Procedure for fresh registration - Section 12AB - Income Tax - Ready Reckoner - Income Tax

Procedure for fresh registration - Section 12AB The Principal Commissioner or Commissioner, on receipt of an application shall pass an order in writing registering the trust or institution for a period of 5 years (in case I of Requirement of obtaining registration Table ) ; The Principal Commissioner or Commissioner, on receipt of an application shall pass an order for provisionally registering the trust or institution for a period of 3 years (in case I of Requirement of obtaining registration Table ); The Principal Commissioner or Commissioner, on receipt of an application shall (in case of III, IV, V, VI of Requirement of obtaining registration Table ) , - (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 5 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; [ substituted by FA 2023 ] (B) if he is not so satisfied, pass an order in writing, (I) in a case referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (v) of section 12A(1)(ac) rejecting such application and also cancelling its registration; (II) in a case referred to in sub-clause (iv) or in item (B) of section 12A(1)(vi), rejecting such application, after affording a reasonable opportunity of being heard. Time Limit for passing order under section 12AB(1) [ Section 12AB(3) ] Upto 30.09.2024 - where the application is made under item (A) of sub-clause (vi) of the clause (ac) of the section 12A(1) or the application is made under sub-clause (vi) of the said clause, as it stood immediately before its amendment vide the Finance Act, 2023, 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. [ Section 12AB(3) substituted by FA 2023 ] From 01.10.2024 The order under section 12AB(1) shall be passed, in such form and manner as may be prescribed, within a period of, (i) three months calculated from the end of the month in which the application was received in case of clause (a); (ii) six months calculated from the end of the quarter in which the application was received in case of sub-clause (ii) of clause (b); and (iii) one month calculated from the end of the month in which the application was received in case of clause (c). [ substituted vide Finance (No. 2) Act, 2024 ] Situation in which registration/approval can be cancelled [ Section 12AB(4) ] Where registration or provisional registration granted u/s 12AB and subsequently : - The CIT/PCIT noticed occurrence of specified violation during any PY The CIT/PCIT has received a reference from the AO under 2 nd Proviso of section 143(3) for any PY; or Case has been selected as per risk management strategy of CBDT, for any PY; Then the CIT/PCIT shall (i) Call for such documents or information, or make such inquiry as he thinks necessary, (ii) If he is satisfied that specified violation took place then he will pass an order for cancelling the registration, after giving an opportunity of being heard, for such PY and all subsequent PYs. (iii) If he is not satisfied about the occurrence of specified violation then pass an order in writing, refusing to cancel the registration (iv) Order shall be passed within 6 months from end of quarter in which first notice is issued by CIT/PCIT, calling for any document or information, or for making any inquiry. (v) Forward a copy of the order to the AO and such trust. Time limit for passing the order [ Section 12AB(5) ] The order under clause (ii) or clause (iii) of section 12AB(4), as the case may be, shall be passed before the expiry of a period of six months, calculated from the end of the quarter in which the first notice is issued by the Principal Commissioner or Commissioner, on or after the 1st day of April, 2022, calling for any document or information, or for making any inquiry, under section 12AB(4)(i). Specified Violations means Where any income has been applied, other than for the objects of the trust; or Where trust has income from business which is not incidental to the attainment of its objectives or separate BOA are not maintained for the business which is incidental to the attainment of its objectives; or Where the trust has applied any part of its income for private religious purposes; or Where the trust has applied any part of its income for the benefit of any particular religious community or caste; or Any activity of trust is not genuine or not carried out in accordance with conditions subject to which it was registered; or The trust has not complied with the requirement of any law, and the order, holding that such non-compliance has occurred, has either not been disputed or has attained finality; or the application referred to in section 12A(1)(ac) is not complete or it contains false or incorrect information [ Inserted by FA 2023 ] .