Executive Summary:
This notification, dated November 27, 2019, announces the Central Government's approval of Ms International Centre for Research in Agroforestry, South Asia Regional Programme (ICRAF) as a Scientific Research Association under Section 35(1)(ii) of the Income-tax Act, 1961, effective from the assessment year 2019-2020. The approval is subject to specific conditions regarding the organization's objectives, research activities, financial reporting, and donation management. Non-compliance may lead to withdrawal of the approval.
Key Points / Main Content:
Approval of Organization:
* Ms International Centre for Research in Agroforestry, South Asia Regional Programme (ICRAF) is approved as a Scientific Research Association.
Applicable Legislation:
* The approval is under Section 35(1)(ii) of the Income-tax Act, 1961, read with Rules 5C and 5D of the Income-tax Rules, 1962.
Effective Period:
* The approval is effective from the assessment year 2019-2020 onwards.
Conditions for Approval:
* The organization's sole objective must be to undertake scientific research.
* The organization must carry out scientific research independently.
* Separate books of accounts must be maintained for scientific research funds.
* These accounts must be audited by a qualified accountant.
* An audit report, duly signed and verified, must be furnished to the Commissioner/Director of Incometax by the due date for income return filing under Section 139(1) of the Income-tax Act, 1961.
* A separate statement of donations received and amounts applied for scientific research is required, certified by the auditor, and must accompany the audit report.
* Prior permission is required from the Indian Council of Agricultural Research (ICAR)/Department of Agricultural Research and Education (DARE), Ministry of Agriculture & Farmers Welfare, before receiving grants/donations under Section 35(1)(ii) of the Income-tax Act, 1961.
* Grants/donations received must be exclusively used for research in India.
Withdrawal of Approval:
* The Central Government may withdraw the approval if the organization:
* Fails to maintain separate books of accounts.
* Fails to furnish its audit report.
* Fails to furnish the statement of donations received and sums applied for scientific research.
* Ceases to carry on its research activities or its research activities are not found to be genuine.
* Ceases to comply with Section 35(1)(ii) of the Income-tax Act, 1961 and Rules 5C and 5D of the Income-tax Rules, 1962.
Impact Analysis:
Ms International Centre for Research in Agroforestry (ICRAF):
Impact:
* ICRAF is now recognized as an approved Scientific Research Association, making it eligible to receive grants/donations under Section 35(1)(ii) of the Income-tax Act, 1961, subject to meeting specified conditions.
Action Required:
* Ensure compliance with all conditions outlined in the notification, including maintaining accurate financial records, undergoing audits, and obtaining necessary permissions for grants/donations.
Commissioner/Director of Income-tax:
Impact:
* Responsible for overseeing ICRAF's compliance with the conditions of approval.
Action Required:
* Review the audit reports submitted by ICRAF and ensure adherence to the prescribed requirements and timelines.
Donors to Ms International Centre for Research in Agroforestry (ICRAF):
Impact:
* Potential donors can now claim tax benefits under Section 35(1)(ii) of the Income-tax Act, 1961, for donations made to ICRAF, provided ICRAF adheres to the conditions of the approval.
Action Required:
* Verify that ICRAF maintains its approved status and meets the necessary conditions before making donations to ensure eligibility for tax benefits.
Key Entities Referenced
Income-tax Act, 1961: The primary legislation governing income tax in India, referenced in the context of approvals for scientific research associations.
Income-tax Rules, 1962: The rules framed under the Income-tax Act, 1961, specifying procedures and guidelines, particularly rules 5C and 5D.
Central Government: The approving authority for organizations under section 35 of the Income-tax Act.
Ms International Centre for Research in Agroforestry, South Asia Regional Programme, NASC Complex, Delhi: The organization approved for the purpose of clause ii of subsection 1 of section 35 of the Income-tax Act, 1961.
Central Board of Direct Taxes: A department under the Ministry of Finance responsible for direct tax administration.
Ministry of Finance: The ministry under which the Department of Revenue and Central Board of Direct Taxes operate.
Indian Council of Agricultural Research: An autonomous organisation under the Department of Agricultural Research and Education (DARE), Ministry of Agriculture Farmers Welfare. Grants/donations under us.35(1)(ii) of the Income-tax Act, 1961 requires prior permission from the ICAR.
New Delhi: The city from which the notification was issued.
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6136 GI/2019 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
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[[[[अिधसूचना स.ं 99/2019/फा. सं. 203/04/2019-आईटीए.-।।]]]]
राजाराजVे व री आर., अवर सिचव
MINISTRY OF FINANCE
(Department of Revenue)
(Central Board of Direct Taxes)
NOTIFICATION
New Delhi, the 27th November, 2019
S.O. 4281(E).—It is hereby notified for general information that the organization M/s International Centre for
Research in Agroforestry, South Asia Regional Programme, NASC Complex, Delhi (ICRAF) (PAN:-AATI4803K)
has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the
Income-tax Act, 1961 (said Act), read with Rules 5C and 5D of the Income-tax Rules, 1962 (said Rules), from
Assessment year 2019-2020 onwards in the category of ‘Scientific Research Association’, subject to the following
conditions, namely:-
(i) The sole objective of the approved Organization shall be to undertake scientific research;
(ii) The approved organization shall carry out scientific research by itself;
(iii) The approved organization shall maintain separate books of accounts in respect of the sums received by it for
scientific research, reflect therein the amounts used for carrying out research, get such books audited by an
accountant as defined in the explanation to sub-section (2) of section 288 of the said Act and furnish the report
of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of
Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-
section (1) of section 139 of the said Act;
(iv) The approved organization shall maintain a separate statement of donations received and amounts applied for
scientific research and a copy of such statement duly certified by the auditor shall accompany the report of audit¹Hkkx IIµ[k.M 3(ii)] Hkkjr dk jkti=k % vlk/kj.k 3
referred to above. (The approved organization shall receive grants/donations u/s.35(1)(ii) of the said Act after
taking prior permission from the Indian Council of Agricultural Research (ICAR)/Department of Agricultural
Research and Education (DARE), Ministry of Agriculture & Farmers’ Welfare and the grants/donations so
received shall be exclusively utilized for the purpose of conducting research in India only.
2. The Central Government shall withdraw the approval if the approved organization: -
(a) fails to maintain separate books of accounts referred to in sub-paragraph (iii) of paragraph 1; or
(b) fails to furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or
(c) fails to furnish its statement of the donations received and sums applied for scientific research referred
to in sub-paragraph (iv) of paragraph 1; or
(d) ceases to carry on its research activities or its research activities are not found to be genuine; or
(e) ceases to conform to and comply with the provisions of clause (ii) of sub-section (1) of section 35 of
the said Act read with rules 5C and 5D of the said Rules.
[Notification No. 99/2019/F. No. 203/04/2019/ITA-II]
RAJARAJESHWARI R. , Under Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.