Registration of Electoral Trust under section 8 of Companies Act

A. Procedure for Approval

  1. The application for approval under clause (22AAA) of section 2 of the act shall be made in duplicate in Form A, on or before the 31st day of July of the of the previous year relevant to the assessment year for which the approval is sought, to the commissioner of Income Tax or the Director of Income Tax, as the case may be having jurisdiction over the applicant.
  2. The applicant shall also send a copy of the application to the member (Income Tax),Central Board of Direct Tax accompanied by the acknowledgement receipt evidencing submission of application form in duplicate to the commissioner of Income Tax or director of Income Tax, as the case may be having jurisdiction over the case;
  3. If any defect is noticed in form A or any document referred to therein is not attached with it, the commissioner of Income Tax or Director of Income Tax as the case may be , shall intimate the defect to the applicant
  4. The applicant shall remove the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf may be extended. However, the total period for removal defect shall not exceed thirty days
  5. If the applicant fails to remove the defect within the period so allowed, the commissioner of Income tax or the director of Income tax, as the case may be, shall send his recommendation to the member (Income tax ), Central Board of Direct Taxes for treating the application as invalid.
  6. The Central Board of Direct Taxes , if satisfied , may pass on order treating the application as invalid.
  7. If the application from is compete in all respects the commissioner of income tax or the Director of income tax , as the case may be may make such inquiry as he may consider necessary regarding the genuineness of the electoral trust and send a report to the member (Income Tax), Central Board of Income taxes for grant of approval or rejection of the application.
  8. The Central Board of Direct Taxes may, on receipt of the report referred to in sub-clause (g) , call for such documents or information from the applicant , any authority or other person as it may consider necessary and get any further inquiry conducted in this regard.
  9. The Central Board of Direct Taxes , shall after considering all the information in its possession and the result of inquiry conducted. If any , grant approval to the electoral trust or reject the application.
  10. The Central Board of Direct Taxes may also impose any conditions subject to which the approval shall be valid.
  11. No order treating the application as invalid or rejecting the application or withdrawing the approval shall be passed by the Central Board of Direct Taxes without giving the applicant an opportunity of being heard and without regarding the reasons for the same in writing.
  12. The order of approval or rejection shall be passed by the Central Board of Direct Taxes within six months form the end of the month in which of the application from was received from the applicant in the office of member (Income taxes) Central Board of Direct Taxes.
  13. The period of limitation of six months referred to in sub-clause (1) shall exclude the period beginning from the date of the limitation of the defect under clause (C) by the commissioner of income tax or the Director of Income tax , as the case may be, to the date the applicant remove such defect .
  14. A copy of the order invalidating or rejecting the application or withdrawing the approval shall be sent to the applicant, the assessing officer and the Commissioner of Income tax or the Director of Income tax as the case may be.
  15. The approval shall be valid of the assessment year relevant for the financial year in which such application has been made and for a further period, not exceeding three assessment years, as may be specified in such approval.

B. Documents required for FORM A

  1. An attested copy of the certificate evidencing the registration of the company for the purposes of section 25 of the Companies Act,1956 (1 of 1956)
  2. A certificate copy of memorandum and article of association
  3. Complete name , permanent account number and address of the electoral trust and its member ( including members of its executive committee Governing committee or Board of Directors)
  4. Initial share capital of the company and its source
  5. Details of beneficiaries if available
  6. An undertaking in form of an affidavit stating that the receipt shall be distributed only to the political parties registered under section 29A of the representation of the people Act 1951(43 of 1951) and
  7. Copy of accounts of the applicant for the last one , two or three years , as may be applicable

C. Any change in the shareholders subsequent to the approval granted under the scheme, shall be intimated to the Board within thirty days of the change