Standardizing the process of filing application under section 10(46) of the Income Tax Act, 1961.

Income Tax Exemption u/s. 10(46)-Statutory Body or Authority

Sec 10 (46) is introduced in the budget of 2012-13 with the specific object by exempting income of statutory body/authority/board/commission constituted by the Central or state govt. with the object of regulating or administering any activity on behalf of general  public. This section provides that any specified income of specified amount arising to a body or authority or trust or commission constituted by Central, state govt. and which is not engaged in any commercial activity and is notified in official gazette is exempt. And the Statutory body/authority/board/commission which can be fall under this section are notified by the govt. by way of notification time to time.  

Sec 10 (46) of Income Tax Act, 1961 (Bare Act)

Any specified income arising to a body or authority or Board or Trust or Commission (by whatever name called) which—

(a)  has been established or constituted by or under a Central, State or Provincial Act, or constituted by the Central Government or a State Government, with the object of regulating or administering any activity for the benefit of the general public;

(b)  is not engaged in any commercial activity; and

(c)  is notified by the Central Government in the Official Gazette for the purposes of this clause.

Explanation.—For the purposes of this clause, "specified income" means the income, of the nature and to the extent arising to a body or authority or Board or Trust or Commission (by whatever name called) referred to in this clause, which the Central Government may, by notification in the Official Gazette, specify in this behalf;

Notified body/ commissions/Agency or committees are

1.       NATIONAL SKILL DEVELOPMENT CORPORATION –N/N11 2012 dtd. 28-2-12

2.       CCI-Competition Commission of India - N/N 12 2012 dtd. 28-2-2012

3.       ASSAM STATE AIDS CONTROL SOCIETY -N/N 27/2013 dtd. 30-3-2013

Further to strengthen regulate and regularize the application process to get benefit of exemption u/s 10(46) govt. issued a new notification on June 24^th 2013. This notification is all about standardizing the process of filling application u/s 10(46) this notification discussed in detail the format of application documents to be enclosed and to whom these will be sent. Below given are notification issued by govt.

1.       Standardizing the process of filing application under section 10(46) of the Income Tax Act, 1961

GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) CENTRAL BOARD OF DIRECT TAXES New Delhi the 24 June 2013 Subject: Standardizing the process of filing application under section 10(46) of the Income Tax Act, 1961. Under section 10(46) of the Income-tax Act, specified income arising to a body or authority or Board or Trust or Commission, established or constituted by or under a Central or State Act or by a Central or State Government with the object of regulating or administering any activity for the benefit of general public, would be exempt from tax subject to the condition that the said entity is not engaged in any commercial activity. The entity eligible to claim tax exemption u/s 10(46) is required to be notified by the Central Government in the official Gazette. 2. At present, there is no uniformity in the manner in which applications under section 10(46) are being filed by applicants. In order to standardize the manner of filing application under section and to avoid procedural delay in processing the same applicants are advised to file the applications along with requisite enclosures to the Commissioner of Income-tax/Director of Income tax under whose jurisdiction their cases fall. The applicants are further advised to adopt the Format laid down in para 3 below while submitting the applications u/s 10(46) of the IT Act. The Applicant shall also send a copy of the said application along with all its enclosures to the Under Secretary (ITA-l), Central Board of Direct Taxes, accompanied by the acknowledgement receipt forwards evidence of having furnished the application in the office of jurisdictional CIT/DIT. 3. Format of Application Seeking Notification u/s 10(46) shall be as under:- Sr. no. Requirement Details 1  Name of the Applicant 2  Address 3  PAN 4  Status 5  Returned Income of previous two years and taxes paid (if applicable). Pl. enclose copy of returns filed. 6  Designation of Assessing Officer 7 Eligible category i. Body ii. Authority iii. Board iv. Trust v. Commission vi. Any other (Pl. specify) 8 Objects/Purpose for which set up/created. Pl. file supporting documents. 9 Whether created with object of regulating or administering any activity for benefit of general public? If yes, details of activity so regulated or administered. Pl. file supporting documents. 10 Nature of Activity 11 Are any of the activities carried out commercial in nature? Pl. furnish justification to the answer. 12(A) Whether established or constituted by a Central or State Act? Pl. give details. (B) Whether constituted by a State or Central Government? Pl. specify. (C)  Copy of such Deed/Notification/Act or other relevant document establishing or constituting the entity seeking exemption. 13 Nature of Revenue Streams 14 Nature of income sought to be notified for purpose of section 10(46) 15 Basis of seeking notification u/s 10(46) 16(A) Whether already registered u/s 12A? If yes, Pl. furnish copy of order granting registration. (B) If already registered u/s 12A, Pl. explain why notification u/s 10(46) is being sought. 17 Whether (a) Exemption u/s 11 & 12 has been denied by the Assessing Officer. If yes, when and on what grounds. (b) Registration u/s 12AA has been rejected earlier. If yes, when and on what grounds. 18 Whether approval u/s 10(23C)(iv) has been (a) applied for (If yes, when), (b) granted (if yes, pl. furnish the copy of relevant order) (c) such request has been rejected earlier. If yes, when and on what grounds. Pl. furnish a copy of relevant order. 19  Pl. furnish copies of Balance Sheet, Profit & Loss Account or Income & Expenditure statement of last three years, along with schedules. 20 Whether the accounts are required to be audited? If yes, whether complied with? 21 Whether any penalty imposed or prosecution launched for any violation of law in the past? If yes, Pl. inform when such order was passed and what was the violation. Copy of relevant order be enclosed. 22 Any other information or document/ information brochure/ Annual Report etc. [F. No. 196/6/2013-ITA-1] (Deepshikha Sharma) Deputy Secretary to the Government of India

2.       SECTION 10(46) OF THE INCOME-TAX ACT, 1961 - EXEMPTIONS - STATUTORY BODY/AUTHORITY/BOARD/COMMISSION - NOTIFIED BODY OR AUTHORITY - NATIONAL SKILL DEVELOPMENT CORPORATION

Notification

NOTIFICATION NO. 11/2012 [F.NO.142/15/2011-SO (TPL)], DATED 28-2-2012

In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961(43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the National Skill Development Corporation, a body constituted by the Central Government, in respect of the specified income arising to the said Corporation , as follows:-

(a) long-term or short-term capital gain out of investment in an organisation for skill development;

(b) dividend and royalty from skill development venture supported or funded by National Skill    Development Corporation;

(c) interest on loans to Institutions for skill development;

(d) interest earned on fixed deposits with banks; and

(e) amount received in the form of Government grants.

2. This Notification shall be applicable for the specified income of the National Skill Development Corporation for the financial year 2011-12 to financial year 2015-16.

3. This notification shall be effective where-

(i) the activities and the nature of the specified income of the National Skill Development Corporation remain unchanged throughout the financial year; and

(ii) the National Skill Development Corporation files return of income in accordance with clause (g) of sub-section (4C) section 139 of the Act.

3.       Section 10(46) of the Income-tax Act, 1961 – Exemptions – Statutory body/Authority/Board/Commission – Notified body or authority – Competition Commission of India

Notification

Notification no. 12/2012 [F.NO.142/15/2011-SO (TPL)], DATED 28-2-2012

In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the Competition Commission of India, a Commission established under sub-section (1) of section 7 of the Competition Act, 2002 (Act 12 of 2003), in respect of the specified income arising to the said Commission, as follows:-

(a)  amount received in the form of Government grants;

(b)  fee received under the Competition Act, 2002; and

(c)  interest income accrued on Government grants and interest accrued on fee received under the Competition Act, 2002.

2. This Notification shall be applicable for the specified income of the Competition Commission of India for the financial year 2011-12 to financial year 2015-16

3. The Notification shall be effective where-

(i)  the activities and the nature of the specified income of the Competition Commission of India remain unchanged throughout the financial year, and

(ii)  the Competition Commission of India files return of income in accordance with clause (g) of sub-section (4C) section 139 of the Act.

4.       ECTION 10(46) OF THE INCOME-TAX ACT, 1961 - EXEMPTIONS - STATUTORY BODY/AUTHORITY/BOARD/COMMISSION - NOTIFIED BODY OR AUTHORITY - ASSAM STATE AIDS CONTROL SOCIETY

Notification

NOTIFICATION no. 27/2013 [F.NO.196/55/2012-ITA.I]/SO 859(E), DATED 30-3-2013

In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the 'Assam State AIDS Control Society', a body created by way of notification in this regard by the Government of Assam, in respect of the following specified income arising to the said Society, namely:-

"amount received in the form of grants-in-aid from the Central Government and other international development agencies such as World Bank, UNAID (Joint United Nations Programme on HIV/AIDS), USAID (United States Agency for International Development), GFATM (Global Fund to fight AIDS, Tuberculosis and Malaria) through the Government of India".

2.This Notification shall be deemed to have been apply for the Financial Year 2011-2012 and shall applywith respect to the Financial Years 2012-2013, 2013-2014, 2014-2015 and 2015-2016.

3. The notification shall be effective subject to the following conditions, namely:-

(a) the 'Assam State AIDS Control Society' does not engage in any commercial activity;

(b) the activities and the nature of the specified income of the 'Assam State AIDS Control Society' remain unchanged throughout the financial year; and

(c) the 'Assam State AIDS Control Society' files return of income in accordance with the provision of clause (g) of sub-section (4C) section 139 of the Income-tax Act, 1961.

4. The grants from various international development agencies shall be received and applied in accordance with the prevailing rules and regulations.

Link
http://www.incometaxindia.gov.in/archive/BreakingNews_StandardizingApplicationFiling_24062013.pdf