Central Board of Direct Taxes, Department of Revenue, Ministry of finance has issued a clarification on 24th September 2010 in respect of the status of the IRCS branches set up under the IRCS Act of 1920.
It has been clarified that the Head Office and the branches are to be treated as distinct and separate entities for the purpose of the Income Tax Act 1961. Therefore if any branch desires to avail of exemption under section 11, it has to seek registration under section 12 AA separately, in case it is already not registered under that section.
It has also been clarified that the earlier direction for consolidation of accounts issued by the board vide their letter dated 21.07.1994 is no longer valid and has been superseded.
Earlier CBDT in its letter dated 19th May 2010 had mentioned that all branch committees of the IRCS may be treated as separate entities under the Income tax Act 1961 provided that they seek registration under section 12 A and 80G as separate bodies from their respective jurisdictional officers. However, that was interpreted differently by the assessing officer(s). The revised order has been issued after the National Headquarters took the matter with CBDT for correct interpretation of this letter. Please click here for more information