Section 354 — Application for approval for purpose of section 133(1)(b)(ii)

(1) A registered non-profit organisation or a person referred to in Schedule
VII (Table: Sl. No. 1) may, for the purpose of section 133(1)(b)(ii), make an
application for approval in such form and manner, as may be prescribed, to the
Principal Commissioner or Commissioner, subject to the following conditions:—
( a) it is not expressed to be for the benefit of any particular religious
community or caste;
( b) it is established in India for a charitable purpose and does not incur any
expenditure of an amount exceeding 5% of its total income during a tax
year which is of a religious nature;
( c) the instrument under which it is constituted does not, or the rules
governing it do not, contain any provision for the transfer at any time
of the whole or any part of its assets for any purpose other than a
charitable purpose;
( d) it maintains regular accounts of its receipts and expenditure;
( e) it prepares such statement for such period, as may be prescribed, and
deliver or cause to be delivered to the prescribed income-tax authority
or the person authorised by such authority such statement in such form
and verified in such manner and setting forth such particulars and within
such time, as may be prescribed;
( f) it delivers to the said prescribed authority, a correction statement for
rectification of any mistake or to add, delete or update the information
furnished in the statement delivered under clause (e) in such form and
verified in such manner, as may be prescribed; and
( g) it furnishes a certificate to the donor specifying the amount of donation
within such period from the date of receipt of the donation containing
the requisite particulars in manner, as may be prescribed.
(2) The application under sub-section (1) shall be made in respect of the cases
referred to in column B of the Table below within the time limit provided in column
C of the said Table and the Principal Commissioner or Commissioner, on receipt of
such application, shall follow the procedure provided in sub-sections (3) and (4),
and shall pass an order in writing within the time limit provided in column D and
approval, if granted, shall be valid for a period provided in column E of the said Table:
TABLE
Sl.
No.
Case Time limit for
furnishing appli-
cation
Time limit for
passing the
order
Validity of
approval
A B C D E
1. Where the activities
of the applicant have
not commenced.
At any time during
the tax year from
which approval is
sought.
One month
from the end
of the month
in which appli-
cation is made.
Three tax years
commencing
from the tax
year in which
such applica -
tion is made.
2. Where the activi -
ties of the applicant
have commenced.
At any time during
the tax year from
which approval is
sought.
Six months
from the end
of the quarter
in which appli-
cation is made.
Five tax years
commencing
from the tax
year in which
such applica -
tion is made.
3. Where the applicant
has provisional ap -
proval and activities
have commenced.
Within six months
of the commence -
ment of activities.
Six months
from the end
of the quarter
in which appli-
cation is made.
Five tax years
commencing
from the tax
year in which
such applica -
tion is made.
4. Where the provi -
sional approval of
the applicant is due
to expire and activ-
ities have not com -
menced.
At least six months
prior to the expiry
of the provisional
approval.
Six months
from the end
of the quarter
in which appli-
cation is made.
Five tax years
following the
tax year in
which such
application is
made.
5. Where the period
for approval of a reg-
istered non-profit
organisation is due
to expire.
At least six months
prior to the expiry
of the said approv-
al.
Six months
from the end
of the quarter
in which appli-
cation is made.
Five tax years
following the
tax year in
which such
application is
made.
(3) Where an application has been made in any of the cases specified under
sub-section (2) (Table: Sl. Nos. 2 to 5), the Principal Commissioner or Commissioner
shall call for such documents or information or make such inquiries as he thinks
necessary in order to satisfy himself about the genuineness of the activities, and
compliance of such requirements of any other law in force, as are material for the
purposes of achieving its objects, and—
( a) if he is so satisfied about the objects and the genuineness of the activities
and compliance of such requirements of any other law in force, he shall
pass an order in writing approving it; or
( b) if he is not so satisfied, after affording a reasonable opportunity of
being heard,—
( i) shall pass an order in writing rejecting the application, where the
application was made in any of the cases specified in sub-section
(2) (Table: Sl. No. 2); and
( ii) in any other case, shall pass an order in writing rejecting the
application and also cancelling the approval,
and send a copy of the order to the applicant and the Assessing Officer.
(4) Where an application has been made in any of the cases specified in sub-section
(2) (Table: Sl. No. 1), the Principal Commissioner or Commissioner shall pass an
order granting provisional approval.
69[Merger of registered non-profit organisation in certain cases.
354A. Where any registered non-profit organisation merges with any other registered
non-profit organisation, the provisions of section 352 shall not apply if, —
( a) the other registered non-profit organisation has same or similar objects;
and
( b) the said merger fulfils such conditions as may be prescribed.]
7. —Interpretation