| BOMBAY PUBLIC TRUST
ACT 1950
1. INTRODUCTION
In the State of Maharashtra, the legislation governing Public Trust
is Bombay Public Trusts Act, 1950. Similar legislation by the same
name prevails in the State of Gujarat also. This is because; the
Act was passed when Maharashtra and Gujarat were one. Gujarat State
after its separation has made certain variations according to their
requirements. But more or less both the states have similar provisions.
Under the BPT Act, the Charity Commissioner is the guardian of the
trusts. The office of the Charity Commissioner has been given the
powers of supervision, regulation and control of public trusts.
It is compulsory for every public trust to register with the charity
commissioner so as to ensure proper administration and Management
2. DEFINITIONS
Sec. 2(13): Public Trust: means an express or constructive Trust
for either public or charitable purpose or both and includes a temple,
a math, a wakf, church, synagogue, agiary or any other religious
or charitable endowment and a society formed either for religious
or charitable purpose or both and registered under the Societies
Registration Act, 1860.
Sec. 9(1): Charitable Purpose: a charitable purpose includes
a. Relief of poverty or distress
b. Education
c. Medical relief
d. Provision for facilities for recreation or other leisure time
occupation (including assistance for such provision), if the facilities
are provided in the interest of social welfare and public benefit,
and
e. The advancement of any other object of general public utility,
but does not include a purpose which relates exclusively to religious
teaching or worship.
In order to be a public trust, it is not essential that the trust
should benefit the whole of mankind or all the persons living in
a particular state or city. It is said to be a public trust if it
benefits a sufficiently large section of the public as distinguished
from specified individuals. Also if the beneficiaries of the trust
are uncertain or fluctuating, then the fact that the beneficiaries
belong to a certain religion/caste does not make any difference.
3. REGISTRATION OF TRUST
i. Apply to Asst. /Deputy Charity Commissioner of the region in
Schedule II (prescribed form) Affix court fees stamp of Rs. 100.
ii. Application to be made within 3 months of creation of the trust.
iii. Documents to be submitted at the time of registration
a. Covering letter
b. Schedule II (the signatory to the application to affirm &
subscribe before appropriate authority)
c. Trust deed certified copy/memorandum of association and rules
& regulations (in case of society)
d. Affidavit in prescribed format.
e. Consent letter signed by the remaining trustees and stating that
they hereby allow the applicant trustee to represent on their behalf
and complete all registration formalities and obtain the certificate
of registration
f. Prescribed application fees based on value of the property.
Memorandum of particulars of immovable property to be filed within
3 months of creation of trust in Schedule IIA Application for registration
of a public trust created by will has to be made within 1 month
of granting of probate (i.e., copy of will certified under the seal
of the Court) or within 6 months of testator’s death, whichever
is earlier. In case of a society, it will have to be registered
under the Societies Registration Act as well as with the Charity
Commissioner. Unlike trusts, societies have a more democratic set
up. There is usually a scheme of election for members of the governing
council/managing committee. In case of trust, generally new trustees
are appointed by invitation of the sitting trustees.
4. REGISTER UNDER SEC. 17/SCHEDULE
I
The office of the Charity Commissioner maintains a register in schedule
I containing all details of the Trust viz. Regn No., details of
trustees, trust property etc. A copy of the same can be obtained
by filing an application along with the prescribed fees.
5. INTIMATION OF CHANGE: SECTIONS
22 & 22(1A)
Where any change occurs in any of the entries recorded in Schedule
I, the same has to be intimated to Charity Commissioner within 90
days of occurrence of change in Form "Schedule III’" along
with relevant documentary evidence. Intimation of change relating
to any immovable property has to be given in Form ‘Schedule IIIA’
(change report) Affix court fees stamp of Rs. 100.
6. IMMOVABLE PROPERTY (SEC. 36)
Investment in immovable property requires Charity Commissioner’s
permission. Prior permission of Charity Commissioner is required
for sale, exchange, gift of any immovable property, lease exceeding
a period of 3 years in case of non-agricultural land/building, lease
exceeding 10 years in case of agricultural land
7. BORROWING POWERS OF TRUSTEES (SEC.
36A)
No trustees shall borrow money for the purpose of or on behalf of
trust except with previous sanction of the Charity Commissioner.
8. CONTRIBUTION TO CHARITY COMMISSIONER
(SEC. 58) (SCH. IXC)
A public trust (other than one which is exempt) having gross annual
income (from all sources) exceeding Rs. 25,000 has to pay contribution
to the Public Trust Administration Fund @2%. Gross annual income
excludes corpus donations. Contribution is payable @2% on the gross
annual income after making the deductions prescribed in Rule 32
which are stated hereunder:
Deductions
a. Donations received from other public trusts and dharmadas
b. Grants received from government & local authorities
c. Interest on sinking and depreciation fund
d. Amount spent for secular education/ medical relief/veterinary
treatment of animals
e. Expenditure incurred from donations for relief of distress caused
by natural calamity
f. Deduction of land revenue, rent payable to landlord, cost of
production out of income from land used for agricultural purpose
g. Deductions of municipal taxes, ground rent, cesses, insurance
premia, repairs @10% of gross rent of let out buildings out of income
from land used for non agricultural purposes
h. Cost of collection of income or receipts from securities, stock
etc. @1% of such income
i. Deduction in respect of repairs of building (yielding no income)
@10% of estimated gross annual rent.
The following trusts are exempt from payment of contribution –
a. Public trusts having gross annual income of Rs. 25000 or less
b. Public trusts exclusively for advancement/propagation of secular
education/medical relief/veterinary treatment
c. Recognized public libraries and reading rooms.
d. Public trusts exclusively for the purpose of relief of distress
caused by natural calamity.
9. INVESTMENTS (SEC. 35)
A public trust can invest its funds in any of the following modes:
a. Scheduled bank as defined in RBI Act, 1934
b. Postal savings bank
c. Co-operative bank approved by State Government
d. Public securities being securities of Central/State government
(includes Units of UTI)
e. First mortgage of immovable property situated in India provided
the property is not leasehold for a term of 99 years and the value
of the property exceeds by one half of the mortgage money.
f. Any other investment permitted by Charity Commissioner, not exceeding
50% of total investment
10. BUDGET (SEC 31A & RULE 16A)
Trustee of every public religious trust having annual
income exceeding Rs. 5000 and Rs. 10000 in case of other trusts
has to prepare and submit the budget to the Charity Commissioner,
one month before the commencement of the accounting year. The budget
has to be prepared as per format given in Schedule VIIA.
11. ACCOUNTS AND AUDIT (SECs. 32
& 33, 34)
Regular accounts to be maintained. Balance sheet to be prepared
as per Schedule VIII and Income and Expenditure account as per Schedule
IX. If the trust/society operates in more than one city or geographical
region with separate branch or project offices, the accounts of
all such branches or project offices should be consolidated. However
it is permissible to file separate accounting returns if filed at
one time. Contribution u/s. 58 has to be made as per consolidated
income. In case of religious trusts, gold, silver and other valuable
articles should be valued after every 10 years and a footnote as
to such value should be given in the balance sheet. Accounts shall
be balanced on 31st March every year or on such other day as may
be fixed by the Charity Commissioner. Audit should be completed
within 6 months of the completion of the accounting year. The auditor
shall forward a copy of the Balance Sheet and Income & expenditure
account along with his Audit report to the Deputy or Assistant Charity
Commissioner within a fortnight of the audit. Trust having an annual
income of Rs. 15000 or less is exempt from audit. Trust exempted
from audit is required to file affidavit as to the extent of their
income and also has to file accounts in Schedule IX-A and IX-B within
3 months of the completion of the accounting year.
12. CHANGING THE OBJECTS OF THE TRUST
Sometimes, a trust created for certain specific objects fails due
to unforeseen circumstances. In such cases the doctrine of cy pres
comes into play. The meaning of the phrase ‘cy pres’ is as near
as possible. i.e. the trust can change its objects and the funds
can be used for a similar other purpose. For this an application
has to be made to the Charity Commissioner who inturn may further
require the trust to take sanction from the Court.
13. AMALGAMATION OF TRUSTS
To rescue financially weak trusts sec. 50A(2) of the BPT Act lays
down the provisions for legally amalgamating two or more trusts
with similar objects.
14. FOREIGN CONTRIBUTION (REGULATION)
ACT
All trusts receiving foreign contribution (i.e., any article, currency
whether Indian or foreign, foreign securities received from a foreign
source) have to register with the Central Govt. under FCRA. Moneys
received in Indian currency from companies in India that are foreign
controlled are also considered as foreign contributions. The Government
is to be intimated in Form FC-3 within 30 days of the receipt of
foreign contribution. Separate accounts have to be maintained of
the foreign contribution received & utilized. Every account
so maintained shall be audited by C.A. along with Balance sheet
and statement of receipts and payments. It has to be furnished to
the Secretary, GOI, Ministry of Home Affairs, New Delhi, within
60 days of closure of the year.
15. PENALTIES (SECTION 66)
Maximum fine of Rs. 1,000 is payable on failure to apply for registration
within time, failure to keep regular accounts, failure to pay contribution,
failure to invest money in public securities, failure to report
a change. Failure to send memoranda of immovable property within
time attracts penalty of Rs. 200. Failure to apply in time u/s 22B
or failure to send memoranda within time u/s. 22C attracts penalty
of Rs. 100. Failure without reasonable cause to comply with Sec.
41 AA (i.e., reserving hospital beds for poor patients) attracts
penalty of Rs. 2,000. W.e.f. 16-9-2005 (As per Maharashtra Ordinance
6 of 2005) value of court fees stamps to be affixed to various documents
submitted to Charity Commissioner have been revised.
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