The Central Board of Direct Taxes (CBDT) has granted relief to trusts and institutions regarding the submission of audit reports for the Assessment Year (A.Y.) 2023-24. CBDT, in Circular No. 2/2024 dated March 5th, 2024, has announced that certain trusts and institutions can now rectify their audit reports by March 31st, 2024.
Under the Income-tax Act, 1961, funds, institutions, universities, educational institutions, hospitals, and medical institutions falling under specified sub-clauses of section 10 (23C), as well as trusts or institutions registered under section 12AA/12AB of the Act, are eligible for income tax exemption subject to fulfilling specific conditions.
One such condition necessitates these entities to undergo auditing and submit the audit report in the prescribed Form No. 10B or 10BB by a specified date.
However, the CBDT noted instances where trusts and institutions submitted Form No. 10B instead of Form No. 10BB, or vice versa, for the A.Y. 2023-24.
Failure to submit the correct audit report in the prescribed form could lead to the denial of exemption, potentially resulting in tax demands.
In light of this, CBDT has provided relief to those trusts and institutions that mistakenly submitted Form No. 10B when Form No. 10BB was required, and vice versa. Entities that submitted the wrong form on or before October 31st, 2023, now have until March 31st, 2024, to rectify this error and submit the correct Form No. 10B or 10BB for the A.Y. 2023-24.
This move aims to mitigate the risk of denial of exemption and the subsequent tax implications for these entities.
CBDT’s Circular No. 2/2024 can be accessed on the official website www.incometaxindia.gov.in.
