in registration the same changes have come in the approval that is why we need to know this now coming to the main part as I said first there were 12A then 12AA in which you have to take registration if you have to take an exemption then in that till now 12AA were registered normally trust or societies now from the last budget it has happened that from now on no one will get the registration of 12AA that section has been substituted by section 12AAB now you have to take the registration of 12AAB it is fairly good we understand this but the biggest thing of this amendment is that in the last year the 12AA societies have also been told that you have to connote yourself this is 12AAB meaning after 1st April 2021 no trust can work in 12AA and take an exemption every trust has to get it registered under section 12AAB this came last year last year from 1st June 2020 it will be noted but due to the pandemic as the extension has been done it has reached from 1st April 2021 after 1st April 2021 12AA no registration of 12AA no registration of 12AA so two things have come out if you have already registered in 12AA then you will have to convert yourself to 12AAB and if you are taking the new registration then you will take it in 12AAB that is not a big deal the procedure that is a little complicated it gets a little long because in different situations there are different issues but before that why do you change the procedure what do you keep from the procedure my registration is there it has reached in 12AA give an exemption in 12AA because that registration has been given it goes to those who are doing charity they are doing charity give them an exemption but there were some issues which we never felt an issue as a council because of this side many things were settled many things were settled many things were settled so we felt but in the mind of the government there were some points because of which the amendment as I will tell the amendment you will understand but I want to tell you in 3-4 words my study because of which first of all you had to apply for registration you had to apply for registration you had to give a certificate you had to give a registration number but in today's date if this is asked from the department how many registered trusts are there how many registered societies in the section 12AA then maybe this data is not available no one can say that everything was going on physically manually all the data was manually so maybe you will believe that a big vision is in the mind of the government that everyone is online because you know in the income tax department there is a high-five everything is high-five there is a lot of tax the assessment is faceless the appeal is faceless and now it is going to be faceless so maybe when everything is online then why not this so maybe there is a big vision that all the data in online format or a comprehensive database will be available to the government so this is the reason which has been said that the old trusts will also convert themselves now some issues that were going on that were a little contentious they settled according to me but maybe the government did not settle you have also been addressed by this amendment now see what would have happened we made a trust trust includes society so I will not do it again we made a trust for the charity we used all the documents but now we are not able to work and we go to the principal CIT that sir give us registration so it was a lot that he refused CIT because he did not start his activities from now how to give you registration so because these types of orders refusal orders so we would appeal directly to ITAT go to ITAT go to dry court so most of the courts were holding that activity started so what happened the objects are charitable until you give them registration ATG approval registration who will give them a donation credibility before giving everyone a donation then we will start there are many such judgments that if the activity has started then see its gender because two aspects were to be checked CIT or principal CIT before giving registration the objects are definitely charitable and the other your activities are gender but if the activities are not happening then it is not gender this was going on so maybe the government or department came in the mind that this is wrong now we will start the activity after that we will give registration but that our issue will be unheard of that first you give two registration then I will start work then people will come to me so they have brought a big change in the procedure that when you ask for registration for the first time then we will not give you final registration we will give you a provisional registration for three years after that when you start work then I will tell you in the timeline you start work and then we will ask you to give you final registration this was the reason this was the second reason there were some cases which people do income tax they might have read it I always give one example there were some schools which are some private schools which had trust or society but in some other law like in psycho education economically weaker section children have to give admission that every school 5% or 10% whatever they have to give economic EWS to the children but there were some schools which could not comply and CIT did not give registration or their registration was cancelled you are not following you are not complying with RTE Act then you cannot get registration so the courts will not say that you are not working as an income tax officer you are not working to see if they are complying with RTE Act or not they will see the act and you cannot get their registration so the income tax officer thought that they will keep checking so they added some provisions apart from that there was one very important thing which I have told you in the beginning in 1023 C educational and medical people get relief in 11 they get any charity which also includes education and medical so medical and educational both of them could take the exemption both of them could take the benefit so what people had done like I am a school so in 1023 C I took the approval and I registered myself in 12A so I kept both of them definitely I could take one benefit in one year so I had both of them and I knew that the benefit would be because there are some small differences that we will discuss later in 1023 C and 12A so the dual registration which they say they could have taken the registration now you will get one and more than one you cannot take two you will get one you can take only one so one but you can do it so these are some things that I feel when I study that this is the reason why so many big amendments and the biggest thing is that the old trust you have to register yourself you have to renew your registration now look first of all it is very important to understand that after 1st April every trust if it is existing then you have to register yourself in 12AB and the new ones you will get in 12AB and when you take the first registration in 12AB then you will get provisional registration which will be only three years and then you can convert it in the final registration so let's go ahead there are six situations and we have to search six situations how to register first the existing trust which existed even before 1st April which was registered in 12AB because you have to convert yourself in 12AB because last year last year there was an extension there was some more date in today's date date is 30th September till 30th September you have to fill a form online that is 10A form which you have to fill there will be some details I will tell you that then you will get registration of 12AB in which you will get digital number and in 12AB please take care please remember that the existing trust they will not get provisional registration because they have already crossed all the hurdles it has already been established that they are working for charity their objects are charitable so you don't have to check it again now I would like to tell you some timeline as I said you applied for an emergency you will get 12AB for 5 years which will be final it will not be provisional for this no condition will be checked it will be automatic you have to do some formalities like you have to put some rules with 10AB but you will get it and you will get the registration from that year which year you applied for conversion you will not have any loss there won't be any gap between earlier registration and this registration and the order approval it has given the power of rejection to the principal CIT but I believe that it is almost automatic if you have given some wrong information then you can ask it later so the order the approval of the registration will be given to you within 3 months from the end of the month through which you file the application it is easy to remember because it is the first time the change is coming so many trusts will be applied so the department will take more time so they have given 3 months otherwise it is not necessary there will be one situation one situation if you have to take the first time registration first year after 2021 if you have to take the first time registration so now you won't get 12AB you have to take the registration so for that B form will be 10A that is the form 10A and 10B I will come later in today's date 10A is more relevant if you have to make the first time registration then you have to fill 10A and for this time limit they have given at least one month prior to the commencement of previous year relevant to the assessment from which approval is sought which assessment year you want approval the day you put your application you will get that assessment year now you know that is why it is written because the first assessment year it is not necessary to start from the first April it can also be started in between so at least one month prior to that you apply because you are making a trust you know that if you start after one month then you apply in one month and you will get 12AB registration but because this is the first time you have to take the registration so you will get provisional registration and only for 3 years and in this you won't get much conditions because there is nothing in it so it is given for 3 years so you won't get much provisions because there is not much checking it is almost automatic so the order will come within one month the month you put your application within one month you will get this order this is the second situation now the third situation if you assume that you have provisional registered definitely after the first April because before the first April you won't get this when you are provisional registered and you have to convert it in the final ultimately you will have to take the final so when you have to convert it in the final so at least 6 months from the at least 6 months prior to the expiry of provisional approval when your provisional approval is going to end 6 months earlier or within 6 months from the commencement of activities which I told you earlier without activities you will get provisional registration but when you start the activity assume that you have started this activity so you need final registration so within 6 months you can apply and if you can't start activities in 3 years so 6 months earlier when your provisional registration expires then you need to apply so you will get fresh registration and when you get fresh registration after provisional then you will get 5 years at that time all your compliances will be checked because it is the final registration now it is written that what conditions it will check as you know objects will be checked what are your charitable nature your activities generalness so it will be checked one more thing compliance of requirement of any other law which I gave you as an example RTE compliance you are doing you can check this too you need to apply for final registration so there are many compliances many things are going to be checked and you can also ask for a lot of benefits which are not relevant in today's date you will get the exemption from where you want to get provisional so you will not get any gap and the order of approval or rejection is within 6 months from the end of the month in which you apply for final registration now why are these 6 months given because you need to check many compliances so these 6 months I will tell you one more situation if you have already registered as I am a old registered trust and I have converted you but now after 3 years of provisional you will get 5-5 years of registration you will not get perpetuating which you used to get so once you register until commissioner will feel that you are doing an understatement and he will cancel your registration before that you do not have to do anything but now in income tax you will have to renew in every 5 years why you will have to renew the reason for that is that after 5 years there will be a supervision after 5 years if you are already registered then after 5 years you will renew it you will get a time limit at least 6 months prior to the expiry of period after 5 years you will get 5-5 years after 3 years you will get 5-5 years depending on whether you will get it or not you will get all the compliances now conditions will be checked here objects will be checked your generalness will be checked any other lobby will be checked all things will be checked here no gap will come if you will get it and order of approval or rejection will be given within 6 months from the end of the month in which you apply you will get it now this situation has become one situation which says if you have changed in your object clause what does it mean if you have modified or if you have adopted a new clause in this case you will get your registration again you have to inform them so for this they have given a time limit within 30 days from the date of adoption or modification the day you have changed any change you have modified it you have adopted it within 30 days you have to apply and for 5 years you will get your registration and for this 6 months from the end of the month in which application was received time which order of rejection or approval you will get it and no gap will come from that assessment you will get it now the dual registration which I was talking about it is also written in the Act it is perceived in a situation in section 11 we get an exemption which I mentioned at the beginning there is a sub section in section 7 there is a proviso in which they said as I said now you cannot keep the dual registration the registration is also written and the 23G dual registration is also written so in that proviso I am teaching it that such registration means registration in section 12 A, A and B shall become inoperative from the date on which the trust or institution is approved under clause 1023C as the case may be and the date on which the proviso has come into force which ever is made I explain to you the language is a little easy it is written that if in today's date or 30th March 2021 you had 1023C you also had 12A, A but now what will you get 1A how will you get 1A they said 1A you have 12A, A it has been inoperative so you have only 1023C so you have to renew it okay but now see the choice is mine when I have both then what is the renewal as I said 12A, A has to be converted into 12A there is no new section of 2023C it is necessary to renew it for existing trust and societies so now I have both so the call is mine that I want to keep 1023C or I want to keep 12A converted into A so they gave a procedure they said 1A your 12A will end it will be inoperative you will have only 1023C but ahead you can take 12A you can take it and you will get it from where you got 1023C renewed I think I am making myself clear so I will tell you practically if on 31st March I have both approval registration so my 1st April 12 A is over I have 1023C so first you have to get it renewed after that if 1023C if you are okay with 1023C continue with it you can continue with it but if you have decided that you will take 12A then what you have to do after taking 1023C so that will not be discontinued things apply for 12A and you will get 12A with effect form where you will get 1023C so there will be no gap so practically my advice will be those who have both first get 1023C renewed and quickly apply for 12AB which you will get from the beginning if you want to get 11A if you want to get 1023C then what then you just have to get it renewed so these are the 6 situations which the government the government the income tax act the government they have perceived and they have given the whole procedure now there are some other situations if I before March 31st before 2020 until March 31st until March 31st there was an application which was registered in 12A which was not disposed of pending but from 1st April when 12AB came will I have to return the application? no the old applications because they were not disposed of before 1st April so it will be believed that you have filed under section 12AB it is not necessary you have to convert it these are the things which the act has given along with the amendment these things have come in the act now I want to clarify one thing that exactly similar amendments have come in section 1023C and also in 80G do you know that when you have to take the exemption then section 11 or 1023C and if you have to take the donor then it is taken in 80G but for 80G you have to take the donor's approval you have to take the registration only then the donor gets the exemption or the benefit so exactly the same changes have come in the sections so I am not going to do those sections I am not telling you which section has been added which proviso has been added what language has been added exactly the same which I have just told so this is also over now before I move on to practical situations the practical difficulties in the last 1 year the amendment has increased the practical difficulties we have faced we have perceived and people have asked us I will discuss that before that I will talk about the procedure I will tell you that you have to take the registration 12AB or 1023C or 80G because you have to take it in 80G you have to make everything new you have to make everything renewed for that there is a form 10A on your portal there is only one for everyone but if someone wants to take 12AB and 80G then please give 10A for both of them there is only one and it is very long that form has been made it becomes a little complicated because different types of facts and different types of compliances are asked something will be asked in 1023C something will be asked in 80G something will be asked in 12AB but the form is the same but for a different renewal you have to make a different form if you want 1023C and 80G then you have to make two forms if you want 12AB and 80G then you have to make two forms the form number is 10 now I will tell you what are the requirements and what are the things you have to do what are the documents you have to do digitally file all will go online digitally signed you have to do nothing you have to do nothing first of all the evidence of your creation for example if you have trust from where you have started originated society has the same document if you are in section 8 companies I think all are aware in section 8 companies you get these benefits section 8 company you have certificate of cooperation all these are self certified self tested scan it and upload it apart from that any registration in fact if you have your registration then you will have that if you already have registered under income tax if you have A1 registration then you will have that certificate if you applied for A1 and it was rejected you have to apply for an order they have asked for some annual accounts for the last 3 years so the trust that has not been for the last 3 years if it is 2 years then you have to apply for A1 you have to apply for A1 that is to self explain A1 is asking for not on activities so you have to make up and apply for it all these documents are linked with A1 now on practical situations before coming I would like to tell you there is a power to cancel the registration or approval it has power it was power before not like that if you get a certificate or you get a registration then you forget the registration you can also cancel and it had 2 factors on 2 basis you can cancel your registration if on the basis of objects which were a set of objects on the basis of which you were given a charitable and you were given a registration or you were not doing or your objects were changed they were not or your activities were not general so in that case the CID or the principle CID had the right to cancel your registration even in the new regime that power was also there but here the whole change is there in this those 2 things have been said which we are saying apart from that they have put a few more things they have put 2 more things first trust or institution has not complied with the requirement of any other law quite fair we understand this because now the conditions have been taken that the time you are given a registration that time it will be checked that is my example if you are in school you are not doing registration when you are not doing your non-compliance then definitely you will have the power to cancel it so this is one addition which says that if the violation of section 13-1 then the principle CID can cancel your registration what is 13-1 I will not tell you more when we will talk about taxability then we will discuss it in section 13 those instances where you will not get an exemption you have got your registration that does not mean that you just go and you get an exemption automatically a sensing officer has the power that every year year to year and many things happen that do not check during the assessment section 13 is an example which says that as a trust or society existing for charitable purposes you do some expenses and the expenses that you are paying normally you are paying and they do some related parties and they do it very unreasonably for example if there is a trust or a trustee you have opened a school you have given it to the teacher but the salary you are paying that is unreasonable means the rate of salary in the market you are paying more than that then you are getting a new value or you have given your trustee a loan or a small interest that is also a new benefit related part so this is an example so in these cases what happens is we had to say there are many judgments like I.C.O.T.K. and I.T.A. in which it was said that when you cancel the registration you have to check section 13 to check section 13 to check assessing officer every year while making the assessment this is his work but now the law has changed and they have said that on the basis of this you can cancel your registration now I will come to practical situations that we are facing or we will face for registration first case case is where application against rejection of application is pending before I.T.A. and I.C.O.T.A. you have applied for registration and your registration has been denied you will not be given for any reason there is an order of rejection which is an appealable order which is directly done by I.T.A. in I.T.A. from there your I.C.O.T. has gone anywhere in today's date it is pending so what to do can you renew the registration it is not but it is possible tomorrow I.T.A.D. you will get your registration so what to do in this case personally my view is legally you do not have any registration on 1st April 2021 without doubt matter is subjudice but you do not have registration certificate so please do not risk and add new registration you will be in trouble because in this year if you apply for registration then you will get the same year because if you apply then you will get the same year now you will say after a month after 4 months I have taken the same year after 3 years after 2 months I.T.A.D. I.T.A.D. you should give registration so what to do so what to do we do not know there is no harm if I.T.A.D. has wasted you then you will not be here this year whatever the benefit is it is better to go now if I.T.A.D. gave it to you after a month after 4 months then what will you do so I believe that there is no provision in the act there is no clarification or it can be I.T.A.D. or HICO in order there is no direction they have made the registration in their own way so give them and give them 12 AB from that day until 12 A automatically give 12 AB so there is no direction but this is better to be on safer side your provisional whatever you do you will get the benefit just to be on safer side if you have your own pending then please apply new now if you see the reverse case your registration was denied you have gone in appeal in I.T.A.D. and in I.T.A.D. they gave your favor order is now available department appeal and first April department appeal is pending in high court so what will you do you have registration legally valid registration is in your hands so please convert it to 12 A first April second situation there is one more situation which is very practical very practical suppose you have been denied registration you will go in appeal in I.T.A.D. I.T.A.D. before first April I.T.A.D. they said the finding was not fixed no you have to change it completely you had got your registration and your registration is not in I.T.A.D. it is cancelled now the order of cancellation is also available now I.T.A.D. and I.T.A.D. said this is not going to happen but it was not in your favor I.T.A.D. they sent it back to I.T.A.D. I.T.A.D. you check it again it is not looking good see it again so it came back to I.T.A.D. and it is pending in the first April so what will you do look at it carefully particularly in the first April 2021 you have a valid registration in your hands so whatever it has cancelled the order of cancellation I.T.A.D. has cancelled so it will check again it will check again it will make mistakes again and then it will order again so as on date there is no such cancellation order in your hands so you don't have to do anything you have to convert it in I.T.A.D. let's go these are the set aside cases now I.T.A.D. would like to give you information first in income tax a simple scheme of taxation or benefit or relief exemption in section 250 there is a definition which has the main relevance section 11's exemption if you want to take section 11's exemption if you are registered in I.T.A.D. you will be registered in I.T.A.D. so for that the definition of cherry table section 215 it is necessary to understand and if you are in that then you don't have any registration in 1023C there is no role in this definition because in that there is no section if you are existing solely for medical purposes if you are existing solely for educational purposes then education and medical are given benefit then it is necessary to know the definition of cherry table so from here one more thing comes out education and medical are per se charity that is not a charity whether you take it here or there sometimes this question comes there were many such cases and sensing officer used to say if you work for education you don't even do anything else you are existing solely for education but you take such happy fees you take expensive fees from people so in that our argument came that you cannot see how much fees we are taking we are supposed to exist solely for educational purposes as much as money is coming we are putting it back in education or in such a finding that we are taking happy fees and we are using them in some other work from education if fees are coming and we are existing solely for educational purposes then in any case you will get exemption you will get it you cannot do it now as far as the question of charity I will tell you everything charity once a charity always a charity when I go to my office when I explain to my children this fundamental will always be once a charity always a charity you exist only for charity you have made a charitable trust you have donations you are working with me giving education, medical benefits really full I am only talking about income tax the definition of income tax they are working with you first whatever money you are getting whatever income you are getting or whatever resources you have you are not using it for any particular specific person you are not using it it is not like you are running a trust you are taking the money out of the trust you are taking the money out of the trust for that you are giving very good checks and balances income tax act the commissioner has the power the CIT the principal CIT has the power the registration the assessing officer has a lot of powers every year when you do an assessment you can check these things so this is one thing and second thing if you are closing your trust closing in any way what are the reasons what can be closed so the property you have a problem for educational purposes for medical purposes for any charity for that whatever your balance sheet whatever assets you have what will happen to them will they take the trustee you all know it will never happen it will never happen in any condition either it will be in another charity another charity it will be given to the society that will use it for any purposes or it will go into the government's treasury it is not like that no individual can take advantage of it for that there is a very good provision in the income tax act if you study you will feel that there is a bit of a bit of draconian but that makes sense it gives you a very good weight one such charity always a charity because the point is that you have done a charity not actually you have done a charity but while doing a charity there will be a kind of charity you have done assets you have done a charity if you are spreading education you have made a building you have done a charity and you have done a lot of things and when you are closing it then what will you do about it they have made a section in the income tax act there is 115T 115T it is a section it is a bit long it is not very long but you have to understand it there are many sub sections but I want to explain this and I want to link some things from registration then they said that if you are closed for any reason and they gave 3-4 conditions that the time you are ending then do you transfer your trust to any other similar trust or not you have not transferred it it is a 1 year time frame if you want to close then you have assets you have to transfer your similar objects to any other trust in the section 12A if you want to die then you have to die with any other trust whose objects are like you exactly like you and A A will be registered in A B so if it is like this then we will accept it because the charity will be converted but if you do not do this I will tell you the details if you do not do this then what will happen it is a 1 year time frame in which you can transfer you have not done it what you have read some time ago 4 years 19 years ago some trust of Tata there are many trust of Tata in that some issue arise there was a lot of news some trust of Tata they say that we have our registration in the income tax act we want to surrender it but in the income tax act there is no provision there is no provision which says the registration you have given you can withdraw it please take care of it you can never withdraw it you cannot withdraw it you cannot say I do not want this exam you take it because if you give practical example if you have 5 years trust then you did not give tax for 5 years you have spent money on it you have spent money on it you have spent money on it I do not want this exam and you take trust whatever you have this is income tax I do not allow it in 115 TV I said the day this trust is closed it is dissolved whatever will happen there are many situations whatever you have done with exempted income their fair market value will also go when there is a building then its fair market value will go not book value all assets will have fair market value and one of them is there is a method and one of them is you have to give tax on maximum marginal rate it is not easy to control trust now here I have some questions when this transitional phase is coming I am registered I have to convert myself and suppose I do not do it or I forget I do not remember I keep forgetting after 1st April this is not this is not the existing law I will not get any 11th exam then what will happen then what will happen that my trust is closed and my trust is closed then my assets fair market value maximum market and rate will be taken from me see this if we literally read the app which we know literally which you cannot add you cannot remove it when I read there is no such situation if you are in 12AA and you did not apply for AB you did not convert yourself then you will get 1150 if you get a provisional registration of 3 years after that you did not apply then what will happen that situation will not come in this section you got a 5 years final registration but after 5 years you did not get a renewal then what will happen that situation will not come in this section so in these cases we will divide them see this literally it seems that nothing happened what will you do because even somewhere it is not possible that if you do not convert the provisional or if you do not get a renewal of the final then your registration will be cancelled there is no provision then what will happen I think that you are not coming in 1150 but I also feel that there is a new provision new amendment then this cannot happen either it has been left with a mistake or there will be an amendment or there will be a declaration of CBD then if you want to take such a provision then you should understand this do not take a risk take a risk provision take a risk proposition but literally it seems that such situations are not yet happening in the act I mean a lot of people are talking to me they are saying believe me logically if you think then it happens that you should come in 1150 but when you see it literally you should not come now what we will do is one more thing what we will do is 1023C and such a 12AA is the first then some differences always 1023C and 12AA existed because of which I said some people used to take a provision take 1023C and the year in which the beneficiary used to think he used to claim so I have this big question why should we do what should we do we should know what are the differences two or three small differences one difference is not small, it is very big one month size TB in which specifically it is written that it is applicable only to trust and societies which is registered in 12AA or AB there is no mention of 1023C in that so 1023C no matter the institutions no matter the antiques there is no mention of 1 month size TB this was a big difference this was a big difference difference is still there one difference was corpus donation corpus donation as you know no donation came with a specific direction to be used as corpus corpus fund is normally there are two types a general corpus is that it will be used for any capital one is a building fund or something like this so there are two types of corpus so if there is a donation with a specific direction to be used only as a corpus then it will not be considered income in section 11 it will not be considered that it is not income when it is not income then you don't have to use it for charitable purposes very good and this was a provision which was often used by AA for donation you don't have to apply it because income tax is that whatever receipts you have which is called income donation is also used normal donations 85% of that you don't have to apply it for charitable purposes so in the calculation of 85% that corpus donation will not come but such a provision is not in section 1023c in 1023c there will always be a corpus donation any donation whether it is a corpus it should be considered as income and it should be used for charitable purposes but because the department has made 1023c or 12A to end that gap that provision is also included in 1023c if you want to get a corpus donation then you should take your income this is done for charity apart from that all the institutions which have come for charity they have to make a list of donations an online everything is going on online so an online you have 26 AS all these details you have to make a list of donations you have to make a list and file the department in which you have to give donor's name address what will happen to this when the donor asks for ATG's deduction when he asks for ATG's deduction then he will get the deduction only when his name is in this list it will cross verify so you don't have to give any deduction so there are some things which keep happening and what I said in the beginning in charity there is a lot of confusion because if you are getting benefits then you have to do something actually you are not doing charity but you are becoming a charity and you are getting benefits so there are some such amendments and they are coming very soon in 2-3 years it will become a full proof system because it is cross checking now anyone is taking the deduction of ATG so now it has happened that you won't get the name until you get the money and your pen number will also come so there are some things which will cross check and things will be very transparent and whatever happens whatever was amazing will be over I think what I had to say because I had to say as much as I could of registration if you have any questions then I can take the next episode that extension it will be long it will be very long because I have only made registration thank you very much as you said if the sample is like this then look at the result the ease with which when I came to taxability then I can speak seriously for a week the provision of registration is only that much that's true we will allow unmuting Johnny we will allow everyone to unmute whosoever wants to ask the question they can ask we started the second session in Hindi after so many sessions we have started in Hindi we have allowed pre-quantity to ask hello good evening good evening we have a sati act under registration we did it in two years we have a sati act so last year till March 2021 we were doing projects in CSR after that the sponsoring agency you register in your ATG otherwise your project will be null and void because it is mandatory in CSR activity are you registered in 12A? no now we have we have registered in our CA we have registered in 10A online registration will be available in 12A you have registered in 1 April and they have centralized my CA now you have registered in your application no 21 I am telling you it is 10A form for 12A now it is AB I understood now you have to listen carefully wherever you are registered you don't have to take any income tax you have to take any benefit of income tax or you have to take your donor who gives you some donation for that you have to register in income tax you have to register in 12A which your CA has filled 10A form because the period of 3 months will take more time so your registration will be available because your first time registration will be available for 3 years now for the question of ATG you have to fill in 10A form and that is pre-requirement that you have to be registered in 12A they have filled ATG form but I have told you they will have to fill that is also big they will get provisional but they will get it if all of your audience will look good they don't even see much in provisional almost automatically both of you will get it after that now it will be available you are already doing these activities yes ma'am yes ma'am you have been doing this for 12 years yes there are a lot of trusts that have been working for 20-25 years but they have not taken registration they will take first time registration but the provisional registration has to be converted into final registration when you start the activity you will get it within 6 months but you already have activities yes ma'am listen to me as soon as you have the final registration in 2-4 days apply for the final registration and write it you will get it in 10 you will get it in ATG and in 12A apply it as soon as possible then you will get it for 5 years you will get it in 12A you will get it in ATG and when 5 years are over then you will get it again immediately we can apply for the final registration you are doing activities yes they are not doing it they will get it in 3 years ok ma'am one more question as soon as we have applied for the final registration we have not received any message from the under process how much time we have how much time we have how much time we have don't worry because all of this the human interface is over now I am saying in the human interface there is no problem or there is no problem don't worry you are in your CA and if there is any problem can I get your contact number? because ok this is by VS he is on facebook this is section 12AB can a trust opt out of section 12AB and pay taxes and inclusion I have said this a lot I did not have any relation with the registration but I have said it in today's deliberation but I believe that I can do the whole webinar because I talked about 115TD and I told that Tata has some trust that she wants to surrender the registration registration if you have taken one you cannot surrender it because you have earned 4 years, 5 years 10 years, 20 years with exempted income and you say I don't want an exemption so you will have to give the assets or the government or the charity commissioner will take it and pay taxes you can't do this you can either join with the trust or whatever assets you have in one year you can ask the trust you can consider that but you cannot keep the assets if a person wants to donate a property to a trust then does that person get exemption from the stamp duty which is to be paid stamp duty is a subject that I will not be able to tell you okay man so thank you friends for joining us and keep in touch with us so that we can do more webinars and tomorrow friends again we are back to the advocacy since we are primarily the platform for the advocates as such so tomorrow it will be an interesting aspect for the purposes of lawyers especially the young lawyers and students who are doing mooting like anything tomorrow is the art of reading and citing judgments that is by Dr. Aditya Sundi a senior advocate from Kanataka High Court and he is very popular you can google it around we will find a lot of YouTube webinars as well as appearances of his on different aspects of law especially for the young lawyers so do stay connected with us tomorrow at 7pm and we are thankful to Dr. Aditya Sundi he has said that as much as he has he has pushed us on the topic and it is quite encouraging for us to take topics beyond what we are talking normally and thank you to all those who have been watching us thank you