ISLAMABAD, Sept 2: The Central Board of Revenue (CBR) has notified rules for approval and appointment of certification agencies for performance evaluation of non-profit organizations for the purpose of granting income tax exemption.
The amendments were made in the Income Tax Rules 2002, said an income tax notification SRO748 issued here on Thursday. According to the rules, the chairman CBR shall constitute a committee for approval and appointment of certification agencies, comprising of not less than three members.
The CBR chairman shall also designate a member of the committee to serve as its chairman. All nominations to the committee shall be ex-officio. One third of the membership or two members of the committee, whichever is larger, shall constitute the quorum for meetings of the committee.
An application for approval and appointment as a certification agency shall be placed before the committee, which shall consider the application on its own merit and decide through a majority vote; the chairman of the committee shall caste a vote only in case of a tie.
The committee shall consider the following criteria, for approval and appointment of certification agency, namely: Demonstrated and established eminence, credibility and stature of the governing body of such organization that brings respect and credibility to the organization and its work; understanding of the organization, essentially the senior management and programme staff, of the parameters of evaluation as approved by the Central Board of Revenue; human resource, quantity as well as quality, available with the organization to conduct professional, objective and transparent evaluations of non-profit organizations; financial resources available with the organization for meeting the costs incurred on such evaluations; organizational understanding and experience of working with the non-profit organizations; experience of evaluating non-profit organizations or social programmes; systems put in place by the organization to conduct evaluation and award of certification; and monitoring mechanisms to ensure transparency and objectivity.
The committee may call for any document, report and statement from the organization concerned to assess the capacity of the organization to undertake professional, objective and transparent evaluation as per the criteria specified in sub-rule; the committee may also interview the managerial and programme staff of the organization to assess their level of experience, understanding and professionalism.
An application received by the committee might be decided upon within a period of three months from the date of receipt of such application. An applicant adversely affected by any decision of the committee may file an appeal before the Member (Direct Taxes), CBR, within 30 days of the service of the decision upon the application.
An approval and appointment granted under this rule shall be for a period of three years and thereafter the committee shall re-assess the capacity and evaluate the performance of such organization to function as a certification agency.
The committee shall complete such re-evaluation and its decision within three months, during which the certification agency shall continue to function as a legitimate certification agency.
In case of any change in the status of an approved and appointed certification agency that may adversely affect its functioning as such an agency or in case of any violation of the standards of professionalism, transparency, integrity or objectivity coming to the knowledge of the committee. It may, after due inquiry and after providing proper opportunity of being heard to the agency, withdraw such approval and appointment at any time.
