Decide charity applications in time or face action: CBDT to I-T dept

In order to fine-tune procedures in the charitable institutions sector, CBDT has directed the taxman to strictly follow stipulated deadlines for allowing or rejecting fresh registration of bodies seeking tax exemptions or else face "administrative" action.

Fresh registration for institutions seeking charitable body status for rendering public service are made under Section 12AA of the I-T Act and as per existing guidelines, a tax officer has to decide either in favour or against such an application within a time period of six months.

"...It has been brought to the notice of the Board that the said time limit has not been observed in some cases... The time limit of six months is to be strictly followed by the Commissioner of Income Tax (Exemptions) while passing order under section 12AA.
 

"The Chief Commissioner of I-T (Exemptions) may monitor the adherence of prescribed time limit and initiate suitable administrative action in case laxity in adhering to the same is noticed," a latest CBDT order, accessed by PTI, said.

Under the said Act, when an applicant seeks the charitable tag and subsequent exemption from paying taxes, tax authorities call for documents or information from the institution in order to verify genuineness of their activities and after satisfactory documentation about the objectives of the entity, the taxman either issues an order allowing registration of the institution or rejects their plea.

A senior official said the order was issued in order to streamline the cases of charitable and exemptions-seeking bodies and also to check any possible delay in these applications which lead to cases of taxpayer grievances and complaints.

Once an institution is granted the status of being a charity-doing body, it is allowed exemption in paying partial or full tax on its income.

The CBDT, in the last few months, has initiated a number of projects and has issued guidelines to streamline and bring efficiency in I-T department procedures in order to not only ease grievances and instances of corruption in the department but also to reduce litigation.