CBDT has extended the timeline up to 31st March 2024 to furnish the audit report in the applicable Form 10B or 10BB for AY 2023-24 in the case of certain trusts/institutions, vide Circular 2/2023.
Certain funds, institutions, trusts, universities, educational institutions, hospitals, or medical institutions referred to in specific sub-clauses of Section 10(23C), or any trust or institution registered under Section 12AA/12AB of the Income-tax Act, 1961, are eligible for exemption subject to fulfilling the prescribed conditions.
One such condition for claiming exemption is that the trust or institution must get its accounts audited and furnish the audit report in the prescribed/applicable Form 10B or 10BB, before the specified date if its total income, computed without considering the exemption, exceeds the maximum non-taxable limit in any previous year.
The CBDT observed that numerous trusts/institutions had furnished the audit report in incorrect Form, i.e. either Form 10B has been used for AY 2023-24 where Form 10BB was required and vice versa. However, non-furnishing of the audit report in the prescribed form would result in the denial of exemption, as it is a mandatory condition for claiming exemption, potentially leading to the creation of a tax demand.
Consequently, the CBDT has reviewed the situation and has permitted those trusts/institutions that had furnished the audit report on or before October 31, 2023 using incorrect Form 10B or 10BB, to submit the audit report in the applicable Form 10B or 10BB for the AY 2023-24, on or before March 31, 2024.
CBDT Income Tax Circular 2/2024 dated 05/03/2024: Timeline Extended for Trusts/Institutions to File Audit Report in Correct Form 10B or 10BB