Do not panic over: a) Not opening your SBI account as yet b) Your 12AA & 80G renewal c) Filing Form CSR-1
Since the last few weeks, a fairly large number of charitable trusts and institutions seem to be in a high state of anxiety over three key issues: i) Their designated FCRA Bank account with SBI NDMB not opened before the given deadline of 31st March 2021, ii) Renewal of 12AA registration and 80G certificate and iii) Filing Form CSR-1 with MCA/ROC in order to be eligible for CSR grants. Let’s look at each of these issues calmly and carefully!
Designated FCRA Bank Account with SBI NDMB
All associations registered under or having prior permission under FCRA are required to open their Designated FCRA Bank Account with State Bank of India New Delhi Main Branch (SBI NDMB) and for which Ministry of Home Affairs (MHA) has set 31st March 2021 as the last date. However, quite a few organisations have not been able to open this Bank account. With MHA probably not in the mood to grant any extension, what are the consequences?
If your organisation has not been unable to open the SBI NDMB account or if your documents are still being processed, there is no major cause for worry. However, please note that on and after 1st April 2021 your organisation will not be able to receive foreign funds in your existing FCRA designated account and till such time as the account at SBI NDMB is opened.
In any case Banks will be closed on 1st April and 2nd April 2021.
Unfortunately, MHA has not been clear whether funds in the existing designated FCRA Bank account and existing FCRA Utilization Account/s can be utilized after 1st April. We would suggest caution and being safe rather than sorry.
a) Charitable trusts and institutions are required to open Designated FCRA Bank Account with SBI NDMB by 31st March 2021. MHA may or may not grant an extension. However, please do not panic if it is not opened by 31st March 2021. You association will not be de-registered under FCRA.
b) However, till such time as the Bank account with SBI NDMB is opened and other formalities completed, please do not receive any funds in your existing designated FCRA Bank account.
c) Out of abundant precaution we suggest that funds in your existing designated FCRA account and utilization account/s should not be used either.
d) Once the Bank Account with SBI NDMB is opened, immediately or within fifteen days, file online Form FC-6C and in this Form provide details of the New SBI NDMB account and if you wish to retain your existing FCRA account as Additional FCRA account for utilisation of foreign contributions, please add those details too in the same Form FC-6C.
e) Await MHA’s approval of your application made in Form FC-6C and only thereafter make the new and existing account operational.
If your organisation has already completed all these steps, we offer to you our hearty congratulations!
Revalidation of 12AA & 80G
Charitable trusts and institutions already registered u/s 12A or 12AA (for tax exemption) and 80G (tax deduction) must reapply in online Form No.10A within the time frame of three months starting 1st April and ending 30th June 2021. The renewed registration will be valid for a period of five years.
The application must be submitted electronically (online) and verified digitally along with the following documents (duly self-certified):
- Registration Certificate or Certificate of Incorporation (issued by charity commissioner, registrar of societies or registrar of companies)
- Trust deed or Memorandum and Articles of Association
- Registration Certificate under FCRA (if applicable)
- Registration order under 12A/12AA (issued earlier by Income tax)
- Audited statements of account for the last three financial years
- Note on the activities of the institution
- Registration under NGO Darpan
- Details of asset/liabilities as on the date of application (if applicable)
The form and procedure for re-validating 80G certificate is the same (Form No. 10A).
A common question people ask is whether registration under 12AA and 80G stands cancelled or suspended on 31st March 2021. The answer is NO!
The other question people ask is whether registration under 12AA and 80G will stand cancelled or suspended on and after 30th June 2021. The answer is NO, unless Income tax specifically rejects the application made in Form 10A.
Form CSR1 (Registration of Entities for undertaking CSR Activities)
Ministry of Corporate Affairs (MCA) on 22nd January 2021 Notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. With these Amendment Rules, significant changes have been made to the Companies (Corporate Social Responsibility Policy) Rules, 2014.
One such requirement is for every CSR Implementing Agency (whether registered as a Trust, Society or Section 8 Company) to register itself on the Ministry of Corporate Affairs / Registrar of Companies portal in online Form CSR-1.
This is mandatory for Financial Year 2021-22 and therefore there is no need to panic if your organisation has not been able to register as yet. For that matter, this form is not available as yet on MHA/ROC portal.
Form CSR1 seems fairly simple and easy.
The Entity for undertaking CSR Activities must:
- Tick Nature of the Entity (Trust, society, section 8 Company etc.)
- Whether the Entity is established by any company or group of companies
- Date of incorporation and address
- Details of Directors / Board of Trustees / Chairman / CEO / Secretary / Authorized Representatives of the entity with Name, Designation, DIN/PAN Email ID
- Copy of Certificate of Registration
- Copy of PAN of entity
The Certificate by Practicing Professional (Chartered Accountant or Company Secretary or Cost Account) requires the following declaration (by the practicing professional):
I declare that I have been duly engaged for the purpose of certification of this form. It is hereby certified that I have gone through the provisions of the Companies Act, 2013 and Rules there under for the subject matter of this form and matters incidental thereto and I have verified the above particulars (including attachment(s)) from the original/certified records maintained by the Company/ applicant which is subject matter of this form and found them to be true, correct and complete and no information material to this form has been suppressed. I further certify that:
- The said records have been properly prepared, signed by the required officers / authorized representatives of the entity and were found to be in order;
- All the required attachments have been completely and legibly attached to this form;
- It is understood that I shall be liable for action under Section 448 of the Companies Act, 2013 for wrong certification, if any found at any stage.
We trust, after reading all this our anxious NGOs will breathe easier and sleep better!
Noshir H. Dadrawala