Income tax return of an educational institution

saju sathyadevan (Querist) 26 October 2015 This query is : Resolved
Sir,

A non-statutory query letter is received by a school from Income tax department for entering into financial transactions through AIR - Non quoting PAN u/s 139A(5) & 272B of the Income tax Act, 1961. The department is asking for the school's PAN and the copy of ITRs filed. Copy of letter is attached herewith.

Here, I would like to submit that the school don't have a PAN number as it is run by an association and the said association is having PAN. But the Association is not filing its Income tax returns. This association is solely made for chariatable purposes which consists of about 600 members. Members are elected as President, VP, Secretary through election after every two years. It is registered with Registrar of Firms and Societies since 1977. This association or school is not registered u/s 12A of IT Act.

My query is :
1. How shall I reply. Shall I submit the PAN of Association and also submit that no ITRs are being filed?

2. Whether Income from School, which is solely used for chariatable purpose, is taxable for the association. Isn't any exemption available?

3. During last three years the school is showing huge profit as the maximum part of the income is spent for extension of school building which is a capital expenditure and which increases the value of Asset (Building). A very less amount is left with as cash-in-hand and bank balance in the end of financial year. That way the Association will have huge tax liability. How to tackle with the situation? Please guide.

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Guest (Expert) 26 October 2015
The CA Club of this Same forum could Guide you in the Professional way From qualified CAs,Contact them.Their E Mail ID is Just below in this Thread

Rajendra K Goyal (Expert) 26 October 2015
Consult local tax consultant and proceed as per his advice.

R.K Nanda (Expert) 27 October 2015
consult tax lawyer.

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