Devsthan Vibhag Compliances for Charitable Trusts in Rajasthan: A Complete Guide

Public charitable and religious trusts in Rajasthan play a pivotal role in social welfare, education, healthcare, and cultural preservation. However, operating such an organization comes with a robust regulatory framework. In Rajasthan, all public trusts are governed by the Rajasthan Public Trusts Act, 1959, which is administered by the Devasthan Department (Devsthan Vibhag) of the State Government. Non-compliance with these rules can lead to serious legal consequences, including the cancellation of registration, personal liability for trustees, and loss of tax exemptions under the Income Tax Act (such as 12A and 80G). Here is a comprehensive guide to the essential compliances every trustee must know.

1. Mandatory Registration under the Rajasthan Public Trusts Act, 1959

Unlike some states where registration of a trust is optional, in Rajasthan, registration under the Rajasthan Public Trusts Act, 1959 is mandatory for all public charitable and religious trusts. Under Section 17 of the Act, the working trustee of every public trust must apply for registration within two months of its creation.

• Application: The application is filed in the prescribed format (Form II) to the Assistant Devasthan Commissioner of the division where the trust's principal office is located.
• Key Documents Required: The application must be accompanied by the original Trust Deed, identity and address proofs of all trustees (PAN, Aadhaar), proof of the registered office address (utility bills, NOC, or rent agreement), and a list of trust property (movable and immovable).
• Public Notice: Upon receiving the application, the department issues a public notice (often published in newspapers) inviting objections from the general public. A statutory period of 60 days is provided for anyone to raise objections.
• Certificate of Registration: If no valid objections are received and the Assistant Commissioner is satisfied with the inquiry, the trust is entered into the Register of Public Trusts, and a Certificate of Registration (Form V) is issued.

2. Maintenance of Accounts and Annual Audits

Transparency in financial transactions is a core focus of the Devsthan Vibhag. The Act imposes strict conditions on how trust accounts must be maintained and verified:

• Regular Bookkeeping: Under Section 32, every trust must maintain regular, accurate accounts of all receipts, expenditures, assets, and liabilities. These accounts must be balanced annually on the 31st of March.
• Mandatory Audit: Section 33 mandates that the accounts of every public trust must be audited annually by a qualified Chartered Accountant (CA) or a firm of Chartered Accountants.
• Timeline for Audit: The audit must be completed, and the audit report must be prepared within the prescribed period (usually within six months from the closing of the financial year).
• Audit Report Content: The auditor's report must certify whether the accounts show a true and fair view of the trust's affairs, whether the trust's funds have been utilized as per the objectives, and highlight any irregularities or misappropriations.

3. Annual Budget Submission

Under Section 36 of the Rajasthan Public Trusts Act, if a trust’s gross annual income from all sources exceeds the prescribed statutory limit (currently a very low threshold, historically set at ₹3,600, but applied broadly to active trusts), the working trustee must prepare and submit a budget for the upcoming financial year.

The budget showing the estimated receipts and expenditure for the next year must be submitted to the Assistant Devasthan Commissioner at least one month before the commencement of the financial year. Filing this budget ensures that the department is aware of the planned activities and financial allocations of the trust.

4. Prior Sanction for Sale or Transfer of Trust Property

One of the most critical and frequently litigated compliance areas under the Act is the management of trust property. Trustees do not have absolute authority to alienate trust assets. Under Section 31 of the Act:

• No sale, exchange, gift, or long-term lease (exceeding 3 years in the case of agricultural land and 1 year in the case of non-agricultural land or buildings) of any immovable property belonging to a public trust is valid without the prior written sanction of the Assistant Devasthan Commissioner.
• Approval Criteria: To grant permission, the Assistant Commissioner must be satisfied that the transaction is in the interest of the trust, is necessary for achieving its objectives, or is for the clear benefit of the public.
• Consequences of Violation: Any transfer of property executed without prior approval from the Devsthan Vibhag is legally void, and the trustees involved can be held personally liable for breach of trust.

5. Changes in the Trust Board or Constitution

Any change in the trustees, the registered office address, the trust's objectives, or the list of trust property must be reported to the Devasthan Department. Under Section 23 of the Act, the working trustee must inform the Assistant Commissioner of any such changes within 90 days of their occurrence by filing a "Change Report." The department will verify the change (e.g., resignation or appointment of a trustee) and update the official Register of Public Trusts accordingly.

A Quick Compliance Checklist for Rajasthan Trusts

Conclusion

Fulfilling the compliance requirements of the Devsthan Vibhag is essential to protect the integrity of a charitable trust in Rajasthan. Regular audits, timely budget submissions, and seeking prior approvals for property dealings ensure that the trust maintains its legal status and continues to enjoy tax benefits under federal laws. Trustees must act proactively to avoid regulatory notices and potential litigation.

For professional assistance in trust registration, accounting, Devsthan audits, and compliance management in Rajasthan, contact CA Chitransh Vijay at CVSS & Associates.