CBDT instructs internal audit of registration process of charitable trusts / institutions

CBDT has decided to subject the registration process of charitable trusts / institutions to internal audit and has issued detailed procedure in this regard.

In partial modification of its earlier Instruction No. 6 of 2017 dated 21.07.2017, CBDT has stated that the Hon’ble Public Accounts Committee( PAC ) has recommended that the process of the Registration Process of Charitable Trusts / Institutions should be brought under the purview of internal audit.

Accordingly, the Additional Director General (Audit & Inspection) in consultation with the Chief Commissioner of the Income Tax (Exemptions) has recommended a system in place for this purpose.

The following Procedure of Internal Audit of the Process of Registration of Charitable Trusts / Institutions of Commissioner of Income Tax (Exemptions) has been prescribed.

Procedure for internal audit of the “the processof registration of Charitable Trusts / Institutions of CsIT (Exemptions)”

1.The Internal Audit of “the process of registration of Charitable Trusts / Institutions of CsIT (Exemptions)” will be carried out each year by the O/o CsIT (Audit) of the region. The audit will commence for the first time in respect of the registration applications processed (i.e approved/rejected) during FY 2018-19.

2. The Internal Audit will be conducted by an officer of the rank of Joint / Addl. CIT as per the prescribed Registration u/s 12AA Check List 

3.  The Internal Audit shall be completed by 30th June  of the succeeding financial year.

4. After completion of the Internal Audit, the Audit report shall be submitted by the Joint/Addl. CIT to CIT (Audit) by 31st August.

5. The CIT (Audit) shall examine the objections and will submit the -final objections / observations to the respective CsIT (Exemptions) by 30th September and copy endorsed to CCIT (Exemptions).

6. The CCIT (Exemptions) shall examine all the Audit reports and seek comments from the respective CsIT (Exemptions).

7. The CCIT (Exemptions)’s decision regarding acceptance/ non-acceptance of the Audit Objection/ Observation shall be final.

8. The CCIT (Exemptions) shall submit his consolidated report to Pr. DGIT (L&R) by 31st December.

9. As this is the first year in which the Internal Audit of the process of registration of Charitable Trusts/Institutions is being started, a minimum of 50 cases of each CIT (Exemptions) shall be audited in FY 2019-20.Thereafter, ADG (Audit & Inspections) will circulate the target by 31st March, for the subsequent years, if there is any change in the target.

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