Section 12A states two conditions for availing the exemption available under the Act, the first condition is regarding application for registration and the second condition is regarding audit by an accountant as defined in the Explanation below sub-section (2) of section 288. All organisations are required to apply for registration within one year from the date of their creation. If there is delay in applying for registration then the organisation should submit Audit Reports for the past three years or as may be available.
As per the Taxation Laws Amendment Act, 2006, w.e.f. 1st April 2006, it is mandatory for every organisation to get its account audited where its income exceeds the minimum exemption limit. (As per the Finance Act 2008, presently the minimum exemption limit is Rs.1,50,000)
The implication of section 13(3) is extensive and therefore it may not be possible on the part of the Auditor to make independent inquiries. Therefore the Auditor before certifying the annexure to Form 10B should ensure and also clearly state the scope of his work and the responsibilities owned. It is important that the Auditor should mention in its report that the details of the persons covered under section 13(3) were provided by the Trustees of the Trust or the functionaries of the organisations.