TMI BlogGuidelines regarding applicability of Sec.10(23C)(iv) & (v).X X X X Extracts X X X X X X X X Extracts X X X X ..... with the charitable purpose; and (c) it should have attained importance throughout India, or throughout any State or States. The underlying idea in this is to grant exemption to select, exceptionally deserving institutions having some stature to justify the notification. 3. Similarly, the basic requirements for issue of notification regarding grant of exemption from income-tax under section 10(23C)(v) are as follows:- (a) The trust (including any other legal obligation) or institution should be either wholly for public religious purposes, or wholly for public religious and charitable purposes; and (b) its affairs should be administered and supervised in a manner to ensure that its income is properly applied towards its objects. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re maintained for such business. (vi) The notification shall have effect only for such assessment years as are specified therein, not exceeding three assessment years at a time. 5. The conditions spelt out in the preceding paragraphs are cumulative and not independent of each other. If any one conditions is not met, the applicant will not qualify for notification under section 10(23C)(iv)/(v). 6. Assessment Year 1990-91 is the first assessment year from which the above mentioned provisions will be applicable. It is likely that once a fund, trust or institution is notified from this year onwards, the Assessing Officer may erroneously recommend a case for exemption, as in the past, on the basis of earlier notifications alone, without ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely placed on the Government's decision in the earlier period, and recommendation for fresh notification is mechanically made. It is reiterated that this relaxation to the normal provisions under sections 11 to 13 of the Income-tax Act is not to be treated in a routine fashion, and the applications should be carefully processed to ensure that only the exceptionally deserving institutions avail of this facility. It is, therefore, very important that detailed reports be given on the nature of activities and expenses based on a thorough examination of accounts, annual reports, etc. of past years. An attempt has to be made to ascertain whether the trust, fund or institution continues to follow its avowed objects, applies its fund properly to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 13(3) of the Act. In this connection, reference is invited to paragraph (c) of Board's circular No.557 dated 19th March, 1990. 12. Normally, a fund or an institution, that has been identified as a charitable one, fulfilling the conditions of section 80G of the Act, cannot be considered for notification under section 10(23C)(v) and vice versa. This is because section 80G, unlike Section 10(23C)(v) recognises only cases that are wholly and exclusively charitable in nature. 13. The reporting officers must send their detailed comments in the standard proforma (copy enclosed). The recommendations must be adequately reasoned and supported with material to justify them. They should also cover the important aspects mentioned above, or in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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