The Charitable and Religious Trusts Act was enacted in 1920 to provide effective management and supervision of the Charitable and Religious institutions. The primary object of the Act was to obtain information relating to the charitable and religious institutions created for the benefit of the public and facilitate the trustees to obtain Court orders in the issues connected therewith. The Act also intends to formulate special provisions to pay off the expenses incurred in the court proceedings against the trustees.

The persons who are connected with the religious or charitable organizations created for the benefit of the public shall file a petition before the Court to obtain an order relating to any matters enumerated below:

• The Court shall issue direction to the trustee to endow with the necessary documents which contains the particulars of nature, purpose, worth conditions, administration, subject-matter of the trust and the income of the trust.
• The direction shall also be relating with the examination of the accounts and the audit of the account for a term exceeding three years.

The petition shall contain the relation of the person with the trust and the details of the audit for which he seeks direction. The petition shall be in written format with the signature of the petitioner. The petitioner should verify the petition in the manner stipulated under the Civil Procedure Code. Where a petition is filed before the court, the court shall take evidence and conduct necessary inquiry whether the trust comes under the purview of the present Act and the petitioner is related with the trust. If the Court is satisfied as to the issues it shall declare a date for hearing and furnish a copy of the notice containing the date of hearing to the trustee and other persons connected with the trust. The court shall conduct the proceedings and hear the petitioner and the trustee and conduct necessary inquiries as the court estimates to be essential. The Court shall also give the trustee an opportunity to file a written statement in the manner provided under the Criminal Procedure Code.

The Court shall issue stay of the proceedings, where a suit is initiated by the trustee to declare that that the trust is not in existence and the application of the Act does not extend to the trust against which the petition is filed. After complying with the procedures, the Court shall pass required orders or dismiss the petition. The Court is not empowered to determine the question of title among the petitioner or any person alleging the title unfavorably to the trust. The non-compliance with the orders of the Court shall be considered as breach of trust against which suit shall be initiated in accordance with the Civil Procedure Code.
The trustee is permitted under the Act to institute a petition to seek guidance or direction of the Court for the effective administration and supervision of the trust. But the Court is not bound to provide advice if the Court is of the opinion that case is not proper for summary disposal. The petition before a court shall be commenced only under the circumstances mentioned under the Act. Further, certain provisions of the Civil Procedure Code are applicable to the present Act to enforce the presence of any person before the Court, taking evidence, production of necessary documents, entrusting of commission etc. The procedures followed for the execution of decree under the Civil Procedure Code shall be applicable for the execution of orders under the present Act.

The donations provided for charitable purposes are covered under the Income Tax Act, 1961 and the Finance Act, 2009 has amended the definition of charitable purpose.