CA Sanat Pyne (F.C.A. & M.COM) (19982 Points)

09 September 2010  


A public charitable or religious institution can be formed either as a Trust or as a Society or as a Company registered u/s 25 of the Companies Act.

It generally takes the form of a trust when it is formed primarily by one or more persons.

To form a Society at least seven persons are required. Institutions engaged in promotion of art, culture, commerce etc. are often registered as non-profit companies.

These forms are enumerated as under :

1.      Charitable Trust settled by a settlor by a Trust Deed or under a Will.

2.      Charitable or religious institution / association can be formed as a society.

3.      Charitable institution can be formed by registering as a company u/s. 25 of the Companies Act, 1956, as non profit company (without addition to their name, the word “Limited” or “Private Limited”).

1.      Registration under Income-tax Act

1.      Charitable or religious trusts, societies and companies claiming exemption under sections 11 and 12 of the Income-tax Act are required to obtain registration under the Act. Private/family trusts are neither allowed such exemption nor required to seek registration under the Income-tax Act. The detailed procedure is as under :

2.      Registration of Trust under Income-tax Act procedure for registration u/s. 12AA of I.T. Act.

1.      Application for registration in Form No.10A in duplicate.

2.      List of Name and Address of the Trustees

3.      Copy of Registration Certificate with Charity Commissioner or copy of application to him.

4.      Certified True Copy of the Trust Deed.

5.      PAN No. or Copy of application of the Trust.

6.      PAN of the trustees.

3.      Procedure for registration (Sec 12AA)
The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) of section 12A, shall –

a.       call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and

b.      after satisfying himself about the objects of the trust or institution and the genuineness of its activities he –

                                                                                i.            shall pass an order in writing registering the trust or institution;

                                                                              ii.            shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution,

                                                                            iii.            and a copy of such order shall be sent to the applicant. Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard.