INCOME TAX
INSTRUCTION NO. 1306/1996
Dated: March 5, 1996
Section(s) Referred: 80G
Statute: Income - Tax Act, 1961
The Board had by Instruction No.1124 dated 13th December, 1977 pointed out that a large number of complaints have been made regarding delay in disposal of applications for issue of recognition certificates under section 80-G of the I.T. Act, 1961. Commissioners of Income-tax were required to dispose of an application under section 80G within 90 days on its receipt.
2. The Board continue to receive representations pointing out delay in disposal of applications for grant of recognition certificates under section 80G. On possible reason for the delay could be that the reports have to be asked for from the I.T.Os./IACs. In the case of applications where charitable trusts have not carried out any activities for such time that their accounts would have been closed, there would appear to be no necessity for calling of reports from the I.T.Os. In such cases, the ITO will not have any additional material to report upon.
3. The Board, while reiterating instruction No.1124 desire that in the case of trusts referred to in the preceding paragraph, the recognition certificates be issued by the Commissioners of Income-tax without having to call for reports from the I.T.Os. The Certificates issued in such cases should invariably be for a period of one year only.
4. Issue of the recognition certificates under section 80G by itself will not entitle a trust to claim automatic exemption under section (22), (22A), of Section 10. The exemption to the trust is to be granted by the ITO in regular assessment proceedings. In this connection, attention is invited to Board's instruction No.931 dated 4th March, 1976 which mentioned that whenever the Income-tax Officers give a finding that the trust will not be eligible for exemption from income-tax so that necessary action for withdrawing the recognition certificate under section 80G is taken.
5. Having regard to the existing instructions on the subject, the Board desire that there should be no occasion for it to receive representations against delay in the grant of recognition certificate under section 80-G.