Beloved Members,

Namaskar.

I am very happy to inform that our esteemed association of AIFTP is going to be step into New era of 24th National Convention to be held at Lucknow the capital city of Uttar Pradesh wherein about 500 delegates are attending the said function and grace the occasion and make it memorable one. My tenure as a National President is coming to an end on 31.12.2021. After Pune 45th Foundation Day Celebrations and National Tax Conference of AIFTP, Western Zone again conducted One Day Solapur Tax Conference and another One Day Tax Conference at Ratnagiri. Both conferences well organized and attended, the papers and the technical sessions were also very well planned and within time schedule for the benefit of the members and delegates from the Solapur (Maharashtra) section of Western Zone, AIFTP. We are expecting to get 20 to 25 Life Members and the Solapur Tax Bar Association affiliated to AIFTP. i.e. on 4th December 2021. The Solapur Tax Bar and other AIFTP members has celebrated my birthday in a grand manner in the Inaugural Session on the day relating to Ratnagiri Tax Bar Association. I personally requested the Chairman and the Vice Chairman to please enroll as an Association Member of AIFTP for the cause of fraternity knowledge development and they have agreed to join with AIFTP along with 10 to 20 Life Member on 5th of December, 2021. The reception and hospitality were very much impressed by me as a National President in this journey of 2021. Coming to the future programmes, we are having One Day Vindhya Tax Conference at Rewa on 18th December 2021, and on 22nd of December, 2021 we are having another One Day Tax Conference at Hyderabad by the AIFTP (SZ) and finally at Lucknow.

Relating to the Direct Tax Journal, the team of Journal Committee from Mumbai Dr. K. Shivaram, Sr. Advocate and Past President, AIFTP, CA. Mitesh Kotecha, Shri Kishor Vanjara, CA. Janak K. Vaghani, National Vice President, AIFTP (WZ) and Editor Shri K. Gopal, Advocate and all Journal Committee Members worked tremendously and designed Executive Journal for the entire year of 2021. I am very thankful to all of them for the great and excellent work rendered towards the fraternity of AIFTP. In this connection, I would like to request all the members of AIFTP to generously subscribe the Direct Tax Journal for the benefit of professionals in their day-to-day transaction before various authorities physically and virtually from time to time. The Direct Tax Journal is a mouth piece of AIFTP from the last so many years. All activities carried over by the Direct Tax Journal for the members information in a large way, I must congratulate all the article writers in this journal of Direct & Indirect Taxes for their valuable co-operation in relating to the excellent topics which are worth reading & useful for all the fraternity in relating to Direct Tax, some of Indirect Tax (GST) also. Once again I thankful to the all members of AIFTP connected with the Nobel cause of educational service without any self-benefit by the Federation. The team work once again proved a great workmanship. Wish you Merry Christmas and Prosperous New Year & Pongal.

Long live AIFTP

Place: Eluru 
Dated: 18-12-2021

M. Srinivasa Rao
National President, AIFTP

In the months of November and December of every year, the consultative process for the finance bill for the next fiscal year starts. All the stakeholders, including professional organisations like ours, are granted audience to make our submissions with respect to direct as well as indirect taxes provisions. As an association of professionals, we make representations which are rational and help seamless collection of taxes, both under direct and indirect tax laws. This year too, this process has taken place. However, through this editorial, I would like to underline certain issues which are causing concern to organisations which are carrying out charitable activity. Especially, those organisations which have risen to the occasion during the COVID-19 pandemic and didn’t spare any stone unturned to provide relief to the needy.

The provisions dealing with charitable organisations give an impression that they are based more on mistrust rather than on a bona fides belief that the organisations are carrying out a genuine activity. The maze of rules and the compliance burden on the organisations put pressure on the scarce resources of the charitable organisation. While these are some general observations, the specific issue which I would like to point out is with respect to the Explanation 2 to section 10(2) and Explanation 5 to section 11( 1). These provisions were introduced through Finance Act, 2021. The newly inserted explanation provides that calculation of income to be made only by considering the receipts applied during the year without any set off or deduction or allowance of any excess application, of any of the year preceding the previous year. The earlier position of allowing surplus application towards the charitable objects of the organization in the subsequent years was just and equitable. Many courts had also recognised and upheld the said concept. However, now these amendments deprive the genuine charitable organisations, a logical benefit of funding the charitable activity carried in the earlier years out of the current or future donations . The position taken by the legislature with respect to this is unjustified and sends a message that there is a disincentive if an organisation carries on charitable activity. I personally feel that it is unfortunate that these provisions have been introduced through Finance Act, 2021 when the whole world was struggling with COVID-19 pandemic. To say the least, these provisions are insensitive and appalling. Similarly, the amendments made with respect to corpus donation also suggest that the government is not inclined to encourage any genuine charitable activity. The requirement of seeking fresh registration under section 12 AB of the Income tax Act, 1961 has also created many challenges to the charitable organisations. These certificates, issued pursuant to the fresh applications made in the above mentioned statutory provisions, mention several conditions which are not mandated by the statute. We professional organisations should take up these issues with the Authorities and make appropriate representations. If need be, we should explore the possibility of preferring a public interest litigation against such arbitrary and unreasonable actions.

In this issue of the AIFTP-Journal eminent professionals have contributed their articles. I thank them for sparing their valuable time for the journal. We are publishing the award winning research papers written by students who participated in the Padma Vibhushan N. A. Palkhivala Memorial National Research Paper Competition 2021 to provide encouragement and exposure to them.

K. Gopal,
Editor