Filing a 3-Year IT Return for an NGO: A Comprehensive Guide

Filing income tax returns is an essential legal requirement for all entities, including Non-Profit Organizations (NGOs). However, there are instances where NGOs may need to file for a 3-year IT return. This comprehensive guide explains the process, necessary steps, and the requirements for such filings.

Understanding the Current Regulations

According to the current provisions of the Indian Income Tax Act, it is possible to file returns for the financial years 2017-18 and 2018-19 online. However, for returns prior to that, special permission from the Central Board of Direct Taxes (CBDT) under Section 119 is required. This section allows for the condonation of delay in filing returns if there are genuine reasons for not filing them in the year they were due.

Criteria for Seeking CBDT Approval

Before an NGO can seek CBDT approval to file a 3-year IT return, it must meet certain criteria.

Business Continuity and Stability

NGOs must demonstrate that they have maintained continuous business operations and stability over the period for which the return is being filed. This is crucial as the board may question the viability of the organization during such a significant period.

Examination and Documentation

NGOs must provide detailed documentation and records that support the reasons for not filing the returns in the appropriate years. This documentation must be thorough and relevant, including any consultations, meetings, or correspondence related to the delay.

Process of Filing a 3-Year IT Return

Once the NGO has gathered all necessary documentation and met the criteria for seeking CBDT approval, the process of filing a 3-year IT return can be initiated. The steps involved in the process are as follows:

Step 1: Submitting the Application

The first step is to submit an application to the Income Tax Office. The application should include the following details:

The full name of the NGO and its registration number The reason for the delayed filing of returns A complete list of all returns due for the past 3 years Any supporting documents and certification proving business continuity and stability

Step 2: Review and Approval by CBDT

Once the application is submitted, it will be reviewed by the CBDT. The board will examine the documents and may request additional information if necessary. If the request for approval is granted, the NGO will receive a notice of approval.

Step 3: Preparing and Submitting the Return

After receiving the approval, the NGO can proceed to prepare and submit the 3-year IT return. This can be done online through the Electronic Tax Administration (ETAX) portal.

Step 4: Auditing and Compliance

Upon filing the return, the NGO must ensure compliance with all auditing and reporting requirements. Regular audits and validations will be conducted to ensure the accuracy and correctness of the filed returns.

Conclusion

In conclusion, while it may be challenging for NGOs to file a 3-year IT return, it is indeed possible under specific conditions. By following the outlined process, NGOs can successfully file their returns and maintain compliance with the Income Tax Act. It is crucial for NGOs to maintain accurate records and seek professional advice to navigate this process effectively.