The Income-Tax Act, 1961

⁴[12. Income of trusts or institutions from contributions.-

⁵[(1)] Any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes (not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution) shall for the purposes of section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and section 13 shall apply accordingly.]

⁶[(2) The value of any services, being medical or educational services, made available by any charitable or religious trust running a hospital or medical institution or an educational institution, to any person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13, shall be deemed to be income of such trust or institution derived from property held under trust wholly for charitable or religious purposes during the previous year in which such services are so provided and shall be chargeable to income-tax notwithstanding the provisions of sub-section (1) of section 11.

Explanation.-For the purposes of this sub-section, the expression "value" shall be the value of any benefit or facility granted or provided free of cost or at concessional rate to any person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13.]

⁷[(3) Notwithstanding anything contained in section 11, any amount of donation received by the trust or institution in terms of clause (d) of sub-section (2) of section 80G ⁸[in respect of which accounts of income and expenditure have not been rendered to the authority prescribed under clause (v) of sub-section (5C) of that section, in the manner specified in that clause, or] which has been utilised for purposes other than providing relief to the victims of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of section 80G and not transferred to the Prime Minister's National Relief Fund on or before the 31st day of March, ⁹[2004] shall be deemed to be the income of the previous year and shall accordingly be charged to tax.]

4. Sections 12 and 12A restored by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989). Earlier section 12 was omitted by Act 4 of 1988, s. 7 (w.e.f. 1-4-1989).

5. Section 12 renumbered as sub-section (1) therof by Act 10 of 2000, s. 9 (w.e.f. 1-4-2001).

6. Ins. by s. 9, ibid. (w.e.f. 1-4-2001).

7. Ins. by Act 4 of 2001, s. 5 (w.e.f. 3-2-2001).

8. Ins. by Act 20 of 2002, s. 8 (w.e.f. 3-2-2001).

9. Subs. by Act 32 of 2003, s. 11, for the figures "2003" (w.e.f. 3-2-2001).

12A. ¹[Conditions for applicability of sections 11 and 12.]-

²[(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 form and in the prescribed manner to the 3*** ⁴[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, ⁵[whichever is later and such trust or institution is registered under section 12AA]:

⁶[Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of section 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 3*** ⁴[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 3*** ⁴[Principal Commissioner or Commissioner] is not so satisfied:]

⁷[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;]

⁷[(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 form and manner to the ⁴[Principal Commissioner or Commissioner] and such trust or institution is registered under section 12AA;]

⁸[(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 ⁹[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 form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.

¹[(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;]

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³[(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:]

⁴[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 nonregistration 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.]

1. Subs. by Act 22 of 2007, s. 8, for "Conditions as to registration of trusts, etc." (w.e.f. 1-6-2007).

2. Section 12A renumbered as sub-section (1) thereof by s. 8 ibid. (w.e.f. 1-6-2007).

3. The words "chief commissioner or" omitted by Act 27 of 1999, s. 8 (w.e.f. 1-6-1999).

4. Subs. by Act 25 of 2014, s. 4, for "Commissioner" (w.r.e.f. 1-6-2013).

5. Subs. by Act 33 of 1996, s. 5, for "whichever is later" (w.e.f. 1-4-1997).

6. The proviso substituted by Act 49 of 1991, s. 7, (w.e.f. 1-10-1991).

7. Ins. by Act 22 of 2007, s. 8 (w.e.f. 1-6-2007).

8. Ins. by Act 7 of 2017, s. 9 (w.e.f. 1-4-2018).

9. Subs by Act 29 of 2006, s. 4, for certain words and figures (w.e.f. 1-4-2006).

1. Ins. by Act 7 of 2017, s. 9 (w.e.f. 1-4-2018).

2. Clause (c) omitted by Act 20 of 2002, s. 9 (w.e.f. 1-4-2002).

3. Ins. by Act 22 of 2007, s. 8 (w.e.f. 1-6-2007).

4. Ins. by Act 25 of 2014, s. 8 (w.e.f. 1-10-2014).

⁵[12AA. Procedure for registration.-

(1) The 6*** ⁷[Principal Commissioner or Commissioner], on receipt of an application for registration of a trust or institution made under clause (a) ⁸[or clause (aa) ⁹[or clause (ab)] of sub-section (1)] 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, 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.

¹[(1A) All applications, pending before the ²[Principal Chief Commissioner or Chief Commissioner] on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the ³[Principal Commissioner or Commissioner] and the ³[Principal Commissioner or Commissioner] may proceed with such applications under that sub-section from the stage at which they were on that day.]

(2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) ⁴[or clause (aa) ⁵[or clause (ab)] of sub-section (1)] of section 12A.]

⁶[(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) ⁷[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 the ³[Principal Commissioner or 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, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.]

⁸[(4) Without prejudice to the provisions of sub-section (3), where a trust or an institution has been granted registration under clause (b) of sub-section (1) 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 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 Principal Commissioner or the Commissioner may by an order in writing cancel the registration of such trust or institution:

Provided that the registration shall not be cancelled under this sub-section, if the trust or institution proves that there was a reasonable cause for the activities to be carried out in the said manner.]

5. Ins. by Act 33 of 1996, s. 6 (w.e.f. 1-4-1997).

6. The words "chief commissioner or" omitted by Act 27 of 1999, s. 8 (w.e.f. 1-6-1999).

7. Subs. by Act 25 of 2014, s. 4, for "Commissioner" (w.e.f. 1-6-2013)

8. Ins. by Act 22 of 2007, s. 9 (w.e.f. 1-6-2007).

9. Ins. by Act 7 of 2017, s. 10 (w.e.f. 1-4-2018).

1. Ins. by Act 27 of 1999, s. 9 (w.e.f. 1-6-1999).

2. Subs. by Act 25 of 2014, s. 4, for "Chief Commissioner" (w.r.e.f. 1-6-2013)

3. Subs. by s. 4, ibid., for "Commissioner" (w.r.e.f. 1-6-2013)

4. Ins. by Act 22 of 2007, s. 9 (w.e.f. 1-6-2007).

5. Ins. by Act 7 of 2017, s. 10 (w.e.f. 1-4-2018).

6. Ins. by Act 23 of 2004, s. 6 (w.e.f. 1-10-2004).

7. Ins. by Act 14 of 2010, s. 7 (w.e.f. 1-6-2010).

8. Ins. by Act 25 of 2014, s. 9 (w.e.f. 1-10-2014).

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