Under the existing provisions contained in sub-section (3) of the aforesaid section, where a trust or an institution has been granted registration and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, then he shall pass an order in writing, cancelling the registration of such trust or institution.
It is proposed to insert a new sub-section (4) in section 12AA so as to provide that where a trust or an institution has been granted registration and subsequently it is noticed that the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13, then the Commissioner or Principal Commissioner may by order in writing cancel the registration of such trust or institution. However, the registration shall not be cancelled under the said subsection, if the aforesaid trust or institution proves that there was a reasonable cause for the activities to be carried out in the said manner.
This amendment will take effect from 1st. October, 2014.