Finance Act, 2020 made a paradigm shift in the process of registration of public charitable trust by inserting a new section 12AB. Though the same to be made applicable from 1st June, 2020, the pandemic delayed its applicability and the same was made applicable recently on 1st April, 2021. The notification making the same applicable was issued on 24th March, 2021 which read as Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
The said section prescribes the detailed guideline for registration and re-registration of the existing trust under the said section:
| Sr. No. | Category of the trust | Procedure for registration | Time Limit for passing order |
| 1 | Trust already registered u/s 12A or section 12AA | Trust shall be registered for for a period of 5 years. | before 3 months from the end of the month in which application is made |
| 2 | Trust registered under section 12AB and the said period id about to expire | When the application is received under sub-calluses (ii) to (v), then,
The PCIT or CIT has to call for documents and information as he may deem fit to verify the geniuses of the activities of the trust & compliance with any other law & pass an order registering the trust for a period of 5 years or rejecting such application if not so satisfied or canceling the registration. |
before 6 months from the end of the month in which application is made |
| 3 | Trust provisionally registered under section 12AB | ||
| 4 | Registration becomes inoperative due to interplay of first proviso i.e. when such trust of institution is approved under section 10(23C) or notified under clause 10(46). | ||
| 5 | On modification of the objects of the trust which do not conform to the conditions of the registration. | ||
| 6 | In any other case | Pass an order for registering the trust provisionally for the period of three years from the Assessment Year from which the registration is sought. | before 1 month from the end of the month in which application is made |
Further, rule 17A has also been amended which states as under:
When, the trust to be registered under section 12(AB):
| Conditions | Time limit for applying | Form |
| Is registered under section 12A or 12AA | Within 3 months from 1st April, 2021 i.e. by 30th June, 2020 | Form 10 A |
| In any other case than mentioned in the table | One month prior to the financial year for which the registration is sought | |
| Registered under section 12AB and the period of registration is due to expire | At least six months prior to the expiry of the said period | Form 10 AB |
| Provisionally registered under section 12AB | At least six months prior to the expiry of the provisional registration or within six months from the commencement of the activities of the trust | |
| Has become inoperative due to it getting approved under section 10(23C) and wants to get registered under section 12AB | 6 months prior to the commencement of the assessment year in which the registration is to be made operative | |
| Where objects of the trust have been modified to the effect that they do not conform to the conditions of the registration | Within a period of thirty days from the date of said adoption or modification |
The rules further state that the aforementioned application must be accompanied by the following documents:
(a) where the applicant is created, or established, under an instrument, self-certified copy of such instrument creating or establishing the applicant;
(b) where the applicant is created, or established, otherwise than under an instrument, self-certified copy of the document evidencing the creation or establishment of the applicant;
(c) self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be;
(d) self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010(42 of 2010), if the applicant is registered under such Act;
(e) self-certified copy of existing order granting registration under section 12A or section 12AA or section 12AB, as the case may be;
(f) self-certified copy of order of rejection of application for grant of registration under section 12A or section 12AA or section 12AB, as the case may be, if any;
(g) where the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the applicant relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up;
(h) where a business undertaking is held by the applicant as per the provisions of sub-section (4) of section 11 and the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of such business undertaking relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up and self-certified copy of the report of audit as per the provisions of section 44AB for such period;
(i) where the income of the applicant includes profits and gains of business as per the provisions of sub-section (4A) of section 11 and the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of such business relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up and self-certified copy of the report of audit as per the provisions of section 44AB for such period;
(j) self-certified copy of the documents evidencing adoption or modification of the objects;
(k) note on the activities of the applicant
The forms have to be submitted online through the efiling portal of the assessee trust and the same must be verified by the person who is authorised to verify return under section 140 of the Act.
However, section 140 clearly do not define who is the authorise person to verify return of the trust, it can be devised by norms that manging trustee, any trustee, managing officer or chief officer or any such authorised person will be are included under section 140 of the act.
What are the consequences after filing the application for registration?
| Consequences | Remarks | Form |
| Order granting registration | Issuing 16 digit Unique Identification Number | 10 AC for if application if filed in from 10 A & form 10 AD if application is filed in form 10 AB
|
| Rejecting the application | Opportunity of heard to be given and URN & Registration shall be deemed to be never granted or issued |
Author Bio
Dear Mr. Basu,
Is Form10A OK for newly created Trusts (which were not regd. u/s. 12A/12AA). Form 10A permits only two choices, viz., trusts already regd. u/s. 12A(1)(ac)(i). 12A(i)(ac)(vi) is not applicable for new Trusts. Sec.12A (1) does not speak of regin of new Trusts..What’s sol
I also want to become a CA