Pan card for school account which is run by the trust
Vijaya Bhaskar
(Querist) 04 April 2017
This query is : Resolved
Dear Learned Expertise,
Warm Greetings!
As I introduced previously in my various queries about our organization, we are a charitable trust working among people with disabilities, Hiv/Aids and Leprosy in Karnataka. We are pleased to inform that the trust has received the permission to start pre-primary school for the academic year 2017-18. Though we had applied for English medium but the BEO has given us in permission in Kannada medium.
Therefore, in order to deposit the fees and to operate banking transactions, we wanted to an open bank account in the name of the school i.e Hubballi International School. When we approached the bank with the resolution, the bankers are insisting for PAN CARD for school and they are telling school will become a separate entity.
We have tried to explaining the bank that the school is not a separate entity and is run by the existing Trust having PAN CARD. The trust will maintain separate books of account and will consolidate the accounts of school and charity and submit to income tax.
We would like to seek your kind guidance and opinion in this matter and provide us the necessary guidance to proceed further.
adv. rajeev ( rajoo )
(Expert) 04 April 2017
In my opinion if salary of the school staff will be paid by the trust then seperate PAN is not necessary for school, if not then PAN is required to school
Vijaya Bhaskar
(Querist) 04 April 2017
Obvisoulsy, we have to pay the salary from the school account income. If that is the case should we again obtain PF ESI code for school separately, in spite of having existing PF ESI etc for the trust. School be will be under the management of Trust not independently.
I am not sure whether income tax department will provide two PAN for the same management i mean one trust
Please suggest.
Rajendra K Goyal
(Expert) 04 April 2017
It would be better to discuss in detail with your CA / tax consultant.
May raise the query in CA club of India.
Vijaya Bhaskar
(Querist) 04 April 2017
Ya , i raised in CA club also. As of now there are no replies. Looking forward to hear the same. Thank you
Guest
(Expert) 04 April 2017
Since you desire to open account in the name of school, not in the name trust, the school is recognized as an independent body for which PAN is necessary even for the purpose of IT Returns in the name of school for the purpose of accounting of the earnings and expenditure in the name of the school.
Merger of accounts later on with the trust has no relevance for the purpose of Bank account, independent accounting of the income and expenditure transactions and taxation in the name of school.
However, if you open the account in the name of the trust solely for the purpose of keeping account of transactions for the school, say, "******* Trust- Hubballi International Schoo A/c", PAN of the trust can do.
Vijaya Bhaskar
(Querist) 04 April 2017
I will try with this and revert back with the information from bank. Thank you very much Sir.
As always, i am blessed to be on this forum and getting acquainted with so many things in practical. Blessings to all of your for your time and guidance
sanjeev kumar goel
(Expert) 05 April 2017
Dear Vijaya Bhaskar,
As you have mentioned that you are running a charitable trust in Karnataka and now you are intended to open a pre-primary school under the management of the same trust. You are having PAN of trust. There is no problem in opening of Bank account of School under the PAN of Trust. There is no concern that from where you will pay the salary of the staff or so on as I had read the comments above. You just open your school bank account under the proprietorship of the Trust. For example Hubballi International School (Prop name of your trust) and use PAN of your Trust. When the Trust is going to start an activity under its management then there is no need for getting separate PAN for each activity. All the charities are being done under the same trust so all the bank accounts will be operated by the trustees of the Trust and the same PAN of Trust will be applied. If your bank is asking separate PAN for School then explain them that the school is charitable activity of the Trust and the same Trust is managing all its activities. Hence School is not a separate entity from Trust. Trust and school is one and the same thing. Your case is just like an Individual person has his/her own PAN in individual capacity and wants to start a business under his or her proprietorship then for all purposes not for Bank account only PAN of the individual will be applied everywhere like in opening of bank account, filling of ITR or getting registration under VAT Act. Everywhere Individual PAN will be applied. Same is your case. Here the Trust is an entity and is opening school under its proprietorship so PAN of the Trust will be applied in every activity including opening of Bank Account of School but you have to clearly mention the proprietorship of the Trust.
Now I think your problem will be resolved. Still you face any problem from Bank then either write to me at my following E-Mail ID or contact me on phone so that I may satisfy your bank.
E- Mail: adv.sanjeevgoel@gmail.com
Mobile : +91 9899390850
We are tax consultants since more than 40 years.
Regards,
Adv Sanjeev Goel
sanjeev kumar goel
(Expert) 05 April 2017
PS: If you apply for separate PAN of School then the School will become separate entity from Trust.
Guest
(Expert) 05 April 2017
Usha ji,
Thanks for agreeing with me.
Vijaya Bhaskar
(Querist) 05 April 2017
Yes Sanjeev ji, thanks for your reply. What you mentioned was followed till date, for example we have a business unit which is incidental to the object of the trust and we have given the Trust PAN for Vat registration. I think we must try opening account in the name of trust.XXXXXX-hubballi international School. As suggest by Dingra ji. Will try and revert back
sanjeev kumar goel
(Expert) 05 April 2017
Dear Bhaskar ji, you don't have the need to include the trust name with school name for bank account opening. You just apply for opening of School bank account under the ownership or proprietorship of Trust and mention Trust PAN there. Bank will open the account. If you use "xxxxxx....Hubballi International School" as account name it will be too long name and will create problems in account operations. Rest depends upon you but bank can't refuse to open your bank account in the name of School under the management of trust. One more thing alongwith the bank account opening application form, you have to attach a resolution copy passed in the meeting of board of trustees regarding starting of school activity and opening its bank accounts or doing other legal works under the authorisation of trustees (mention the name of two or more trustees) who will operate the bank accounts etc. Without resolution bank will not accept your application for opening of bank account under the trust. Resolution will link the school with trust and then you can use PAN of trust and bank would not object in this.
Regards
Guest
(Expert) 05 April 2017
Sanjeev ji,
As you said, "One more thing alongwith the bank account opening application form, you have to attach a resolution copy passed in the meeting of board of trustees regarding starting of school activity and opening its bank accounts," YOU MAY LIKE TO RE-READ THE ORIGINAL QUERY, in which the querist has already stated about resolution, as follows:
"WHEN WE APPROACHED THE BANK WITH THE RESOLUTION, the bankers are insisting for PAN CARD for school and they are telling school will become a separate entity."
The querist has further stated, "What you mentioned was followed till date."
I hope, you would further like to appreciate that the query necessarily relates to banking laws, rather than taxation laws.
So, if felt necessary, you may like to provide him some really workable advice, as the concerned bank cannot be forced by the queriest or the trust to act upon anyone's opinion at LCI, if that does not fulfill the requirements of banking laws.
sanjeev kumar goel
(Expert) 05 April 2017
Dear Dhingra ji,
As far as banking laws are concerned then for opening bank account bank will fulfill the KYC (Know your customer) norms and for KYC in this case PAN and resolution of trust are required documents with the address proof etc. Bank can't force for separate PAN of school when the school is under the management of the Trust. Here in LCI I think all members are legal experts and they will provide legal opinion to the queriest on which the queriest will take further action. I don't think some will be giving illegal opinion here. Every menber tries to give his or her opinion based upon his or her legal knowledge and experience. If someone has no legal knowledge or experience then he or she should be refrain from giving legal advice here.
Guest
(Expert) 05 April 2017
Dear Mr. Snjeev,
The querist has taken up the issue of PAN only, not the KYC, as he says the requirement of the bank. Moreover, KYC is the later stage, but in a bid to avoid any more labour the banks usually ask for the KYC also at the time of opening of account. PAN is also an authentic proof of KYC, which the banks cannot deny.
So far as your remarks, "If someone has no legal knowledge or experience then he or she should be refrain from giving legal advice here," are concerned, I have seen a few of the members, having no knowledge of law continues to make multiple posts on each and every query that too with their fake ID.
Anyway, let the matter be reconciled between the bank and the querist.
Kumar Doab
(Expert) 23 April 2018
M/s Yesbank is clear in IT's publication;
4. Certified copy of PAN card in the name of the Trust
https://www.yesbank.in/pdf/list_of_documents_required_for_opening_account_pdf
Kumar Doab
(Expert) 23 April 2018
IT=@PSD
The entity that has all of sudden adopted another fake ID ‘Guest’ pops up with multiple fake ID’s many of which have been shunted out/blacklisted..
IT taunts on anyone that appears as Guest has not rescued IT.
