CBDT Circular Extends Due Date for Form 10B and 10BB

The Central Board of Direct Taxes (CBDT) recently announced a significant extension of the due date for filing Form 10B and 10BB through Circular No. 2/2024, providing relief to trusts and institutions that encountered issues with their audit reports for the Assessment Year (AY) 2023-24. This decision comes as a measure to rectify errors and ensure compliance within the taxation framework.

Under the Indian income tax regime, certain entities such as funds, institutions, trusts, universities, educational institutions, and hospitals enjoy exemptions from income tax, provided they fulfill specific conditions. One crucial condition mandates these entities to have their accounts audited and submit the audit report in the prescribed Form No. 10B or 10BB before the stipulated deadline.

However, instances arose where trusts or institutions inadvertently submitted audit reports in the wrong forms, leading to complications regarding compliance. Some submitted Form No. 10B when Form No. 10BB was necessary, and vice versa, for the AY 2023-24. To address these issues and facilitate compliance, the CBDT intervened with Circular No. 2/2024.

According to the CBDT circular, the failure to submit the audit report in the correct form could result in the denial of exemption, as it is a fundamental requirement for claiming such benefits. Recognizing the inadvertent errors made by trusts and institutions, the CBDT extended the deadline for rectification until March 31, 2024.

Form No. 10B is required for the audit report of trusts or institutions when their total income exceeds Rs 5 crores in the previous year, they have received foreign contributions, or they have utilized income outside India during the previous year. On the other hand, Form No. 10BB is necessary for additional matters related to audit reporting.

The CBDT's decision provides much-needed relief to affected entities, allowing those who filed their audit reports incorrectly on or before October 31, 2023, to rectify their mistakes. By allowing trusts and institutions to furnish the correct audit report in the applicable Form No. 10B or 10BB by March 31, 2024, the CBDT ensures fair treatment and compliance within the taxation system.

In conclusion, the CBDT's Circular No. 2/2024 serves as a timely intervention to address inadvertent errors in audit reporting by trusts and institutions. By extending the due date for filing Form 10B and 10BB, the CBDT demonstrates its commitment to facilitating compliance and ensuring fair treatment within the Indian income tax framework.