CBDT Relaxes Requirement of e-Filing of Form No. 3CF
CBDT Relaxes Requirement of e-Filing of Form No. 3CF
Central Board of Direct Taxes, Government of India (CBDT) vide Circular No. 5/2022 dated 16th March 2022 relaxes the requirement of electronic filing of the application in Form No. 3CF for seeking approval under section 35(1)(ii)/(iia)/(iii) of the Income-tax Act,1961 for a limited period upto 30th September 2022 or till the date of availability of Form No. 3CF for electronic filing on the e-filing website.
Know more about the Tax deductions on Donations
Form 3CF – Application for approval of scientific research program under section 35(2AA) of the Income-tax Act, 1961
Every donor to a scientific research association, a university, college, or other institution is entitled to get a deduction of one and one-fourth times of the donations paid by them subject to conditions provided in the Income Tax Act.
The association, university, college, or institution can use the donations for the following research purposes
- Scientific research
- Research in social science or statistical research
To get the aforesaid benefit, the institution, etc. has to make an application in Form No. 3CF to the Central Government.
The income of an institution notified under section 35(1)(ii) is also exempt from tax under section 10(21) subject to fulfillment of conditions regarding the application of its income for scientific research purposes; its accumulation and use under section 11(2) and 11(3); and its investment as per modes prescribed under section 11(5).
If the exemption is sought under section 10(21) also, then, annexure to Form 3CF has also to be filled up by the assessee.
Important points while filling up Form No.3CF
The application Form No. 3CF may be filled up carefully, having regard to the provisions contained in sections 35(1)(ii)/(iii), 11(2), 11(3), and 11(5).
As the benefit is sought to be given in respect of scientific research, research in social science, or statistical research activities, it has to be ascertained whether research is the sole objector only one of the objects of the university, association, or institution.
In case, research is only one of the objects of the institution, then, it is incumbent on the institution to maintain separate books of account and furnish Income and Expenditure and Balance Sheet (Statement of Affairs) in respect of research activities. Such accounts have to be audited by an auditor, who should certify that the expenditure incurred was for research work.
Manual Filing of Form 3CF
Form 3CF is an Application Form for approval under clauses (ii)/(iia)/(iii) of sub-section (1) of section 35 of the Income-tax Act in the case of a Scientific Research Association.
Rule 5C and Rule 5F of the Income-tax Rules, 1961 as amended by the Income-tax (Sixth Amendment) Rules, 2021 effective from 1.4.2021 requires electronic filing of Form 3CF with digital signature or EVC
However, due to difficulties in the electronic filing of Form No.3CF on the new e-filing portal, the government has decided to allow the institutions to manually apply for approval under section 35 in Form No. 3CF till the same is made available on the e-filing portal or 30th September 2022, whichever is earlier.
Documents Require for Filing Form 3CF
The following documents are required to be attached along with the Form 3CF:
- If the applicant is constituted under an instrument, self-certified copy of the instrument
- If the applicant is constituted otherwise than under an instrument, self-certified copy of the document
- Evidencing the creation, or establishment of the applicant; self-certified copy of the registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of
- Public Trusts or another registration document, as the case may be; where past registration under section 35 rejected then copy of the order of rejection ( if the answer to 5 is yes)
- Self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010, if the applicant is registered under such Act;
- self-certified copy of existing Notification approving under section 35;
- A comprehensive note on research activities of the applicant;
- Self-certified copy of audited annual accounts of the applicant for the last three years;
- Self-certified copy of Donors, along with their names, complete postal address, and the amount paid by each of them to the applicant during the last three years. Mention PAN or aadhar of donors paying the sums over fifty thousand rupees in any of the three financial years
- Note on research activities undertaken by the applicant.
Due Date for Filing Form 3CF
Due to the non-availability of Form no. 3CF on the e-filing portal, the CBDT has allowed the applicants seeking approval under section 35(1)(ii)/(iia)/(iii) to file Form 3CF physically. The Form can be filed manually till 30-09-2022 or till the availability of the Form for electronic filing on the e-filing website.
Information Required for filling Form No.3CF
- Details of whether Income & Expenditure Account and Statement of Affairs are separately maintained for research activity and audited by the auditor;
- Details of Whether income has been applied or accumulated, as the case may be, for research purposes only;
- Details of Whether surplus funds are invested in the modes prescribed in section 11(5);
- Details of research projects completed and research projects intended to be taken up in the ensuing years; and
- Details of any benefit granted to the interested persons or major donors.
Note: If research is the only object, then the entity is classified as ‘Association’ for notification purposes; and if it is one of the objects, then it is classified as ‘Institution’.
Application Procedure for Form No. 3CF
The applicant shall send the application in Form No. 3CF to Member (IT), Central Board of Direct Taxes.
CBDT Relaxes Requirement of Electronic Filing of Application in Form No. 3CF
Form No. 3CF
If any defect is noticed in the application in Form No. 3CF or if any relevant document is not attached thereto, the Commissioner of Income-tax, the Director of Income-tax shall serve a deficiency letter on the applicant before the expiry of one month from the date of receipt of the application form in his office.
The applicant shall remove the deficiency within fifteen days from the date of service of the deficiency letter or within such further period which, on an application made on this behalf may be extended, so, however, that the total period for removal of deficiency does not exceed thirty days, and if the applicant fails to remove the deficiency within thirty days so allowed, the Commissioner of Income-tax or, as the case may be, the Director of Income-tax shall send his recommendation for treating the application as invalid to the Member (IT), Central Board of Direct Taxes.
The Central Government, if satisfied, may pass an order treating the application as invalid.
If the application form is complete in all respects, the Commissioner of Income-tax or the Director of Income-tax may make an inquiry and send his recommendation to the Member (IT) for grant of approval or rejection of the application before the expiry of the period of three months to be reckoned from the end of the month in which the application form was received in his office.
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