Applicability of Public Trust Registration for 12A Renewal by Societies

Income Tax Act
1

This is regarding a question on whether societies already registered under the Rajasthan Societies Registration Act, 1958 are also mandatorily required to be registered as public trusts under Section 17 of the Rajasthan Public Trust Act, 1959, for the purpose of renewal under Section 12A of the Income Tax Act, 1961, in light of the Hon’ble Supreme Court’s decision in New Noble Education Society (Civil Appeal No. 3795 of 2014, dated 19-10-2022).

We wish to bring to your kind attention the part of the scrutiny notice received in connection with an application under Section 12A, which states as follows:

“Whether the institution is registered under the Rajasthan Public Trust Act, 1959. If not, please give explanation that why the same should not be considered as violation of section 12AB(1)(b)(i)(B) of the Income Tax Act read with sec 17 of the Rajasthan Public Trust Act, 1959 and decision of Hon’ble Apex Court in the case of New Noble Education Society Civil Appeal No. 3795 of 2014 dated 19-10-2022 and why the application filed by you should not be rejected.”

In view of the above, we are seeking clarification on whether such dual registration is legally mandated, especially where the society is already registered under the Rajasthan Societies Registration Act, 1958, and engaged in charitable or educational activities.

We shall be grateful for guidance on this matter.

Warm regards

2

Thanks for your query.

Please note that states like Maharashtra, Gujarat etc which have separate state trust act with office of Charity Commissioner, a society besides the Societies Act of 1860 or the specific state act also needs to get registered under the state Trust Act and compliances are made to the Charity Commissioner.

Ths same is the case in Rajasthan. Please see below definition of Public Trust in Raj Public Trust Act below:

“Public trust” means an express or constructive trust for either a public, religious or chartable purpose or both and includes a temple, a math, dharmada or any other religious or charitable endowment or institution and a society formed either for a religious or charitable purpose or for both

Better to get registered under Raj Public Trust Act and seek time from Department for registration. Hope it clarifies.

CS Sharad Bhargava