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Income-tax (Eighteenth Amendment), Rules, 1998 - S.O. 897(E) - Income TaxExtract MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION NO. 10721 New Delhi, the 12th October, 1998 INCOME-TAX S.O. 897 (E). - In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962 , namely:- 1. (1) These rules may be called the Income-tax (Eighteenth Amendment), Rules, 1998. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Income-tax Rules, 1962 , - (a) after rule 2BB , the following rule shall be inserted, namely :- 2BC. Amount of annual receipts for the purposes of sub-clauses (iiiad) and (iiiae) of clause (23C) of section 10. - (1) For the purposes of sub-clause (iiiad) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any university or other educational institution, existing solely for educational purposes and not for purposes of profit, shall be one crore rupees. (2) For the purposes of sub-clause (iiiae) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, shall be one crore rupees. ; (b) after rule 2C, the following rule shall be inserted, namely:- 2CA. Guidelines for approval under sub-clauses (vi) and (via) of clause (23C) of section 10 . - (1) The prescribed authority under sub-clauses (vi) and (via) of clause (23C) of section 10 shall be the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) to whom the application shall be made as provided in sub-rule (2). (2) An application for approval shall be made in Form No. 56D by any university or other educational institution or any hospital or other medical institution referred to in sub-clause (vi) or sub-clause (via) of clause (23C) of section 10. (3) The approval of the Central Board of Direct Taxes shall at any one time have effect for a period not exceeding three assessment years. ; (c) after rule 2D, the following rule shall be inserted, namely :- 2E. Guidelines for approval under clause (23G) of section 10 . - (1) An application for approval shall be made on or after the 1st day of June, 1998 in Form No. 56E by an enterprise to the Central Government. (2) Every application for approval made under sub-rule (1) shall be accompanied by the following documents, namely:- (a) a copy of certificate of incorporation under the Companies Act, 1956 (1 of 1956) or a copy of the document evidencing the constitution of the enterprise and its legal status; (b) a copy of the project report or agreement in respect of the infrastructure facility duly approved by the Central Government or any State Government or any local authority or any other statutory body, as the case may be; (c) balance sheets and profit and loss accounts for the three previous years immediately preceding the previous year in which the application has been made and also for the relevant part of the previous year in which the application has been made : Provided that an application made under sub-rule (1) may be accompanied by the balance sheets and profit and loss accounts for less than three previous years where an enterprise has been formed at any time during the three previous years immediately preceding the previous year in which the application has been made and also for the relevant part of the previous year in which the application has been made. (3) The Central Government shall approve an enterprise for the purposes of clause (23G) of section 10, if such enterprise is wholly engaged in the business of developing, maintaining and operating any infrastructure facility. (4) The Central Government may, before approving an enterprise, call for such documents (including audited annual accounts) or information from the enterprise, as it thinks necessary in order to satisfy itself that such enterprise is wholly engaged in the business of developing, maintaining and operating an infrastructure facility and that Government may also make such enquiries as it may deem necessary in this behalf. (5) The Central Government shall pass an order in writing while granting approval or refusing approval to the enterprise : Provided that no order refusing the approval shall be passed unless an opportunity of being heard has been given to the enterprise. (6) The approval of the Central Government under sub-rule (5) shall at any one time have effect for a period not exceeding three assessment years. (7) Every enterprise approved under sub-rule (5) shall maintain books of account and get such books audited by an accountant, as defined in Explanation to sub-section (2) of section 288 and furnish the report of such audit duly signed and verified by such accountant to the Central Government before the due date of filing of the return under sub-section (1) of section 139. (8) The Central Government shall withdraw the approval granted under sub-rule (5) if the enterprise -- (a) ceases to carry on infrastructure facility; or (b) fails to maintain books of account and get such accounts audited by an accountant as required by sub-rule (7); or (c) fails to furnish the audit report as required by sub-rule (7). Explanation:- For the purposes of this rule, - (a) the expression enterprise means any enterprise wholly engaged in the business of developing, maintaining and operating any infrastructure facility; (b) the expression infrastructure facility shall have meaning assigned to it in clause (c) of Explanation to clause (23G) of section 10. . 3. In Appendix II to the Income-tax Rules, 1962, after Form No. 56C, the following Forms shall be inserted, namely :- FORM NO.56D [See rule 2CA] Application for grant of exemption or continuance thereof under section 10(23C)(vi) and (via) for the year 1. Name and address of registered office of the University or other educational institution or the hospital or other medical institution referred to in sub-clause (vi) or sub-clause (via) of clause (23C) of section 10. 2. Legal status, whether trust, registered society/others. Please enclose a copy of the certificate of registration/relevant document evidencing legal status. 3. Objects of the university or other educational institution or hospital or other medical institution referred to in serial number 1. 4. Names and addresses of the trustees/office bearers 5. Geographic area over which the activities of the university or other educational institution or hospital or other medical institution referred to in serial number 1 are performed. Enclose details of work done in different places with addresses of branch offices and names and addresses of office bearers in these places. 6. Enclose copies of memorandum of association, articles of association, trust deed, rules/regulations of the university or other educational institution or hospital or other medical institution referred to in serial number 1. 7. Enclose copies of audited accounts and balance sheets for the last three years along with a note on the examination of accounts and on the activities as reflected in the accounts and in the annual reports with special reference to the appropriation of income towards objects of the university or other educational institution or hospital or other medical institution referred to in serial number 1. 8. Has the university or other educational institution or hospital or other medical institution referred to in serial number 1 received any donations from a foreign country to which provisions of Foreign Contribution (Regulations) Act, 1976, applies? Give details. 9. Give assessment particulars:- (i) Ward/Circle of jurisdiction and the last income returned and assessed with permanent account number/GIR number. (ii) Is the income exempt under section 11 ? (iii) Is any recovery of tax, etc., outstanding against the university or other educational institution or hospital or other medical institution referred to in serial number 1 ? (iv) Whether any penalties have been initiated/levied? 10. Total income including voluntary contributions, if any, of the university or other educational institution or hospital or other medical institution referred to in serial number 1 for the previous year relevant to the assessment year for or from which the exemption is sought. 11. Amount of income referred to above that has been or deemed to have been utilised wholly and exclusively for the objects of the university or other educational institution or hospital or other medical institution referred to in serial number 1 (income deemed to have been utilised shall have the meaning assigned to it in sub-sections (1) and (1A) of section 11). 12. Amount accumulated for the objects mentioned in column 3 above. 13. (i) Details of modes in which the funds of the university or other educational institution or hospital or other medical institution referred to in serial number 1 are invested or deposited showing the nature, value and income from the investment; (ii) Details of funds not invested in the modes specified in section 11(5): Sl. No. Name and address of the concern In the case of a company, number and class of shares held Nominated value of the investment Income from the investment 1 2 3 4 5 14. (i) Is the university or other educational institution or hospital or other medical institution referred to in serial number 1 carrying on any business (give details)? (ii) Is the business incidental to the attainment of its objects? 15. Details of nature, quantity and value of contributions (other than cash) and the manner in which such contributions have been utilised. 16. Details of shares, securities or other property purchased by or on behalf of the university or other educational institution or hospital or other medical institution referred to in serial number 1 from any interested person as specified in sub-section (2) of section 13. 17. Whether any part of the income or any property of the university or other educational institution or hospital or other medical institution referred to in serial number 1 was used or applied, in a manner which results directly or indirectly in conferring any benefit, amenity or perquisite (whether converted into money or not), on any interested person as specified in sub-section (3) of section 13 ? If so, details thereof. 18. Amount deemed to be income of the university or other educational institution or hospital or other medical institution referred to in serial number 1 if sub-section (3) of section 11 is made applicable. 19. The income that would have been assessable if the university or other educational institution or hospital or other medical institution referred to in serial number 1 had not enjoyed the benefit of section 10(23C)(vi) or (via). Certified that the above information is true to the best of my knowledge and belief. Place . Date .. . Signature . Designation Full Address Notes: 1. The application form should be sent to the Central Board of Direct Taxes through the Commissioner of Income-tax having jurisdiction over the university or other educational institution or hospital or other medical institution referred to in serial number 1 of this Form. Four copies of the application form along with the enclosures should be sent. 2. Copies of the following documents should be annexed:- (i) Deed of trust/memorandum and articles of association/other documents evidencing legal status of the enterprise; (ii) a list of major office bearers including settlor/members of the Governing body; (iii) a photocopy of the latest certificate under section 80G issued by the Commissioner of Income-tax, if any; (iv) true copies of the assessment orders passed for the last three years, if any; (v) photocopy of communication from the Commissioner of Income-tax with reference to the application of the trust/institution for a registration under section 12A, if any. 3. The applicant shall furnish any other documents or information as required by the Central Board of Direct Taxes or any authority authorised by the Central Board of Direct Taxes. FORM NO. 56E [See rule 2E] Application for approval under section 10(23G) of an enterprise wholly engaged in the business of developing, maintaining and operating any infrastructure facility 1. Name and address of the enterprise. 2. Date and place of formation/incorporation (enclose a copy of certificate of incorporation under Companies Act, 1956 or any other document evidencing the legal status of the enterprise). 3. Objects of enterprise : (i) Main objects (ii) Ancillary objects 4. Capital structure/shareholding pattern. 5. Details of project/agreement with the Central/State Government or local authority or statutory body for developing, maintaining and operating an infrastructure facility. (Enclose copy of project report/agreement). 6. Present nature of business activities Number of years in that business. 7. Names of the associate organisations/group companies/subsidiaries. 8. Details of management: (a) Names of managers, directors with their experience, qualifications and profession (b) Names of the key personnel (c) Organisational structure (d) Board of directors of associate organisations, companies and their subsidiaries. 9. Names and addresses of the bankers. 10. Names and addresses of the auditors. 11. Court cases/litigations in which involved in the last three years. ------------------------------------------------- Signature and designation of the applicant Verification I, _______________, do hereby declare that what is stated above is true to the best of my knowledge and belief. Verified today, the _____________day of_________ 19 .__________ Place___________ Date____________ --------------------------------------------- Signature and designation of the applicant Notes: The application form (in duplicate) should be sent to the Central Board of Direct Taxes along with the following documents, namely :- (i) A copy of the deed of formation under which the enterprise is formed /a copy of the certificate of incorporation issued under the Companies Act, 1956/ other document evidencing the legal status of the enterprise; (ii) Copies of balance sheets and profit and loss accounts for the periods referred to in rule 2E (2)(c) ; (iii) Copy of project report/agreement with the Central/State Government or local authority or statutory body for developing, maintaining and operating an infrastructure facility. . [F. No. 142/52/98-TPL] S. BALASUBRAMANIAN, Under Secy.
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