Trusts/ Institutions allowed to furnish the audit report in Form No. 10B/10BB on or before 31st March, 2024- CBDT Circular
- Entities referred in specified sub-clauses of section 10(23C) of the Income Tax Act, 1961 or trusts registered under section 12AA/12AB of the Act gets exemption in relation to their income subject to fulfilment of certain conditions specified under the Act.
- One of the conditions required to be fulfilled by the trust or institution in order to be eligible to claim exemption, is, that it is required to get its accounts audited and furnish the audit report in the prescribed Form No. 10B/ 10BB before the specified date.
- Rule 16CC and 17B of the Income Tax Rules, 1962 prescribe the applicability of the Form No. 10B/ 10BB as below:
(a) Form No. 10B:
- In cases where the total income of the trust or institution, exceeds Rs. 5 crores during the previous year or
- such trust of institution has received any foreign contribution during the previous year; or
- such trust or institution has applied any part of its income outside India during the previous year;
(b) Form No. 10BB: In any other cases
- The new amended forms 10B/ 10BB have been notified w.e.f. A.Y. 2023-24 and are having due date for furnishing as 31st October 2023 for A.Y. 2023-24. Thus, A.Y. 2023-24 is the first year of amended forms 10B/ 10BB.
- It has been noticed that in a number of cases trusts/ institutions have furnished audit report in Form No. 10B, where Form No. 10BB was required to be furnished for the A.Y. 2023-24. Similarly, in a number of cases, Form No. 10BB is found to have been furnished in place of Form No. 10B.
- Non-furnishing of audit report in prescribed form would result in denial of exemption in such cases as it is one of the conditions which is required to be satisfied for claim of exemption.
- In view of the same, the CBDT by way of circular no. 2/2024 dated 05th March 2024 has allowed those trusts/ institutions which have furnished audit report on or before 31st October 2023 in wrong form (10B/10BB, as the case may be), to furnish audit report in the correct applicable form No. 10B/10BB for the A.Y. 2023-24 on or before 31st March, 2024.
This is a welcome move by the CBDT as wrong audit report was filed in cases of large number of trusts/ institutions resulting in denial of tax exemption, leading to huge tax demands. Now, all such trusts/ institutions who ignorantly filed wrong audit report form can correct their mistake and file the audit report in Form 10B/10BB on or before 31st March 2024. This will save all such trusts/ institutions from serious tax incidences.
Please note that the benefit of this circular is available only to such trusts/ institutions which had timely filed Form No. 10B/10BB on or before 31st October 2023 but filed the wrong audit report form. Any trusts/ institutions which could not file audit report in Form 10B/10BB on or before 31st October 2023 will not be eligible to take benefit of the said circular.
The CBDT Circular No. 2/2024 dated 05th March 2024 is attached with this article.
