Section 12AB was introduced by Finance Act, 2020 and was supposed to be applicable from 01.06.2020 which was later extended till 01.10.2020 due to the situation of pandemic and was again extended to 01.04.2021.
Section 12AB was introduced to again register all the trust and to maintain proper paper work for all trust and to organise them.
The major change which this new section is bringing is that this will remove the concept of perpetual existence of trust which they were enjoying till date and one could get registration of only 5 years under this new section.
Further, under this section a trust could even get provisional registration of 3 years which was not possible till now.
However to do all this no Form was announced but now CBDT has announced a form for registration u/s 12AB i.e. Form 10A.
Form 10A has been re-introduced under rule 17A which is for Application for registration of charitable or religious trusts etc. Earlier also Form 10A was used for registration of trust and now new Form 10A shall be used for registration of trust.
The above Form shall be used in two situations mentioned in section 12A(1)(ac) clause:
(i) where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (12 of 2020)], within three months from the 1st day of April, 2021;
(vi) in any other case, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought
Documents required along with the above Form:
The application in above form shall be accompanied by the following documents, as required by Form Nos.10A, namely:—
(i) where the applicant is created, or is established, under an instrument, self-certified copy of the instrument;
(ii) where the applicant is created, or is established, otherwise than under an instrument, self-certified copy of the document evidencing the creation, or establishment of the applicant;
(iii) 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;
(iv) self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010 (42 of 2010),, if the applicant is registered under such Act;
(v) self-certified copy of existing order granting registration under section 12A or section 12AA or section 12AB, as the case may be.
(vi) 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 trust or institution 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 (to be provided if answer to row 10 is “No”).
Thus, based on the above requirements more or less all the documents are similar to what was earlier required while filing Form 10A.
The major change above is requirement of earlier order of section 12A or 12AA if any available with the trust to re-register under section 12AB. As mentioned above this change has been brought to organise trust and make all their documents electronic.
However, trust who are in existence for decades now and taking benefit of section 12A or 12AA might not be having physical copy of their registration order and in that case they might face some issue while applying under Form 10A and CBDT has not provided any clarification regarding same.
Either CBDT should provide some relaxation to such trust as the order must have been issued on a paper in physical form and in so many year it might have deteriorated or such trust will have to apply for fresh registration and CBDT should provide registration to such trust without any hassle.
How to file the Form:
Form Nos. 10A or 10AB, as the case may be, shall be furnished electronically,
(i) under digital signature, if the return of income is required to be furnished under digital signature; or
(ii) through electronic verification code in a case not covered under clause (i).
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.
On receipt of application the Principal Commissioner or Commissioner, authorised by the Board shall pass an order in writing granting registration under clause (a), or clause (c), of sub-section (1) of section 12AB read with sub-section (3) of the said section in Form No.10AC and issue a sixteen digit alphanumeric Unique Registration Number (URN).
In case of an application made under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A 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.
Thus, above are the rules relating to registration of trust or public charitable institution under the new provisions of Income tax act.
The form is more or less similar to Form 10A used earlier.
To read the full notification CLICK HERE.
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