Conditions for applicability of sections 11 and 12.
12A. [1] The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:—
[a] the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form6and in the prescribed manner to the Principal Commissioner or Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA :
Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,—
[i] from the date of the creation of the trust or the establishment of the institution if the Principal Commissioner or Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons;
[ii] from the 1st day of the financial year in which the application is made, if the Principal Commissioner or Commissioner is not so satisfied:
Provided further that the provisions of this clause shall not apply in relation to any application made on or after the 1st day of June, 2007;
[aa] the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of June, 2007 in the prescribed form7 and manner to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA;
Following clause [ab] shall be inserted after clause [aa] of sub-section [1] of section 12A by the Finance Act, 2017, w.e.f. 1-4-2018 :
[ab] the person in receipt of the income has made an application for registration of the trust or institution, in a case where a trust or an institution has been granted registration under section 12AA or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance [No. 2] Act, 1996 [33 of 1996]], and, subsequently, it has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, in the prescribed form and manner, within a period of thirty days from the date of said adoption or modification, to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA;
[b] where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section [2] of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form8 duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
Following clause [ba] shall be inserted after clause [b] of sub-section [1] of section 12A by the Finance Act, 2017, w.e.f. 1-4-2018 :
[ba] the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section [4A] of section 139, within the time allowed under that section.
[c] [***]
[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:
Provided that where registration has been granted to the trust or institution under section 12AA, 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 year:
Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year:
Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA.
6. See rule 17A and Form No. 10A for form of application for registration of charitable/religious trust, and the necessary accompanying documents, viz., 1. Original copy of instrument creating the trust/institution, i.e., trust deed, with one copy thereof, where trust/institution is created under an instrument. Certified copy in lieu of original copy of trust deed can also be accepted by the Commissioner. 2. Documents evidencing the creation of trust/institution, with one copy thereof, where trust/institution is created otherwise than under an instrument. 3. Where the trust/institution has been in existence during any year[s] prior to financial year in which application for registration is made, the application should be accompanied by two copies of accounts of trust/institution relating to prior year or years [not being more than 3 years immediately preceding the year in which application is made] for which such accounts have been made up.
7. See rule 17A and Form No. 10A.
8. See rule 17B and Form No. 10B for audit report in case of trust/institution. Under proviso to rule 12[2] audit report shall be furnished electronically.
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