Renewal of Registration of Existing NPOs (including Trusts) | Tax Updates

Finance Act, 2020 has completely revamped the registration procedure of charitable trusts/fund/institutions registered under Section 10(23C)/ 12A/12AA/35/80G. The concept of renewal of registration is introduced in order to curb malpractices in abusing the exemptions granted to the said entities.

The new registration procedure prescribed under section 12AB was supposed to be rolled out from 01.06.2020 and end by 31.08.2020, which was deferred and extended to 01.10.2020 and end by 31.12.2020. However, the same was further extended to April 1, 2021, by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Hence, the time limit to apply for such renewal is 01.04.2021 to 30.06.2021.

Now, the Government has issued guidelines to give effect to Section 12AB. We give hereunder the procedure and checklist of documents required for renewal of registration u/s 12A/80G of the Act.

• The application has to be furnished electronically by the applicant in Form 10A/10AB, whichever is applicable, together with the documents prescribed.
• Note: If Return of Income is required to be furnished with a Digital signature (DSC), then the form will have to be signed by using DSC. For others, using Electronic Verification Code.
• The application in Form 10A/10AB shall be accompanied by the following documents:
• Self-certified copy of Trust Deed/Memorandum and Articles of Association, as the case may be.
• Self-certified copy of registration certificate i.e. certificate of Registrar of Firms and Societies/Registrar of Public Trusts/Registrar of Companies, as the case may be.
• Self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010, if applicable.
• Self-certified copy of existing order/notification granting registration under Section 10(23C)/12A/ 12AA/12AB/35/80G, as the case may be.
• Self-certified copy of the order of rejection of application for grant of registration under Section 10(23C)/12A/ 12AA/12AB/80G, as the case may be.
• Self-certified copies of the annual accounts of the applicant for a period of three immediately preceding financial years.
• Where the applicant is engaged in business/income of the applicant includes income under the head income from a business, then self certified copies of the annual accounts of such business together with tax audit report for a period of three immediately preceding financial years. tax audit report for a period of three immediately preceding financial years.
• Self-certified copy of documents evidencing adoption or modification of the objects, if any.
• A detailed note on the activities of the applicant.
• Upon receipt of the application, the Principal CIT or CIT shall pass an Order in Form 10AC/10AD within 3 months/6 months/1 months, as the case may be, from the end of the month in which application is received :
• registering the trust/fund/institution for a period of 5 years/3 years, as the case may be or,
• rejecting the application and issue a 16 digit alphanumeric Unique Registration Number (URN) to the applicant.
• In the event of failure to provide the full and correct information in Form 10A/10AB and documents prescribed, the Principal CIT or CIT may cancel the order granting registration in Form 10AC/10AD and URN issued to the applicant.

Category of applicants who are required to furnish application in Form 10A:

·        Trusts / institutions registered under Section 12A or 12AA.

·        Trusts/fund/institutions established for a charitable purpose or wholly for public religious purpose or wholly for public religious purpose and charitable purpose.

·        University or other educational institution existing solely for educational purposes.

·        Hospital or other institution existing solely for a philanthropic purposes.

· Trusts/institutions registered under Section 80G which maintains regular accounts of its receipts and expenditure.

Category of applicants who are required to furnish application in Form 10AB:

·        Trusts/ institutions registered under Section 12AB and the period of registration is due to expire.

·        Trusts/ institutions provisionally registered u/s 12AB.

·        Registration of trusts/ institutions has become inoperative due to the first proviso to Section 11(7).

·        Trusts/ institutions have adopted or undertaken modifications of the objects which do not conform to the conditions of registration.

·        Fund/trust/ institution/ university/ educational institution/ hospital/ medical institution is approved and the period of approval is due to expire or has been provisionally approved.

We will be glad to provide any information, elaboration, and elucidation that you may need in this regard.

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