The Central Board of Direct Taxes has issued Circular No. 10, 2019 – “Condonation of delay in filing Form no. 10B of the Income-tax Act, 1961 (hereafter ‘Act’)”, on 22nd May 2019, wherein the Board has condoned the delay in filing Form no. 10B by trusts / institutions for years prior to 2018-19.
WHAT IS FORM 10B?
- As per Section 12A of the Act, when the total income (as computed under Act) of a trust / institution exceeds the maximum amount, which is not chargeable to income-tax in any previous year, the accounts of the trust or institution for that year have to be audited by an accountant. The audit report of the accounts of such a trust or institution is furnished electronically in Form no.10B under Rule 17B of the Act.
- The failure to furnish such report results in disentitlement of the trust from claiming exemption under sections 11 and 12 of the Act.
SUPPRESSION OF PREVIOUS CIRCULAR
The previous instruction (F. No. 267 /482/ 77- IT (part) dated 09.02.1978) were issued by the Board on receiving representations that Form no. 10B could not be filed along with the return of income for AY 2016-17 and AY 2017-18. Therefore CBDT had authorized the ITO to accept a belated audit reports. This instruction has now been suppressed and hence need aroused for new directions in this regard.
NEW DIRECTIONS ISSUED
In exercise of the powers conferred under section 119(2) of the Act, the CBDT via the following new Circular directs that Delay in filing Form 10B is condoned for AY 2016-17 and AY 2017-18:Only in cases where:
- Audit Report for the previous year has been obtained before the filing of return of income; AND
- Report has been furnished subsequent to the filing of the return of income but before the date specified under section 139 of the Act.
In all other cases of belated applications in filing Form no. 10B for years prior to 2018- 19, such applications may be condoned by the Commissioners of Income-tax under section 119(2)(b) of the Act and the Commissioner should dispose off such applications by 30.09.2019.
Click here to see Circular.
