Query No. 1

In case of Trust Registration under section 10(23C) or may be under section 12AA and wanting approval under section 80G will have to file form no. 10A twice? i.e. once for the trust registration and another for section 80G?


It depends upon the Fact. The Finance Act 2020 inserted a new clause (ac) in section 12A(1) of the Income tax Act, 1961 with effect from April 01,2021.

Further, a new Notification No. 19/2021 dated 26-03-2021 has been issued to give effect to procedure for application of the clause (ac) of section 12A(1) of the Income Tax Act.

Clause (ac) of sub-section (1) of section 12A of the Income Tax Act states that notwithstanding anything contained in clause (a) to (ab), the person in receipt of the income who intends to claim benefit of section 11 & 12 is to make application in prescribed form to PCIT or CIT for registration of the trust. The forms as prescribed for this purpose are Form No. 10A & 10AB. In simple words, every trust who intends to claim benefit u/s 11 & 12 shall make application in Form No. 10A or 10AB, as the case may be, to PCIT or CIT for registration of trust. The procedure for registration was earlier specified in section 12AA. However, section 12AA has been withdrawn now and section 12AB has now been inserted for making effective the registration procedure of trusts. Thus, all trusts which were earlier registered u/s 12A or 12AA shall now have to obtain fresh registration u/s 12AB.

The time limits for registration under section 12A(1)(ac) and section 12(AB) are as under:

Sub-clause of clause (ac) of section 12A(1)

Category of Entity

Time limit for filing application for registration

Applicable Form


Trusts or institutions which are having existing registration u/s 12A or 12AA (Migration from section 12A/12AA to section 12AB)

Within 3 months from 1st April, 2021 i.e. up to 30th June, 2021

Form 10A


Trusts or institutions which are registered under section 12AB and the period of the said registration is due to expire

Atleast 6 months before the expiry of the said period

Form 10AB


New trusts or institutions which have been granted provisional registration under section 12AB (Trusts opting for provisional to final registration for 5 years)

Atleast 6 months before the expiry of the provisional registration or within 6 months of commencement of its activities, whichever is earlier

Form 10AB


Trusts or institutions whose registration has become inoperative due to first proviso to section 11(7) of the Act. Registration u/s 12A or 12AA shall become inoperative from the date on which the trust or institution is granted registration u/s 10(23C)

At least 6 months before the commencement of the assessment year from which the said registration is sought to be made operative

Form 10AB


In any other case (including fresh provisional registration or claiming approval u/s. 80G)

Atleast 1 month before commencement of the previous year relevant to assessment year from which the said registration is sought

Form 10A

What is the validity period of registration under section 12AB

In case of trusts or institutions which are having existing registration u/s 12AA shall apply for registration u/s 12AB online by June 30, 2021 in Form 10A. The validity of registration u/s 12AB shall be for 5 years. However, provisional registration shall be granted for a period of 3 years.

For this purpose, CBDT has issued vide aforesaid Notification making it mandatory for all the trusts/ societies/institutions registered under section 12A and 80G to obtain fresh registration. So, if he trusts / societies / Institutions apply for new registration under section 12AB or migration from section 12A/12AA to section 12AB alongwith obtaining approval under section 80G then, they may apply simultaneously in Form no. 10A.

Query No. 2

The AO had issued refund by mistake on regular assessment. Now he has issued notice under section 154 of the Act, to rectify the mistake, by way of demanding the amount with interest, whether can he charge interest, if yes under which section?


The accrual of interest is automatic under section 220(2) of the Act, and it is made more specific in section 220(3) which provides that the power to grant extension of time for payment of tax in installments would be without prejudice to the levy of interest under section 220(2).

The Karnataka High Court in Biyer Rubber (P) Ltd vs. ACIT [241 ITR 877] has explained that, the nature of interest is compensatory and therefore, the liability which has been created by the statute in respect of “tax, interest and penalty” has to be discharged within the time specified in the notice of demand and any non payment or late payment thereof has to be compensated by paying the interest as provided under section 220(2). If parliament has competence to levy interest for non payment or late payment of tax, then, after the liability is determined, if certain amount of interest is payable, the power to recover and make a provision for levy of interest for non payment of such amount is ancillary and incidental to the main power for levy of tax. Section 220(2) is not violative of article 14 and 19(1)(g) of the constitution. Section 220(2) is valid.

Thus interest on refund could be charged only after complying sub section(2) of section 220 by the AO. Section 220(2) reads as under:

“If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub- section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub- section (1) and ending with the day on which the amount is paid:”

Query No. 3

On the following facts, when TDS has to be deducted?

  • Stamp Duty paid on March 30, 2021

  • Agreement executed on March 31, 2021

  • Agreement Register on April 15, 2021.


Section 195(1) reads as under:

“Any person responsible for paying to a non- resident, not being a company, or to a foreign company, any interest (not being interest on securities) or any other sum chargeable under the provisions of this Act (not being income chargeable under the head” Salaries]) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or ‘by any other mode, whichever is earlier, deduct income-tax thereon at the rates in ‘force”:

Thus it depends upon the fact whether account of the payee is credited first or payment is made first. On the basis of which tax has to be deducted.

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