(i) Section 12AA of the Act provides for the procedure to be followed for grant of registration to a trust or institution.
(ii) According to which, the person in receipt of the income should make an application in Form No. 1 OA for registration of the trust or institutions to the Commissioner before the expiry of a period of one year from the date of the creation of the trust or the establishment of institution, whichever is earlier.
(iii) However, where an application for registration is made after the expiry of the aforesaid period, the provisions of sections 11 and 12 will apply from 1st day of the financial year in which the application is made.
(iv) Along with Form no. 1 OA(in duplicate), ifie the original (or certified copy of) Trust Deed, together with one copy thereof, under which the trust is set up (original copy of the deed if filed shall be returned).
(v) Two copies of accounts (i.e. Balance Sheet, Income & Expenditure A/c., and Receipts & Payment A/c.) for the last three years, prior to the financial year in which application is made, are also to be filed along with application (if applicable). It should be noted here that only the copies of accounts of the trust since its inception or during the last three years, whichever is less, are required to be filed.
(vi) The Commissioner shall call for documents and information and hold enquiries regarding the genuineness of the Trust or Institution. After he is satisfied about the charitable or religious nature of the objects and genuineness of the activities of the trust or institution, he will pass an order granting registration and if he is not so satisfied, he will pass an order refusing registration, subject to the condition that an opportunity of being heard shall be provided to the applicant before an order of refusal to grant registration is passed by the Commissioner and the reasons for refusal of registration shall be mentioned in such order.
(vii) The application for registration of a trust or institution is to be made to the Commissioner. However, in case trust falls under the jurisdiction of an income tax authority having its head quarters at Mumbai, Chennai, Kolkata or Delhi, the application is to be made to the Director of Income Tax (Exemptions).
(viii) The order granting or refusing registration has to be passed within six months from the end of the month in which the application for registration is received by the Commissioner and a copy of such order shall be sent to all the applicants. The order is effective until withdrawn. It is also provided that the grant of registration shall be one of the conditions for grant of income-tax exemption u/s. 11 & l2ofthelncomeTaxAct, 1961.
(ix) The Commissioner is empowered to cancel registration at any time if he is satisfied that the activities of the trust are not genuine or not according to the objects of the trust, after giving a reasonable opportunity of being heard.
(x) One of the conditions as to registration of trusts as provided by section 1 2A is that the accounts of the trust or institution for that year should be audited by a chartered accountant where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year and such audit report is furnished along with the return of income for the relevant assessment year.