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New Registration Procedure under section 12AB Deferred and Extended to April 2021 from December 2020

new-registration-procedure-section-12ab-deferred-extended-april-2021-december-2020

The new registration procedure prescribed under section 12AB for Charitable Trusts and other related provisions as introduced by the Finance Act, 2020 has been deferred and extended to April 1, 2021 by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Both the renewal of registration u/s 12A or section 12AA, as well as renewal of approval under section 80G, is being deferred.


The new registration procedure prescribed under section 12AB was supposed to be rolled out from 01.06.2020 and end by 31st August 2020,  which was deferred and extended to 01.10.2020 and end by 31st December 2020 but considering the current pandemic situation, it has been extended to 01.04.2021 and hence now all existing trust have to re-register themselves under section 12AB from 01.04.2021.


Finance Act, 2020 rationalized the procedure relating to approval/ registration/ notification of certain entities referred to in sections 10(23C), 12AA, 35 and 80G of the Act, with effect from 1st June 2020. As per the new procedure, the entities already approved/ registered/ notified under these sections would be required to file intimation within three months, i.e, by 31st August 2020. Further, the procedure for approval/ registration/ notification of new entities has also been rationalized with effect from 1st June 2020.



Initially, these amendments related to the new registration procedure for charitable trusts and other institutions were introduced from 01.06.2020 by the Finance Act, 2020.


Update:

CBDT Notifies Registration Procedure u/s 12AB from April 2021


However, in view of the unprecedented humanitarian and economic crisis due to COVID-19 pandemic and the resultant nationwide lockdown, the CBDT had decided to defer the implementation of the new procedure for approval/ registration/notification of certain entities to 1st October 2020. Accordingly, the entities approved/ registered/ notified under section 10(23C), 12AA, 35 and 80G of the Income-tax Act, 1961 (the Act) would be required to file intimation within three months from 1st October 2020, i.e, by 31st December 2020. Further, the amended procedure for approval/ registration/ notification of new entities was also deferred till 1st October 2020. This was stated by the CBDT in a press release dated 09.05.2020. However, no legislative amendments were carried out.


The legislative amendments were introduced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 which has further extended the new registration and other procedure under section 12AB and other sections to 01.04.2021. These amendments were carried out in all the related provisions which were introduced by the Finance Act, 2020. Hence, the new provisions related to charitable trusts and other institutions shall now apply from the financial year 2021-22.


For this purpose, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 has to amend the related provisions in a two-way manner. Firstly, the amendments in this Act have withdrawn all the amendments made by the Finance Act, 2020 in the Income Tax Act, 1961. Since the provisions of Finance Act, 2020 was notified on March 22, 2020, it becomes necessary to roll back the amendments so far introduced in the Income Tax Act. This has brought all the relevant provisions to the pre-amended position.


Secondly, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 has amended the Income Tax Act to introduce all these amendments from April 1, 2021.


The Government notified the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 on 29 September 2020 after receiving the President of India’s assent. The Act seeks to enact legislative amendments in direct and indirect tax laws which were introduced by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 as a COVID-19 pandemic relief measure. It also legislates subsequent relaxations provided vide the Ordinance and Notification/Press Releases.


The Finance Act, 2020, introduced the concept of a new procedure for registration of all existing and new charitable trusts and institutions under section 12AB of the Income Tax Act, 1961.


To continue claiming exemption, existing registered charitable trusts and institutions were required to apply for fresh registration within three months from the date this section was made effective. Initially, the section was effective from 01.06.2020, which was later deferred to 01.10.2020. Hence, the new registration and approval procedures need to be completed by 31.08.2020/31.12.2020. Similar provisions were also introduced for renewal of 80G certificates and filing of statements of donations and issue of certificates to donors which were initially made effective from 01-06-2020 and then deferred to 01-06-2020.


To provide further relief to taxpayers given the continuing pandemic, the applicability of new provisions for registration/re-registration under section 12AB have been deferred to 01-06-2021. 


Charitable trusts and institutions seeking fresh registrations until 331-03-2021 can make an application under the existing provisions of section 12AA. From 01.04.2021, the application for registrations will have to be made under section 12AB of the Act. Registered trusts and institutions would be required to apply for re-registration under section 12AB of the Act in FY 2021-22 on or before 30.06.2021.


Similarly, amendments made vide the Finance Act, 2020, in sections 35 and 80G of the Act for intimation, filing statements before the income-tax authorities and furnishing certificates to donors, etc., with effect from 1st June 2020 are deferred to 01.04.2021. 


The amendments to each of the provisions are discussed below-


Related sections viz. 10(23C), 11, 12A, 12AA, 56(2), 115BBDA, 115TD and 253 under the Act have been re-modified such that pre amended provisions (i.e. provisions prior to amendments made vide the Finance Act, 2020) will continue.


However, the provisions related to charitable trusts viz, section 12A and section 12AA, section 12AB, section 56, section 80G and section 271K are only discussed below. Similar amendments were also made for section 35, etc.


SectionAmended ProvisionsAmendments
& Effective Date
Remarks
Sec. 12AClause (ac) of Sub-section (1)Omitted w.r.e.f 01-06-2020Omitted by the Act No. 38 of 2020, w.r.e.f. 1-6-2020. Prior to its omission, clause (ac) was inserted by the Act No. 12 of 2020, w.e.f. 1-6-2020.
Inserted w.e.f. 01-04-2021Re-introduced from 01-04-2021
“First Proviso” to sub-section (2)Omitted w.r.e.f 01-06-2020“First Proviso” omitted by the Act No. 38 of 2020, w.r.e.f. 1-6-2020. Prior to its omission, first proviso was amended by the Act No. 12 of 2020 w.e.f. 1-6-2020.
“Second Proviso” to sub-section (2)Amended w.r.e.f. 01-06-2020This now becomes the first proviso of section 12A(2). Reference to section 12AB omitted.
“Third Proviso” to sub-section (2)Amended w.r.e.f. 01-06-2020The existing third proviso has now become the second proviso and hence ‘"provided also" is substituted with "provided further".
“Fourth Proviso” to sub-section (2)Amended w.r.e.f. 01-06-2020Reference to section 12AB omitted.
“First Proviso” to sub-section (2), after the amendment by this ActAmended w.e.f. 01-04-2021Time-limit for applicability of exemption upon migration to new registration regime.
“Second Proviso” to sub-section (2)Amended w.e.f. 01-04-2021The existing second proviso will become the third proviso and hence "provided further" is substituted with ‘"provided also".
“Fourth Proviso” to sub-section (2)Amended w.e.f. 01-04-2021Reference to section 12AB inserted.
Sec. 12AASub-Section (5)Omitted w.r.e.f 01-06-2020Omitted by the Act No. 38 of 2020, w.r.e.f. 1-6-2020. Prior to its omission sub-section (5) was inserted by the Act No. 12 of 2020 w.e.f. 1-6-2020.
Inserted w.e.f. 01-04-2021This relates to Non-applicability of provisions of section 12AA. Earlier it was amended that the provisions of section 12AA would not apply from 01.06.2020. Now it has been amended to make it applicable from 01.04.2021. Thus, provisions of section 12AA will apply from 01-04-2021 and not from 01-06.2020.
Sec. 12ABEntire ProvisionsOmitted w.r.e.f 01-06-2020Omitted by the Act No. 38 of 2020, w.r.e.f. 1-6-2020. Prior to its omission section 12AB was inserted by the Act No. 12 of 2020
Inserted w.e.f. 01-04-2021This relates to procedure for fresh/new registration of a trust or institution. Earlier it was amended that the provisions of section 12AB would apply from 01.06.2020. Now it has been amended to make it applicable from 01.04.2021. Thus, provisions of section 12AB will apply from 01-04-2021 and not from 01-06.2020.
Sec. 56Clause (v), Clause (vi), Clause (vii) and Clause (x) of Sub-Section (2)Omitted w.r.e.f 01-06-2020Reference to section 12AB omitted.
Inserted w.e.f. 01-04-2021Reference to section 12AB inserted.
Sec. 80GIn sub-section (2), in clause (a), in sub-clause (iiia)Inserted w.e.f. 01-04-2020PM CARES FUND included for 100% deduction without any limit
Clauses (vi) of sub-section (5)Amended w.e.f. 01-06-2020Approval procedure amended and the provision as it stood prior to 01.06.2020 reintroduced.
Clauses (vi) of sub-section (5)Amended w.e.f. 01-04-2021Approval procedure amended and the provision as it stood as on 01.06.2020 introduced.
Clauses (viii) and (ix) of sub-section (5)Omitted w.r.e.f 01-06-2020Omitted by the Act No. 38 of 2020, w.r.e.f. 1-6-2020. Prior to their omission clauses (viii) and (ix) were inserted by the Act No. 12 of 2020 w.e.f. 1-6-2020.
Clauses (viii) and (ix) of sub-section (5)Inserted w.e.f. 01-04-2021
Clause (viii) relates to furnishing of a statement of donation received from donors. Clause (ix) relates to furnishing certificates of donation to donors.
Earlier these provisions were introduced by FA, 2020 to apply from 01.06.2020. Now it has been amended to make it applicable from 01.04.2021. Thus, these provisions will apply from 01-04-2021 and not from 01-06.2020.
Further, the procedure for obtaining approval in case of an approved fund is deferred to 01.04.2021. These provisions related to fresh approval will now be applicable from 01.04.2021 instead of 01.06.2020 introduced earlier vide Finance Act, 2020.
Sub-section (5E)Omitted w.r.e.f 01-06-2020Omitted by the Act No. 38 of 2020, w.r.e.f. 1-6-2020. Prior to its omission sub-section (5E) was inserted by the Act No. 12 of 2020 w.e.f. 1-6-2020.
Inserted w.e.f. 01-04-2021This relates to applicability of new approval provisions for pending approval application as on 01.04.2021.
Explanation 2AOmitted w.r.e.f 01-06-2020Omitted by the Act No. 38 of 2020, w.r.e.f. 1-6-2020. Prior to its omission sub-section (5E) was inserted by the Act No. 12 of 2020 w.e.f. 1-6-2020.
Inserted w.e.f. 01-04-2021This relates to allowability of deduction for donation to donors on the basis of information furnished to income tax authority.
Sec. 115BBDAOmitted w.r.e.f 01-06-2020Reference to section 12AB omitted.
Inserted w.e.f. 01-04-2021Reference to section 12AB inserted.
Sec. 271KEntire ProvisionsOmitted w.r.e.f 01-06-2020Omitted by the Act No. 38 of 2020, w.r.e.f. 1-6-2020. Prior to its omission section 271K was inserted by the Act No. 12 of 2020 w.e.f. 1-6-2020.
Inserted w.e.f. 01-04-2021This relates to imposition of penalty for failure to furnish statement of donations u/s 80G(5)(viii) or failure to furnish certificate u/s 80G(5)(ix), section 35, etc.

Deferment of provisions for new registration procedure of Charitable Trusts and Institutions u/s 12AB


Finance Act, 2020 has prescribed a new registration procedure for Charitable Trusts and Institutions under section 12AB. Existing registered trusts or institutions were required to migrate to the new registration regime u/s 12AB from 01-06-2020 to 31-08-2020. However, due to the outbreak of COVID-19 and the subsequent nation-wide lockdowns, the date of applicability of section 12AB was extended to 01-10-2020 instead of 01-06-2020.


It was further provided that provisions of section 12AA shall not apply from 01-06-2020. This amendment is now withdrawn from the Finance Act, 2020 and made applicable from 01-04-2021.


The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 has, however, withdrawn the amendments introduced by the Finance Act, 2020 and re-introduced the same and made it applicable from 01-4-2021. Hence, all the provisions as was applicable to the Trusts and institutions before the amendment by the Finance Act, 2020 were restored and will continue till 31-03-2021. In other words, the old regime of registration procedure will continue till 31-03-2021.


Consequently, references of section 12AB in section 115TD, section 115BBDA and section 56 have been omitted and is introduced from 01-04-2021. The Finance Act, 2020 amended Section 56(2)(x) w.e.f. 01.06.2020 to provide that the amount received by an individual or a HUF from any trust or institution registered under section 12AB of the Act shall not be deemed as ‘Income from other sources’. This provision is now deferred to 01.04.2021. Finance Act, 2020 amended section 115BBDA to exclude any trust or institution registered under section 12AB from the list of the specified assessees being subjected to the tax at 10% on dividend income exceeding Rs. 10 lakh in aggregate.


Furnishing statement of donations under section 80G postponed


The Taxation Act has amended section 80G to insert a new clause (viii) to sub-section (5) of section 80G to provide for furnishing a statement of donations received from the donees to the income-tax authority in the prescribed form and within the prescribed time limit. This amendment shall now take effect from 01-04-2021. Further, such trust or institutions has to furnish certificates to the donors in the prescribed manner w.e.f. 01-04-2021 as against 01-06-2020.


This amendment was originally introduced by the Finance Act, 2020 but now has been deferred till 01-04-2021. Consequently, the penalty provisions have also been deferred till next year. 


Read the bare text of the provisions amending the same is reproduced below from the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020


Amendment in Section 12A


(IV) in section 12A,—


(a) in sub-section (1),—


(i) with effect from the 1st day of June, 2020, clause (ac) shall be omitted and shall be deemed to have been omitted;


(ii) with effect from the 1st day of April, 2021, after clause (ab), the following clause shall be inserted, namely:—


"(ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,—


(i) where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the 1st day of April, 2021;


(ii) where the trust or institution is registered under section 12AB and the period of the said registration is due to expire, at least six months prior to expiry of the said period;


(iii) where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier;


(iv) where registration of the trust or institution has become inoperative due to the first proviso to sub-section (7) of section 11, at least six months prior to the commencement of the assessment year from which the said registration is sought to be made operative;


(v) where the trust or institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, within a period of thirty days from the date of the said adoption or modification;


(vi) in any other case, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought, 


and such trust or institution is registered under section 12AB;";


(b) in sub-section (2),—


(A) with effect from the 1st day of June, 2020,—


(i) the first proviso shall be omitted and shall be deemed to have been omitted;


(ii) in the second proviso, for the words, figures and letters


"Provided further that where registration has been granted to the trust or institution under section 12AA or section 12AB", the words, figures and letters "Provided that where registration has been granted to the trust or institution under section 12AA" shall be substituted and shall be deemed to have been substituted;


(iii) in the third proviso, for the words "provided also", the words "provided further" shall be substituted and shall be deemed to have been substituted;


(iv) in the fourth proviso, for the words, figures and letters "section 12AA or section 12AB", the word, figures and letters "section 12AA" shall be substituted and shall be deemed to have been substituted;


(B) with effect from the 1st day of April, 2021,—


(i) in the first proviso, for the words figures and letters "Provided that where registration has been granted to the trust or institution under section 12AA", the following shall be substituted, namely:—


"Provided that the provisions of sections 11 and 12 shall apply to a trust or institution, where the application is made under—


(a) sub-clause (i) of clause (ac) of sub-section (1), from the assessment year from which such trust or institution was earlier granted registration;


(b) sub-clause (iii) of clause (ac) of sub-section (1), from the first of the assessment year for which it was provisionally registered:


Provided further that where registration has been granted to the trust or institution under section 12AA or section 12AB";


(ii) in the second proviso, for the words "Provided further", the words "Provided also" shall be substituted;


(iii) in the fourth proviso, for the word, figures and letters "section 12AA", the words, figures and letters "section 12AA or section 12AB" shall be substituted;


Amendment in Section 12AA


(V) in section 12AA,—


(a) sub-section (5) shall be omitted and shall be deemed to have been omitted with effect from the 1st day of June, 2020;


 (b) after sub-section (4), the following sub-section shall be inserted with effect from the 1st day of April, 2021, namely:—


"(5) Nothing contained in this section shall apply on or after the 1st day of April, 2021.";


Amendment in Section 12AB


(VI) section 12AB shall be omitted and shall be deemed to have been omitted with effect from the 1st day of June, 2020;


Procedure for fresh registration


(VII) after section 12AA, the following section shall be inserted with effect from the 1st day of April, 2021, namely:—


"12AB. (1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,—


(a) where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years;


(b) where the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of the said clause,—


(i) call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about—


(A) the genuineness of activities of the trust or institution; and


(B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects;


(ii) after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub-clause (i),—


(A) pass an order in writing registering the trust or institution for a period of five years; or


(B) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its registration after affording a reasonable opportunity of being heard;


(c) where the application is made under sub-clause (vi) of the said clause, pass an order in writing provisionally registering the trust or institution for a period of three years from the assessment year from which the registration is sought, and send a copy of such order to the trust or institution.


(2) All applications, pending before the Principal Commissioner or Commissioner on which no order has been passed under clause (b) of sub-section (1) of section 12AA before the date on which this section has come into force, shall be deemed to be applications made under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A on that date.


(3) The order under clause (a), sub-clause (ii) of clause (b) and clause (c), of sub-section (1) shall be passed, in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received.


(4) Where registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, the Principal Commissioner or Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution after affording a reasonable opportunity of being heard.


(5) Without prejudice to the provisions of sub-section (4), where registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, it is noticed that— 


(a) the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13; or 


(b) the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (i) of clause (b) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality, 


then, the Principal Commissioner or the Commissioner may, by an order in writing, after affording a reasonable opportunity of being heard, cancel the registration of such trust or institution.";


Amendment in Section 56


(XI) in section 56, in sub-section (2),—


(a) with effect from the 1st day of June, 2020,—


(i) in clause (v), in the proviso, in clause (g), for the words, figures and letters "section 12AA or section 12AB", the word, figures and letters "section 12AA" shall be substituted and shall be deemed to have been substituted;


(ii) in clause (vi), in the proviso, in clause (g), for the words, figures and letters "section 12AA or section 12AB", the word, figures and letters "section 12AA" shall be substituted and shall be deemed to have been substituted;


(iii) in clause (vii), in the second proviso, in clause (g), for the words, figures and letters "section 12AA or section 12AB", the word, figures and letters "section 12AA" shall be substituted and shall be deemed to have been substituted;


(b) with effect from the 1st day of April, 2021,—


(i) in clause (v), in the proviso, in clause (g), for the word, figures and letters "section 12AA", the words, figures and letters "section 12AA or section 12AB" shall be substituted;


(ii) in clause (vi), in the proviso, in clause (g), for the word, figures and letters "section 12AA", the words, figures and letters "section 12AA or section 12AB" shall be substituted;


(iii) in clause (vii), in the second proviso, in clause (g), for the word, figures and letters "section 12AA", the words, figures and letters "section 12AA or section 12AB" shall be substituted;


(c) in clause (x), in the proviso, in clause (VII),—


(i) for the words, figures and letters "section 12A or section 12AA or section 12AB", the words, figures and letters "section 12A or section 12AA" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2020;


(ii) for the words, figures and letters "section 12A or section 12AA", the words, figures and letters "section 12A or section 12AA or section 12AB" shall be substituted with effect from the 1st day of April, 2021;


Amendment in Section 80G


(XII) in section 80G,—


(a) in sub-section (2), in clause (a), in sub-clause (iiia), after the word "Fund", the words and brackets "or the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)" shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2020;


(b) in sub-section (5),—


(i) with effect from the 1st day of June, 2020,—


(A) in clause (vi), for the words "approved by the Principal Commissioner or Commissioner;" the words "approved by the Commissioner in accordance with the rules made in this behalf; and" shall be substituted and shall be deemed to have been substituted;


(B) clauses (viii) and (ix) shall be omitted and shall be deemed to have been omitted;


(ii) with effect from the 1st day of April, 2021,—


(A) in clause (vi), for the words "approved by the Commissioner in accordance with the rules made in this behalf; and", the words "approved by the Principal Commissioner or Commissioner;" shall be substituted;


(B) after clause (vii), the following clauses shall be inserted, namely:—


"(viii) the institution or fund prepares such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed:


Provided that the institution or fund may also deliver to the said prescribed authority, a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be prescribed; and


(ix) the institution or fund furnishes to the donor, a certificate specifying the amount of donation in such manner, containing such particulars and within such time from the date of receipt of donation, as may be prescribed:


Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,—


(i) where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the 1st day of April, 2021;


(ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period;


(iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier;


(iv) in any other case, at least one month prior to commencement of the previous year relevant to the assessment year from which the said approval is sought:


Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall,—


(i) where the application is made under clause (i) of the said proviso, pass an order in writing granting it approval for a period of five years;


(ii) where the application is made under clause (ii) or clause (iii) of the said proviso,—


(a) call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about—


(A) the genuineness of activities of such institution or fund; and


(B) the fulfilment of all the conditions laid down in clauses (i) to (v);


(b) after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause (a),—


(A) pass an order in writing granting it approval for a period of five years; or


(B) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its approval after affording it a reasonable opportunity of being heard;


(iii) where the application is made under clause (iv) of the said proviso, pass an order in writing granting it approval provisionally for a period of three years from the assessment year from which the registration is sought,


and send a copy of such order to the institution or fund:


Provided also that the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the first proviso shall be passed in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received:


Provided also that the approval granted under the second proviso shall apply to an institution or fund, where the application is made under—


(a) clause (i) of the first proviso, from the assessment year from which approval was earlier granted to such institution or fund;


(b) clause (iii) of the first proviso, from the first of the assessment years for which such institution or fund was provisionally approved;


(c) in any other case, from the assessment year immediately following the financial year in which such application is made.";


(c) sub-section (5E) shall be omitted and shall be deemed to have been omitted with effect from the 1st day of June, 2020;


(d) after sub-section (5D), the following sub-section shall be inserted with effect from the 1st day of April, 2021, namely:—


"(5E) All applications, pending before the Commissioner on which no order has been passed under clause (vi) of sub-section (5) before the date on which this sub-section has come into force, shall be deemed to be applications made under clause (iv) of the first proviso to sub-section (5) on that date.";


(e) Explanation 2A shall be omitted and shall be deemed to have been omitted with effect from the 1st day of June, 2020;


(f) after Explanation 2, the following Explanation shall be inserted with effect from the 1st day of April, 2021, namely:—


"Explanation 2A.—For the removal of doubts, it is hereby declared that claim of the assessee for a deduction in respect of any donation made to an institution or fund to which the provisions of sub-section (5) apply, in the return of income for any assessment year filed by him, shall be allowed on the basis of information relating to said donation furnished by the institution or fund to the prescribed income-tax authority or the person authorised by such authority, subject to verification in accordance with the risk management strategy formulated by the Board from time to time.";


Amendment in Section 115BBDA


(XV) in section 115BBDA, in the Explanation, in clause (b), in sub-clause (iii),—


(i) for the words, figures and letters "under section 12A or section 12AA or section 12AB", the words, figures and letters "under section 12A or section 12AA" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of June, 2020;


(ii) for the words, figures and letters, "under section 12A or section 12AA" the words, figures and letters "under section 12A or section 12AA or section 12AB" shall be substituted with effect from the 1st day of April, 2021;


Amendment in Section 271K


(XXXVI) section 271K shall be omitted and shall be deemed to have been omitted with effect from the 1st day of June, 2020;


Penalty for failure to furnish statements, etc


(XXXVII) after section 271J, the following section shall be inserted with effect from the 1st day of April, 2021, namely:—


"271K. Without prejudice to the provisions of this Act, the Assessing Officer may direct that a sum not less than ten thousand rupees but which may extend to one lakh rupees shall be paid by way of penalty by—


(i) the research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia) of sub-section (1) of section 35, if it fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of sub-section (1A) of that section; or


(ii) the institution or fund, if it fails to deliver or cause to be delivered a statement within the time prescribed under clause (viii) of sub-section (5) of section 80G, or furnish a certificate prescribed under clause (ix) of the said sub-section.";



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