BHUBANESWAR: The Income Tax department has flagged persistent delays in submission of statutory documents by several public and private institutions in Odisha and urged the state government to step in for ensuring timely compliance to safeguard their tax exemption status.
As per the mandatory timelines prescribed under the Income Tax Act, 1961, any trust, society or institution established for charitable or religious purposes, including those wholly or substantially financed by the government are required to obtain registration under section 12AB in order to be eligible for exemption of income tax, in respect of charitable activity carried by them.
Citing that a large number of government organisations, trusts and societies in the state are failing to adhere to the norm, principal chief commissioner of Income Tax (exemptions), New Delhi Debjyoti Das has urged chief secretary Manoj Ahuja to instruct the departments for timely submission of statutory forms to avoid unintended tax liabilities.
He underlined that registration alone is not sufficient to retain tax exemption. One of the essential conditions, Das said, is that such entities must conduct audits and submit audit certificates in the prescribed forms within the statutory deadlines. “Non-compliance would lead to imposition of income tax, as per the statutory provisions,” Das cautioned.
This came after the principal chief commissioner noticed delays and non-compliance across several government-run or government-supported entities in Odisha. He has requested the chief secretary’s intervention to sensitise departments and institutions under his jurisdiction about the importance of adhering to statutory requirements, including conducting audits, filing audit reports in prescribed forms and submitting income tax returns on time.
“It is necessary that all statutory compliances are completed within due dates to ensure that such institutions continue to enjoy the tax exemption status granted to them,” Das clarified.
As part of corrective measures, the I-T department has also instructed commissioners of Income Tax (exemptions) having geographical jurisdiction in the state to coordinate with the state government.
The officers will facilitate outreach programmes to make the charitable institutions and government entities aware of compliance requirements and reduce procedural difficulties.
A Finance department official said all departments have been asked to ensure that institutions regulated by them immediately obtain the required registration and submit all pending statutory documents without further delay. The charitable institutions, trusts and autonomous bodies include hospitals, colleges, cooperative societies and other government entities.