Registration U/s. 12A & 80G of Income Tax Act, 1961

12a registration

KEY AMENDMENTS IN SECTION 11 TO 12AB

Section 12AA – Procedure for Registration

  • With effect from the 01/04/2021 following sub-section shall be inserted after sub-section (4), namely:
  • “(5) Nothing contained in this section shall apply on or after the 01/04/2021”.

Section 12AB

After section 12AA of the Income-tax Act, the Section 12AB shall be inserted with effect from the 01/04/2021. That is Procedure for Fresh Registration.

Amendments  in  Section 12A

Condition for  Applicability of Section 11 & 12 – effective from 01/04/2021.

  • –  After clause (ab), a new clause (ac) has been inserted
  • – In subsection (2) certain Provisions have been substituted

Amendments in Section 11

  • SECTION 11(7)
    • Where a trust or an institution has been granted registration u/s 12AA(1)(b) or u/s 12AB or u/s 12A and the said registration is in force for any previous year, then, nothing contained in section 10 [other than Section 10(23C)(1) and 10(46) thereof] shall operate to exclude any income derived from the property held under trust from the total income of the person in receipt thereof for that previous year.
    • Provided that such registration shall become inoperative from the date on which the trust or institution is approved u/s 10(23C) or notified u/s 10(46) or the date on which this proviso has come into force, whichever is later:
    • Provided further that the trust or institution, whose registration has become inoperative under the 1st proviso, may apply to get its registration operative u/s 12AA or u/s 12AB, subject to the condition that on doing so, the approval u/s 10(23C)(1) or 10(46), shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it shall not be entitled to exemption under the respective clauses.”.

KEY AMENDMENTS IN SECTION 12A

  • In Sub-Section (1) after clause (ab) a new clause (ac) shall be inserted w.e.f. 01/04/2021, which states :-
    • Notwithstanding anything contained in clauses (a) to (ab),
    • the person in receipt of the income has made an application in the prescribed form and manner
    • to the Principal Commissioner or Commissioner, for registration of the trust or institution,

Section 12A(1)(AC)

 WHERE THE TRUST OR INSTITUTION ISTIME LIMIT FOR APPLICATION
(i)Already registered u/s 12A /12AAWithin 3 months from 01/04/2021
(ii)Registered u/s 12AB and the period of the said registration is due to expire.At least 6 months prior to expiry of the said period
(iii)Provisionally registered u/s 12ABAt least 6 months prior to expiry of provisional registration or within 6 months of commencement of its activities, whichever is earlier
(iv)Where registration of the trust or institution has become inoperative due to the first proviso to section 11(7)At least 6 months prior to the commencement of the AY from which the said registration is sought to be made operative
(v)Has adopted or modified its objects and which do not conform to the conditions of registrationWithin a period of 30 days from the date of the said adoption or modification
(vi)In any other case (1st Application made u/s 12ABat least 1 month prior to the commencement of the previous year relevant to the AY from which the said registration is sought.

Section 12A(2)

  • Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made
  • Following Proviso has been inserted in sub-section (2), with effect from the 01/04/2021,–
  • “Provided that the provisions of sections 11 and 12 shall apply to a trust or institution, where the application is made under—
    • Section 12A(1)(ac)(i), from the assessment year from which such trust or institution was earlier granted registration;
    • Section 12A(1)(ac)(iii), from the first of the assessment year  for  which it was provisionally registered: ( THIS HAS BEEN OMMITTED W.E.F 01/06/2020)
  • Provided further that where registration has been granted to the trust or institution under section 12AA or section 12AB, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment.

Section 12AB- Registration

  • Section 12AB (1) – The Principal Commissioner or Commissioner, on receipt of an application made under section 12A(1)(ac), shall :-
  • Section 12AB (1)(a) – where the application is made u/s 12A(1)(ac)(i),(Already registered trust/ institution) shall pass an order in writing registering the trust or institution for a period of 5 years;
  • Section 12AB (1)(c) – where the application is made u/s 12A(1)(ac)(vi),(In any other case) shall pass an order in writing provisionally registering the trust or institution for a period of 3 years from the AY from which the registration is sought.
  • Section 12AB (1)(b) – where the application is made u/s 12A(1)(ac)
    • Sub  Clause (ii)  – That  is registered u/s 12AB and the period of the said registration is due to expire.
    • Sub Clause (iii) – Provisionally registered u/s 12AB.
    • Sub Clause (iv) –Where registration of the trust or institution has become inoperative due to the first proviso to section 11(7)
    • Sub Clause (v) – Has adopted or modified its objects and which do not conform to the conditions of registration
  • Section 12AB (1)(b) – where the application is made sub clause (ii) or (iii) or or (v)
    • 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—
      • The genuineness of activities of the trust or institution; and
      • 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;
    • 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),––
      • Pass an order in writing registering the trust or institution for a period of 5 years; or
      • 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;

Period For Disposal Of Application

  • Section 12AB (3)–The order, shall be passed, in such form and manner as may be prescribed,
    • Before expiry of the period of 3 months – in case of trust/ institution already registered u/s 12A or 12AA.
    • Before expiry of the period of 1 months – In any other case (1st Application made u/s 12AB).
    • Before expiry of the period  of 6 months – in case of trust/ institution
      • Already registered u/s 12AB and the period of the said registration is due to expire.
      • Provisionally registered u/s 12AB and the period of the said registration is due to expire.
      • Where registration of the trust or institution has become inoperative due to the first proviso to section 11(7)
      • Has adopted or modified its objects and which do not conform to the conditions of registration

The said period shall be calculated from the end of the month in which the application was received.

Section 12AB – Pending Application

  • Section 12AB (2) –
    • All applications, pending before the Principal Commissioner or Commissioner on which no order has been passed u/s 12AA(1)(b) before the date on which this section has come into force (01/04/2021),
    • Shall be deemed to be an application made u/s 12A(1)(ac)(vi) on that date.

Cancellation Of Registration

  • Section 12AB (4) –
    • Where registration of a trust or an institution has been granted u/s 12AB(1)(a) or (b) and
    • Subsequently, the Pr.CIT or CIT is satisfied that :-
    • The activities of such trust or institution are not genuine or a
    • 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.
  • Note: That this sub- section is not applicable to a trust or an institution has which has been granted u/s 12AB(1)(c)
  • Section 12AB (5)
    • Without prejudice to the provisions of sub-section (4),
    • Where registration of a trust or an institution has been granted u/s 12AB(1)(a) or (b) , and
    • Subsequently, it is noticed that –
      • The activities 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 section 13(1); or
      • The trust or institution has not complied with the requirement of any other law, and the order, direction or decree, 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.

Note: That this sub- section is not applicable to a trust or an  institution has which has been granted u/s 12AB(1)(c )

Rule – 17A – Application For Registration

  • Rule 17 A(1) – An application u/s 12A(1)(ac) for registration of a charitable or religious trust or institution shall be made in :-
    • Form 10A – in case of application under sub-clause (i) (Already registered u/s 12A or U/s 12AA) or under sub-clause (vi) (In any other case (residual category)) of section 12A(1)(ac).
    • Form 10AB – in case of application under sub-clause (ii) or (iii) or (iv) or of section 12A(1)(ac).
  • Rule 17 (2) –The application under sub-rule (1) shall be accompanied by the following documents, as required by Form Nos.10A or 10AB, as the case may be, namely:—
    1. Where the applicant is created, or established, under an instrument, self- certified copy of such instrument creating or establishing the applicant;
    2. 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;
    3. 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;
    4. Self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010(42 of 2010), if the applicant is registered under such Act;
    5. Self-certified copy of existing order granting registration under section 12A or section 12AA or section 12AB, as the case may be;
    6. 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;
    7. 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;
    8. where a business undertaking is held by the applicant as per the section 11(4) 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;
    9. Where the income of the applicant includes profits and gains of business as per Section 11(4A) 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;
    10. Self-certified copy of the documents evidencing adoption or modification of the objects;
    11. Note on the activities of the applicant.
  • Rule 17 (3) – Form Nos. 10A or 10AB, as the case may be, shall be furnished electronically, —
    • Under digital signature, if the return of income is required to be furnished under digital signature;
    • Through electronic verification code in a case not covered under clause (i).
  • Rule 17 (4) – Form Nos. 10A or 10AB, as the case may be, shall be verified by the person who is authorised to verify the return of income under section 140, as applicable to the applicant.
  • Rule 17 (5) – On receipt of an application in Form No. 10A, the Principal Commissioner or Commissioner, shall pass an order in writing granting registration under clause (a), or clause (c), of section 12AB(1) read with sub- section (3) of the said section in FormNo.10AC and issue a sixteen digit alphanumeric Unique Registration Number (URN) to the applicants making application as per clause (i) of the sub-rule (1).
  • Rule 17 (6) – If, at any point of time, it is noticed that Form No. 10A has not been duly filled in by :-
    • Not providing, fully or partly, or
    • By providing false or incorrect information or
    • Documents required to be provided under sub-rules (1) or (2) or
    • By not complying with the requirements of sub-rules (3) or (4),
    • The Principal Commissioner or Commissioner, after giving an opportunity of being heard, may cancel the registration in Form No. 10AC and Unique Registration Number(URN), issued under sub-rule (5), and such registration or such Unique Registration Number (URN) shall be deemed to have never been granted or issued.
  • Rule 17 (7) – In case of an application made under (ac) of sub-section (1) of section 12A(1)(ac)(vi) [In any other case (residual category)] during previous year beginning on 1st day of April, 2021, the provisional registration shall be effective from the assessment year beginning on 1st day of April, 2022.
  • Rule 17 (8) –
    • In case of an application made in Form No. 10AB under clause (ii) of the sub-rule (1),
    • The order of registration or rejection or cancellation of registration under section 12AB(1)(b)(ii) shall be in Form No.10AD and
    • In case if the registration is granted, sixteen digit alphanumeric number Unique Registration Number (URN) shall be issued by the Principal Commissioner or Commissioner.
  • Rule 17 (9) – The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall:
    1. Lay down the form, data structure, standards and procedure of ,-
      • Furnishing and verification of Form Nos. 10A or 10AB ,as the case may be;
      • Passing the order under clause (a), sub-clause (ii) of clause (b) and clause (c) of sub-section (1) of section 12AB.
    2. Be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the said application made or order so passed as the case may be.

List Of Applicable Forms

FORM 10ARULE 2C/5A/17A/11AAApplication for registration or provisional registration or intimation or approval or provisional approvalin case of application under clause (i) (Already registered u/s 12A or U/s 12AA) or under sub-clause (vi) (In any other case (residual category)) of section 12A(1)(ac)
FORM 10ABRule 2C/ 11AA/ 17AApplication for registration or approvalin case of application under sub-clause (ii) or (iii) or (iv) or (v) of section 12A(1)(ac)
FORM 10ACRule 2C/ 11AA/ 17AOrder for registration or provisional registration or approval or provisional approvalOrder for registration/ approval /rejection/ cancellation passed in case of application in Form No. 10A
FORM 10ADRule 2C/ 11AA/ 17AOrder for registration or approval or rejection or cancellationOrder for registration/ approval /rejection/ cancellation passed in case of application in Form No. 10AB

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