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40. Procedure and conditions for approval of retirement annuity contracts for professionals under section 44A.- (1) An application for approval of an annuity contract under section 44A setting out full particulars of the said contract shall be made to the Board within the time-limit specified in sub-rule (1) of rule 39 and shall be accompanied by the documents specified in sub-rule (2) of the said rule.

(2) The conditions laid down in sub-rule (4) of rule 39 shall, in so far as these are applicable, apply to contracts in respect of which an application for approval is made under this rule.

(3) The Board after making such enquiries or calling for such further information as may be deemed necessary shall, if it is satisfied that the contract should be declared as approved, issue a declaration to that effect and shall notify the fact to the applicant and the concerned Commissioner.

(4) The approval shall be effective from the date of the contract.

(5) The provisions of an annuity contract approved by the Board for the purposes of section 44A shall not subsequently be varied except with the prior approval of the Board.

(6) The Board may, at any time, by notice in writing and after giving a reasonable opportunity of being heard to the persons by and to whom premia are payable under an annuity contract for the time being approved under section 44A withdraw that approval on such grounds and from such date as may be specified, in the notice.

(7) Where a deduction under section 44A is claimed and allowed for any assessment year in respect of any payment, relief shall not be given in respect of it under any other provision of the Ordinance for the same or a later assessment year.

41. Procedure for approval of charitable or religious institution or funds.-
(1) Submission of application.- (a) An institution, a fund , a trust or a society established in Pakistan for religious or a charitable purpose requiring the approval of the Board under clause (d) of sub-section (1) of section 47 or of the Federal Government under sub-section (4) of section 47 shall make an application to the Board or to the Federal Government, as the case may be in Form 1, annexed hereto.

(b) The application shall be accompanied by-
(i) a copy of the constitution, memorandum and articles of association, rules, regulations or bye-laws, as the case may be specifying the aims and objects for which the institution is established, attested according to the law and procedure regarding attestation of documents (i.e. duly attested);

(ii) the original Registered Trust Deed with duly attested copy thereof, in case of a Trust;

(iii) the registration certificate in original, together with a duly attested copy thereof, in the case of a society or agency where registration of the institution has been made 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 as applicable;

(iv) duly attested copies of the balance-sheet and of revenue accounts, as audited by a chartered accountant for the year immediately preceding the year in which the application is made;

(v) a list of names with addresses of the President, Secretary, Treasurer, Manager and other office bearers or Trustees, as the case may be, of the institution also indicating clearly their family relationships, if any, with each other; and

(vi) a detailed report with regard to the performance of the institution for achieving its aims and objects for the period prior to such an application, duly endorsed by the Deputy Commissioner of Income Tax of the area within whose jurisdiction its headquarters is located.

(2) Grant of Approval.- (a) On receipt of an application under clause (d) of sub-section (1) of section 47 under sub-rule (1), the Board may make such inquiries or call for such further information as it may deem necessary and after completion of formalities may grant approval to the institution. Where an application is made under sub-section (4) of section 47 under sub-rule (1), the Federal Government may through the Board, make such inquiries or call for such further information as it may deem necessary and after completion of formalities may grant approval to the institution;

(b) The approval shall be notified in the Official Gazette;

(c) The institution and the Commissioner of the area within whose jurisdiction the headquarters of the institution is located shall be informed about the approval in writing;

(d) The approval shall be valid up to the 31st December, of the second calendar year following the calendar year in which such approval is granted.

(3) Bar to grant of approval.- Approval shall not be granted if the constitution, memorandum or articles of association, rules, regulations or bye-laws, or trust deed, as the case may be, specifying the aim and objects of the institution do not provide-

(a) for the audit of the accounts of the institution every year by a chartered accountant; an institution may close accounts at the end of the fiscal year or at the end of the calendar year;

(b) for the quorum of a meeting of the members of the body (where the institution is registered under the Societies Registration Act, 1860 (XXI of 1860), the Voluntary Social Welfare (Registration Control) Ordinance, 1961 (XLVI of 1961), in which the control of the affairs of the institution vests, being not less than four or one-third of the total number of the members of such body, whichever is greater;

(c) for the quorum of a meeting of the members of the body (where the institution is a Trust as defined in the Trust Act, 1882 (I! of 1882), 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 transference of its assets, in the event of its dissolution, after meeting all liabilities, if any, to another institution to which approval has also been granted by the Board, or by the Federal Government, intimation of such transference to be given to the Board within three months of the dissolution;

(e) for the utilization 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 his relative or relatives;

(g) for the accounts of the institution being kept in a scheduled bank; or
(h) for prohibiting the making of any changes in the constitution, memorandum or articles of association, rules, regulations, or bye-laws or trust deed without the prior approval of the Board or the Federal Government, as the case may be; or

(i) for restricting the money validly set apart or not utilized to 25 per cent of the income including donations made to it or twenty thousand rupees which ever is less, and for certifying that the amounts so in excess of the said limit to has been invested in Government securities or in NIT Units under intimation to the Commissioner.

(4) Power to refuse approval.- The Board or the Federal Government, as the case may be, may refuse to grant approval to an institution if it is satisfied that the institution-
(a) has been or is being used for personal gain of any particular person or a group of persons;
(b) has been propagating the views of a particular political party;
(c) has been or is being managed in a manner calculated to personally benefit its members or their families; or
(d) has not or will not be able to achieve its declared aims and objects in view of its set up, administrative or otherwise.

(5) Renewal of approval.- (a) The Board may renew the approval granted by the Federal Government under sub-rule (2), and the Regional Commissioner of Income Tax may renew the approval granted by the Board under that sub-rule, if an application is made in Form II annexed to these rules in this behalf by the institution to the Commissioner having jurisdiction over the area in which the headquarters of the institution is situated within six months after the expiry of the validity of the approval last granted and such application is accompanied by such documents and instruments as are specified in clause (b) of sub-rule (1) and the said Commissioner is of the opinion that a genuine institution existed in the preceding three years. The said Commissioner shall finalise all such applications and forward the same to the Board or as the case may be the Regional Commissioner of Income Tax, within two months of the receipt of an application so made under this rule.

(b) An institution to which approval has been granted shall, by the 30th of January each year, submit to the Commissioner referred to above, in respect of the preceding calendar year:-
(i) a copy of the statement of audited accounts, as mentioned in clause (a) of sub-rule (3);
(ii) a statement of income and donations received and moneys paid;
(iii) a list of donees and beneficiaries with full addresses; and
(iv) a statement showing the money set apart or kept un-utilised with reasons thereof.

(c) On receipt of an application under clause (a), the said Commissioner shall process the said application to ensure that during the period preceding the year for which renewal application has been made, the institution:-
(i) complied with the provisions of clause (h) of sub-rule (3);
(ii) did not suffer any one or more of the disqualifications indicated in sub-rule (4); and
(iii) complied with the provisions of sub-rule (6).

(d) Renewal for any year shall not be granted if the institution did not enjoy approval for the calendar year immediately preceding the year in which renewal application is made under this sub-rule.

(e) The renewal of approval shall be valid up to the 31st December of the second calendar year following the calendar year in which such renewal of approval is granted.

(6) Power to withdraw approval.- The Board or the Federal Government may, at any time, withdraw the approval earlier granted, if the institution fails to comply with any of the provisions of sub-rule (5) or (9) and is satisfied that:-

(a) the said institution has failed to fully utilize its income and the donations received by it for achieving the purpose for which it was established; or

(b) the reason for setting apart, or for not utilising, the money referred to in sub-clause (iv) of clause (b) of sub-rule (5) is not valid; or

(c) the money validly set apart or not utilised exceeds twenty-five per cent of its income including donations made to it, or ten thousand rupees, whichever is less, and the amount so in excess is not certified by it to be invested in Government securities or NIT Units under intimation to the said Commissioner.

(7) Show cause notice to be given before withdrawal of approval.- No
approval of an institution shall be withdrawn under sub-rule (6) unless the institution has had an opportunity to show cause against the action proposed to be taken.

(8) Institutions granted approval before commencement of these rules.- The approval granted prior to the commencement of these rules to the institution under clause (d) of sub-section (1) of section 47 or sub-section (4) of section 47 shall be deemed to have been withdrawn unless an application in the manner laid down in sub-rule (5) is made on behalf of such institutions for calendar year 1983 within the time specified in clause (a) of sub-rule (5).

(9) The approval of an institution or a fund by the Federal Government under sub-section (4) of section 47 shall be subject to such further conditions as may be deemed necessary.

(10) Relaxation of requirements or conditions.- The Board or the Federal Government, as the case may be, may relax or modify any of the requirements or conditions of this rule, in any individual case, if it is satisfied that the requirements or conditions could not be fulfilled by the applicant for reasonable cause.

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