Income Tax Act

Official PDF pages 421–425

SOURCE PDF PAGE 421
Sl.
No.
Case   Time limit for
furnishing
application
Time limit for
passing order
Validity of
registration
A   B   C   D   E
2.   Where   the   activities
of the applicant have
commenced and it has
not   been   registered
under   any   specified
provision at any time
before making the ap -
plication.
A t   a n y   t i m e
during   the   tax
year,   beginning
from which regis -
tration is sought.
Six months from
the end of the
quarter in which
application   is
made.
Five   tax   years
c o m m e n c i n g
from the tax year
in which such ap -
plication is made.
3.   Where the applicant
has been granted pro -
visional   registration
and   activities   have
commenced.
Within six months
of the commence -
ment of activities.
Six months from
the end of the
quarter in which
application   is
made.
Five   tax   years
c o m m e n c i n g
from the tax year
in which such ap -
plication is made.
4.   Where the provisional
registration of the ap -
plicant is due to expire
and activities have not
commenced.
At   least   six   months
prior to the expiry
of the provisional
registration.
Six months from
the end of the
quarter in which
application   is
made.
Five   tax   years
following the tax
year   in   which
such application
is made.
5.   Where the registration
of the applicant is due
to expire, other than
cases   mentioned   at
serial number 4.
At   least   six   months
prior to the expiry
of   the   registra -
tion.
Six months from
the end of the
quarter in which
application   is
made.
Five   tax   years
following the tax
year   in   which
such application
is made.
6.   Where the registration
of the applicant has
become   inoperative
due to switching over
of regime under sec -
tion 333.
At any time during
the tax year begin -
ning from which
the registration is
sought to be made
operative.
Six months from
the end of the
quarter in which
application   is
made.
Five   tax   years
c o m m e n c i n g
from the tax year
in which such ap -
plication is made.
7.   Where the applicant,
being   a   registered
non-profit   organisa -
tion, has adopted or un -
dertaken modification
of its objects which do
not conform to the con -
ditions of registration.
Within thirty days
of the date of such
adoption or mod -
ification
Six months from
the end of the
quarter in which
application   is
made.
Five   tax   years
c o m m e n c i n g
from commence -
ment of the tax
year   in   which
such application
is made.
(4) In case the application under sub-section (3) is made beyond the time allowed
in column C of the Table specified in the said sub-section, the Principal Commis -
sioner or Commissioner may, if he considers that there is a reasonable cause for
delay in furnishing the application, condone such delay and such application shall
be deemed to have been made within time.

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SOURCE PDF PAGE 422
(5) In case the application is made under sub-section (3) (Table: Sl. Nos. 3 to 7), and
the total income of such applicant, without giving effect to the provisions of this
Part, does not exceed five crore rupees during each of the two tax years, preceding
the tax year in which such application is made, the provisions of (Table: Sl. Nos.
3.E to 7.E) of the said sub-section, shall have effect as if for the words “five years”,
the words “ten years” had been substituted.
(6) If any application for registration is not made within the time specified in
sub-section (3) (Table: Sl. No. 3.C, 4.C, 5.C or 7.C) and the delay in filing such
application is not condoned under sub-section (4), such person shall be liable to
pay tax on accreted income under section 352.
(7) The Principal Commissioner or Commissioner shall, on an application made
by an applicant in any of the cases specified in sub-section (3) (Table: Sl. Nos. 2
to 7), call for such documents or information or make such inquiries as he thinks
necessary in order to satisfy himself about the genuineness of activities, and the
compliance of such requirements of any other law as are material for the purpose
of achieving its objects, and—
( a )   if he is so satisfied about the objects and the genuineness of the activities
and compliance of such requirements of any other law in force, shall
pass an order in writing granting registration; or
( b )   if he is not so satisfied, after affording a reasonable opportunity of being
heard to the applicant shall,—
( i )   pass an order in writing rejecting the application, where the
application was made in any of the cases specified in sub-section
(3) (Table: Sl. No. 2 or 6); or
( ii )   pass an order in writing rejecting the application and also cancel -
ling the registration in any other case specified in sub-section (3)
(Table: Sl. No. 3, 4, 5 or 7),
and send a copy of the said order to the applicant and the Assessing Officer.
(8) Where an application has been made in any of the cases specified in sub-section
(3) (Table: Sl. No. 1), the Principal Commissioner or Commissioner shall grant
provisional registration.
(9) Where the registration of a person, granted prior to the 1st April, 2021 under the
specified provision of the Income-tax Act, 1961 (43 of 1961), has expired and such
person makes an application for registration under this Part, the Principal Com -
missioner or Commissioner may, if he considers that there is a reasonable cause for
delay in making such application, condone such delay and grant registration to such
person under this Part within three months from the end of the month in which the
application is made, which shall be valid for five years from the commencement of
the tax year 2021-2022.
(10) The order under sub-sections (7), (8) and (9) shall be passed in the form and
manner, as may be prescribed.

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SOURCE PDF PAGE 423
Switching over of regimes.
333.   (1) Nothing contained in section 11, other than Schedule II (Table: Sl. No. 1),
Schedule III (Table: Sl. Nos. 27 to 29 and 36) and Schedule VII (Table: Sl. Nos.
10 to 19 and 42 to 45), shall exclude any income of a registered non-profit organi -
sation from its total income for that tax year.
(2) The registration under section 332 shall cease to operate from the date on which
the registered non-profit organisation is notified as specified in Schedule III (Table:
Sl. No. 27, 28, 29 or 36)   or Schedule VII (Table: Sl. No. 42), or from the 1st day of
April of the tax year for a registered non-profit organisation which claims exemption
under Schedule VII (Table: Sl. No. 43, 44 or 45).
(3) A person, whose registration ceases to operate under sub-section (2), may apply
for registration under section 332 subject to the condition that the notification
granting exemption to such person under Schedule III (Table: Sl. No. 27, 28, 29 or
36)   or Schedule VII (Table: Sl. No. 42)   ceases to have effect from the date on which
the said registration is granted and thereafter shall not be entitled to exemption
under the respective serial numbers of the said Schedules.
2. —Income of registered non-profit organisation
Tax on income of registered non-profit organisation.
334.   (1) The income-tax payable by a registered non-profit organisation on
its total income for any tax year shall be the aggregate of the amounts
calculated—
( a )   at the rate of 30% on specified income for such tax year; and
( b )   at the rate applicable on taxable regular income and any residual income
for such tax year under other provisions of this Act.
(2) The provisions of this Chapter shall apply irrespective of anything to the contrary
contained in any other provision of this Act other than sections 96 to 98.
Regular income.
335.   Regular income of any tax year of a registered non-profit organisation
means—
( a )   income from any charitable or religious activity, for which such non-
profit organisation is registered, carried out by it in such tax year;
( b )   income other than income covered in clause ( e ), derived from any property,
deposit or investment held wholly for charitable or religious purposes
by such registered non-profit organisation in such tax year;
( c )   income other than income covered in clause ( e ), derived from any
property, deposit or investment held in part for charitable and religious
purposes by such registered non-profit organisation as referred in section
332(2)( b )( ii )   in such tax year;
( d )   voluntary contributions received by such registered non-profit organi -
sation in such tax year; and
( e )   gains of any commercial activity permissible under sections 344, 345
and 346, carried out by such registered non-profit organisation in such
tax year, computed in such manner, as may be prescribed.

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SOURCE PDF PAGE 424
Taxable regular income.
336.   The taxable regular income of a registered non-profit organisation for any
tax year shall be—
( a )   nil , where 85% or more of the regular income of such tax year has
been applied as per provisions of section 341 or accumulated under
section 342 for charitable or religious purposes, in such tax year as per
the provisions of this Part; and
( b )   in any other case, 85% of the regular income for such tax year as reduced
by its application for charitable or religious purposes as per provisions
of section 341 or accumulation thereof under section 342 in such tax
year as per the provisions of this Part.
Specified income.
337.   The specified income of a registered non-profit organisation shall mean the
income as specified in column B of the Table below and shall be taxable in the
year provided in the column C thereof:—
TABLE
Sl.
No.
Specified income   Tax year
A   B   C
1.   Any   anonymous   donation   received   by   a
registered non-profit organisation other than
a registered non-profit organisation created
or established,—
( i )   wholly for religious purposes, or
( ii )   wholly for charitable and religious pur -
poses (excluding anonymous donation
made with a specific direction that such
donation is for any university or other
educational institution or any hospital;
or other medical institution run by such
registered non-profit organisation),
excluding the anonymous donations up to
`   100000 or 5% of the total donations received
by it during the tax year, whichever is higher.
Tax year in which such
anonymous donation is
received.
2.   Any portion of income applied by it, directly or
indirectly, for the benefit of any related person,
computed in the manner, as may be prescribed.
Tax year in which such
application is made.
3.   Any portion of income applied by it outside
India in contravention to the provisions of
section 338( a ).
Tax year in which such
application of income is
made.
4.   Any investment or deposit made in contraven-
tion to the provisions of section 350 out of
any income, accumulated income, deemed
accumulated income, corpus, deemed corpus,
or any other fund.
Tax year in which such
investment or deposit is
made.

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SOURCE PDF PAGE 425
Sl.
No.
Specified income   Tax year
A   B   C
5.   Any deemed corpus donation in respect of which
any of the conditions specified in the section
340 is violated.
Tax year in which such
violation is made.
6.   Any portion of accumulated income, if it is
applied to purposes other than charitable or
religious purposes for which it is accumulated
or set apart.
Tax year in which it is so
applied.
7.   Any portion of accumulated income, if it ceases
to be accumulated or set apart for application
to such purposes as specified under section
342(1).
Tax year in which it ceases
to be so accumulated or
set apart.
8.   Any portion of accumulated income, if it is not
applied as per the provisions of section 341(1)
to (4)   for which it is accumulated or set apart
within the period for which it was accumulated
or set apart as specified in section 342(1).
Last of the tax years for
which   income   was   so
accumulated or set apart.
9.   Any portion of accumulated income, if it is
credited or paid to any other registered non-
profit organisation.
Tax year in which it is so
credited or paid.
10.   Any income applied to purposes other than
charitable or religious purposes for which it
is registered.
Tax year in which it is so
applied.
11.   Any   income   determined   by   the   Assessing
Officer under section 344 in excess of income
shown in the books of account of such business
undertaking.
Tax year to which such
income relates.
12.   Fair market value of any asset, where it is not
held in forms or modes specified in paragraph
1(1) to (30) of Schedule XVI even after the
expiry of one year from the end of the tax year
in which such asset is acquired.
Tax year immediately fol -
lowing the expiry of lim -
itation period mentioned
in Column B.
13.   Any deemed application under section 341(5)
not actually applied by the registered non-profit
organization for its objects in India within the
period specified in section 341(6).
Tax   year   specified   in
section 341(6) by which
s u c h   a p p l i c a t i o n   i s
required to be made.
Income not to be included in regular income.
338.   While computing the regular income of a registered non-profit organisation,
the following income shall not be included:—