Extension of Registration Procedure under Section 12AB

The new registration procedure prescribed under section 12AB for Charitable Trusts and Institutions introduced by the Finance Act, 2020 has been deferred and extended to 1^st April, 2021 by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. 

Renewal of registration u/s 12A or section 12AA, as well as renewal of approval under section 80G, is being deferred to 1^st April, 2021.

The new registration procedure prescribed under section 12AB was supposed to be made applicable from 01/06/2020 and was supposed to be completed by 31/08/2020,  which was firstly deferred and extended to 01/10/2020 and end by 31/12/2020 but considering the current pandemic situation, it has been extended to 01/04/2021 and hence now all existing trust have to re-register themselves under section 12AB from 01/04/2021 and before end of three months from the 1st day of April, 2021

(iv) in the twelfth proviso, for the word, figures and letters "section 12AA", the words, figures and letters "section 12AA or section 12AB" shall be substituted with effect from the 1st day of April, 2021;

 

(XII) in section 80G,—

Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,— (i) where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the 1st day of April, 2021;

The Act - "Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020" was notified on 29 September 2020 after receiving the President’s assent.

Section 12AB as inroduced by Finance Act, 2020 (further amended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020) is as follows :

Procedure for fresh registration.

12AB. (1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,—

(a) where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years;

(b) where the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of the said clause,—

 (i)  call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about—

(A) the genuineness of activities of the trust or institution; and

(B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects;

(ii) after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub-clause (i),—

(A) pass an order in writing registering the trust or institution for a period of five years; or

(B) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its registration after affording a reasonable opportunity of being heard;

(c) where the application is made under sub-clause (vi) of the said clause, pass an order in writing provisionally registering the trust or institution for a period of three years from the assessment year from which the registration is sought,

and send a copy of such order to the trust or institution.

(2) All applications, pending before the Principal Commissioner or Commissioner on which no order has been passed under clause (b) of sub-section (1) of section 12AA before the date on which this section has come into force, shall be deemed to be applications made under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A on that date.

(3) The order under clause (a), sub-clause (ii) of clause (b) and clause (c), of sub-section (1) shall be passed, in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received.

(4) Where registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, the Principal Commissioner or Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution after affording a reasonable opportunity of being heard.

(5) Without prejudice to the provisions of sub-section (4), where registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, it is noticed that—

(a) the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13; or

(b) the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (i) of clause (b) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality,

then, the Principal Commissioner or the Commissioner may, by an order in writing, after affording a reasonable opportunity of being heard, cancel the registration of such trust or institution.

Also Read : CBDT notifies New IT Rules and Forms for Trust and NGOs under section 12AB and section 10(23C) of the Income Tax Act, 1961

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