Question And Answer
Subject: How to fill S. No 6. in Re-registration u/s 12AA and 80G of the Act ?
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Date: May 30, 2021
Query asked by SUMIT JAIN

The assessee is a branch office of a foreign company in India approved by RBI and ROC and already registered u/s 12AA and 80G of the Act. The assessee is applying for renewal of registration u/s 12AA and 80G of the Act.

S. No. 6 of the Form 10A (form for renewal of registration) asks the taxpayer to confirm whether the trust deed contains clause that the trust is irrevocable.

In case of assessee, it only have Memorandum of objectives and aims which does not contain any article on irrevocability

Whether the assessee should select Yes or No in S no. 6 in Form 10A ?

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Answer given by

Normally all the Trust deed has the clause on irrevocability and in the event of dissolution ,how the amount is distributed. One has to read the earlier certificate issued under section 80G by the Director of Income -tax (Exemption ) . In some of the trust deed there is a specific clause stating that liquidation of the Society will be according to section 13 and 14 of the Society Registration Act , 1860 .
In CIT (E ) v . Shri Narsinghji Ka Mandir ( 2020) 185 DTR 30 / 312 CTR 307(Raj) (HC) held that Registration cannot be refused on the ground that the Trust deed is not having any provision in relation to disbursement of balance funds in the eventuality of the dissolution of Trust . In Shri. Dhar Sabha Vaishno Devi v. CIT(E) (TM ) Amristar) (Trib), the Tribunal held that Registration cannot be refused on the ground that the Trust Deed does not contain “dissolution clause” and not registering with the Registrar of Societies .

Various courts have held that while granting the registration the Authorities concerned has to see the object clause of the Association whether it is charitable or not .

Therefore unless one reads all the clauses of memorandum of Association it may be difficult to answer the query . The Assessee should approach the tax consultant for proper guidance .

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