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Government of
Revenue Division
Central Board of Revenue
Notification
(Income Tax)
S. R. O. 541(I)/2003.
- In exercise of the powers conferred by sub-section (1) of section 237 of the
Income Tax Ordinance, 2001 (XLIX of 2001), the Central Board of Revenue is
pleased to direct that the following further amendments shall be made in the
Income Tax Rules, 2002, the same having been previously published as required
by sub-section (3) of the said section, namely: -
In the Income Tax Rules, 2002, for
Chapter XVII, the following shall be substituted, namely: -
“CHAPTER XVII
NON-PROFIT ORGANISATIONS
211. Procedure
for the approval of a non-profit organization. – (1) An institution, fund, trust, society or any other
non-profit organization (hereinafter referred to in this Chapter as organisation) established in Pakistan for religious,
educational, charitable, welfare or development purposes or for the promotion
of an amateur sport requiring approval of the Commissioner under clause (36) of
section 2 of the Ordinance, shall make an application to the Commissioner in
the following form, namely: -
APPLICATION FOR APPROVAL FOR THE PURPOSES OF
CLAUSE (36) OF SECTION 2 OF THE INCOME TAX ORDINANCE, 2001
To,
The Commissioner of Income Tax,
__________Zone,
_________(City).
1. With
reference to clause (36) of section 2 of the Income Tax Ordinance, 2001 (XLIX
of 2001), I the undersigned, hereby apply, on behalf of __________ (name of the
organization) for its approval for the purposes of the said clause for the tax
year ending on ________.
2. Necessary
particulars are set out below, and in the schedule to this application.
3. The following documents required under
sub-rule (2) of rule 211 of the Income Tax Rules, 2002, are enclosed.
(i)
______________________
(ii)
______________________
(iii)
______________________
(iv)
______________________
(v)
______________________
Signature______________
Name
(in block letters) __________
Application
must be signed either by the President or the Secretary of the organization or
by a Trustee, of the trust.
SCHEDULE
1.
Name of the
organization (in block letters) ___________________________.
2.
Full address of
the organization (in block letters) ______________________.
3.
Date of
registration of the organization _______________________.
4.
Its aims and
objects.
(a)
____________________________________________________
(b)
____________________________________________________
(c)
____________________________________________________
(d)
____________________________________________________
5. Whether the organisation has been registered under the
Societies Registration Act, 1860 (XXI of 1860), or the Voluntary Social Welfare
Agencies (Registration and Control) Ordinance, 1961 (XLVI of 1961), or any
other law in substitution thereof relating to the registration of welfare
organisation or established in pursuance of a Trust Deed. Please give/state the law and the number and
date of registration ______________________.
6. Whether
constitution, memorandum and
articles of association, trust deed, rules and regulations or bye-laws, as the case may be, conform(s) to the provisions of
sub-rule (1) of rule 213. If so, please give the number of Article/ Clause/
Rule etc., for each provision.
7. Whether the organization ensures for
the benefit of the general public or a particular community or class of persons
only (give full details).
8. The number of members /trustees of the
organization on the date of application.
9. Accounting year of the organisation
commences on ___________and ends on ___________.
10. The following books of accounts are
being regularly maintained by the organization and are open for inspection
without any hindrance to the general public.
i)
_______________________________
ii)
_______________________________
iii)
_______________________________
Signature______________
Name
(in block letters) __________
Designation____________
(2) An
application under sub-rule (1) shall be accompanied by -
(a) a
duly attested copy of the constitution, memorandum and articles of association,
rules and regulations or bye-laws, as the case may be, of the organisation
specifying the aims and objects for which it is established;
(b) a
certified copy of the registered trust deed, in case of a Trust;
(c) a
certified copy of certificate of registration in the case of an organisation
registered under the Societies Registration Act, 1860 (XXI of 1860), the
Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961
(XLVI of 1961), or under any other law in substitution thereof relating to the
registration of welfare organisation as applicable;
(d) duly
attested copies of the balance sheet and of revenue accounts of the
organisation as audited by a “qualified accountant” for the year immediately
preceding the year in which the application is made;
(e) the
names and addresses of the promoters, directors, trustees, president,
secretary, treasurer, manager and other office bearers, as the case may be, of
the organisation, and indicating clearly their family relationships, if any,
with each other;
(f) for
the purposes of clause (d), “qualified accountant” means, -
(i) a retired audit, accounts, treasury or
taxation officer of the Government not below BPS-17 or a bank manager, where
the annual receipts of the organisation do not exceed Rs.
0.5 million;
(ii) a
Cost and Management Accountant for those where the annual receipts of the
organisation exceed Rs.0.5 million but do not exceed Rs.
3.0 million; and
(iii) in
other cases, a Chartered Accountant.
Provided that an organization may also choose to
engage auditors prescribed for organization with higher receipts; and
(g) a detailed
report with regard to the performance of the organisation for achieving its
aims and objects during the three financial years preceding the date on which
application is made, duly evaluated and certified by an independent
certification agency approved by an authority designated by the Government of
Pakistan for this purpose or, till that authority is established, under
arrangements made by the Central Board of Revenue.
212. Decision
on application. - (1) On receipt of
an application under rule 211, the Commissioner may make such inquiries or call
for such further information as the Commissioner may deem necessary and after
completion of formalities may approve the organization for the purpose of
clause (36) of section 2 of the Ordinance.
(2)
An approval granted under sub-rule (1)
shall be –
(a)
notified in the
official Gazette;
(b)
subject to such
conditions as the Commissioner may specify in the approval; and
(c)
valid until the 30th
day of June of the tax year next following the tax year in which the approval
is granted.
213. Refusal to grant approval. - (1) The approval shall not be granted
if the constitution,
memorandum and articles of association, trust deed, rules and regulations or
bye-laws, as the case may be, specifying
the aims and objects of the organization do(es) not
provide -
(a) for
the audit of the annual accounts of the organisation every year by a qualified
accountant as specified in clause (f) of sub-rule (2) of rule 211;
(b) where
the organisation is registered under the Societies Registration Act, 1860 (XXI
of 1860), the Voluntary Social Welfare (Registration Control) Ordinance, 1961
(XLVI of 1961), or any other law in substitution thereof relating to the
registration of welfare organisation, for the quorum of a meeting of the
members of the body in which the control of the affairs of the organisation
vests, being not less than four or one-third of the total number of the members
of such body, whichever is greater;
(c) where
the organisation is a Trust as defined in the Trust Act, 1882 (II of 1882), for
the quorum of a meeting of the members of the body in which the control of the
affairs of the trust vests, being not less than three or one-third of the total
number of the members of such a body, whichever is greater;
(d) for
the transfer of its assets, in the event of its dissolution, after meeting all
liabilities, if any, to another organisation which is an approved non-profit
organisation, within three months of the dissolution under intimation to the
Commissioner;
(e) for
the utilisation of its money, property or income or any part thereof solely for
promoting its objects;
(f) for
prohibiting any portion of its money, property or income being paid or
transferred directly by way of dividend, bonus or profit to any of its members
or the relative or relatives of a member or members;
(g) for
the maintenance of accounts of the organisation being kept in a scheduled bank
or in a post office or national savings organisation, National Bank of
(h) for
prohibiting the making of any changes in the constitution, memorandum and
articles of association, trust deed, rules and regulations or bye-laws, as the
case may be, without the prior approval of the Commissioner:
Provided this clause will have effect only in cases
where the approval is granted; and
(i)
for restricting the
moneys validly set apart or not utilised upto
twenty-five per cent of the income including surplus worked out of the amount
from donations made to it. In case, accounting period closes within three
months of the commencement of activities, the Commissioner can relax this
condition upto fifty per cent of the amount:
Provided that a certificate to the effect that the
amounts so in excess of the said limit have been invested in Government
securities or in the scheduled banks including NIT Units or any mutual funds
registered with State Bank of Pakistan or Securities Exchange Commission of
Pakistan is produced:
Provided further that such deposit or investment in or
through the scheduled banks shall not exceed one-third of the surplus at the
end of the year.
(2) The Commissioner may refuse to approve the organisation
if the Commissioner is satisfied that the organisation -
(a) has
been or is being used for personal gain of any particular person or a group of
persons;
(b) has
been propagating the view of a particular political party or a religious sect;
(c) has
been or is being managed in a manner calculated to personally benefit its
members or their families; or
(d) has
not been or will not be able to achieve its declared aims and objects in view
of its set up, administration or otherwise as evaluated and certified by an
independent certification agency.
(3)
The
Commissioner shall notify the applicant, in writing, the decision to refuse the
approval.
(4) The
notice referred to in sub-rule (3) shall include a statement of reasons for the
refusal.
214.
Renewal of approval. - (1) An
organisation that has been approved as a non-profit organisation may apply for
renewal of approval to the Commissioner concerned through an application in the
following form, namely: -
APPLICATION FOR RENEWAL OF
APPROVAL FOR THE PURPOSES OF
CLAUSE (36) OF SECTION 2 OF
THE INCOME TAX ORDINANCE, 2001.
To,
The
Commissioner of Income Tax,
_________ Zone,
________(City).
I,
the undersigned, hereby apply for the renewal of approval of ___________ (name
of the Organization) for the tax year ending on ___________.
2. The
____________________ (name of the Organization) was approved as a Non-Profit
Organization by the Commissioner vide Notification No ________________
dated _____________.
3.
It is hereby certified that:-
(a)
constitution, memorandum and articles of association,
trust deed, rules and regulations or bye-laws, as the case may be, previously filed with the Commissioner, have
remained unchanged;
(b)
the
disqualification mentioned in sub-rule (1) of rule 213 do not apply to the
organization;
(c)
the organization
has fully complied with the provisions of Rule 213; and
(d)
the information
given above and in the attached Schedule is correct.
Signature______________
Name
(in block letters) __________
Designation____________
SCHEDULE
Particulars
1.
Name of the
organization (in block letters) _____________________________
2.
Full address of
the organization (in block letters) _________________________
3.
Date of
registration of the organization _________________________
4.
Its aims and
objects
(a)
____________________________________________________
(b)
____________________________________________________
(c)
____________________________________________________
(d)
____________________________________________________
5.
Date of approval
granted under clause (36) of section 2 the Income Tax Ordinance, 2001.
6.
Whether the constitution,
memorandum and articles of association, trust deed, rules and regulations or
bye-laws, as the case may be, conform(s)
to the provisions of sub-rule (1) of rule 213. If so, please give the number.
7.
Whether the
organization ensures for the benefit of the general public or a particular
community or class of persons only (give full details).
8.
The number of
members/ trustees of the organization on the date of application.
9.
Accounting year
of the organization commences on __________ and ends on ___________.
10.
The following books of accounts are being regularly
maintained by the institution and are open for inspection without any hindrance
to the general public.
(i)
________________________
(ii)
________________________
(iii)
________________________
Signature
_____________
Name (in block letters) _________
Designation
_____________
Application must be singed either by
the President or the Secretary of the organisation or by a Trustee of the
Trust.
(2) An
application for renewal of approval under sub-rule (1) shall be furnished
within six months after the expiry of the validity of the approval last granted
and such application shall be accompanied by such documents and instruments as
are specified in sub-rule (2) of rule 211.
(3) The
Commissioner may renew the approval where the Commissioner is satisfied that
the organisation –
(a) complied
with the provisions of clause (h) of sub-rule (1) of rule 213;
(b) did
not suffer any one or more of the disqualification(s) specified in sub-rule (2)
of rule 213;
(c) complied
with the provisions of rule 216; and
(e)
otherwise satisfied
the requirements for renewal of approval in the preceding three years.
(4) The
Commissioner shall refuse an application for renewal of an approval for any
year if the organisation did not enjoy approval for the tax year immediately
preceding the year in which the renewal application is made under this rule.
(5) The
first renewal of approval shall be valid up to the 30th day of June
of the second tax year following the tax year in which renewal of the approval
is granted, provided that subsequent renewals will be for a period extending upto three years depending on an independent certification
agency’s report and audit results.
(6) The
renewal of approval of an organisation shall be –
(a) notified
in the official Gazette; and
(b) subject
to such conditions as the Commissioner may specify in the renewal of approval.
(7)
The
Commissioner shall notify the applicant, in writing, the decision to refuse an
application to renew the approval.
(8) The
notification referred to in sub-rule (7) shall include a statement of reasons
for the refusal.
215. Finalisation of applications. -
The Commissioner shall finalise applications under
rules 211 and 214 within two months of their receipt.
216. Annual accounts. -
An organisation that has been approved under rule 212
or whose approval has been renewed under rule 214 shall, by the 31st
day of July each year, submit to the Commissioner and to the concerned
certification agency, in respect of the preceding tax year: -
(a) a
copy of the statement of audited accounts, as mentioned in clause (d) of
sub-rule (2) of rule 211;
(b) a
statement of income and donations received and moneys paid;
(c) a
list of donees and beneficiaries with full addresses;
and
(d) a
statement showing the money set apart or kept un-utilised with reasons thereof.
217. Power to withdraw approval. - (1) The
Commissioner may, at any time, withdraw an approval granted earlier, if the
organisation fails to comply with the provisions of rule 216 or 219 and is
satisfied that -
(a) the
said organisation has failed to fully utilise its income and the donations
received by it for achieving the purpose for which it was established; and
(b) the
reason for setting apart, or for not utilising, the money referred to in clause
(d) of rule 216 is not valid.
The Commissioner shall also supply a copy of the order
withdrawing the approval to the concerned certification agency.
(2) No approval shall be withdrawn under
sub-rule (1) unless the organisation has had an opportunity to show cause
against the action proposed to be taken.
(3) Where the Commissioner decides to
withdraw an approval under sub-rule (1), the
Commissioner
shall intimate the organisation and certification agency, in writing, of the
decision including a statement of reasons for the decision.
218. Appeal against a decision of Commissioner.
-
An organisation dissatisfied with –
(a) a
decision to refuse an application made under rule 211 or 214; or
(b) a
decision to withdraw an approval under rule 217,
may lodge an appeal in the following form with the
Regional Commissioner of Income Tax concerned, namely: -
GROUNDS OF APPEAL
(i)
_________________________________________________
(ii)
_________________________________________________
(iii)
_________________________________________________
(iv)
_________________________________________________
(v)
_________________________________________________
We/I_________ the appellant(s) named
in the above appeal do declare that what is stated therein is true to the best
of our/my information and belief.
Dated………20____
Signature______________
Name
________________ Address
_______________