Order under section 119 of the Income-tax Act, 1961

Summary– Income of certain trusts and institutions is exempt under specific conditions per the Income-tax Act, 1961. For eligibility, these entities must have their accounts audited if their total income exceeds the tax-free limit. The audit report must be furnished in Form No. 10B or Form No. 10BB based on specific criteria. New forms, effective from assessment year (AY) 2023-24, were introduced on 1st April 2023. Due to transitional issues, some entities filed incorrect forms. The Central Board of Direct Taxes (CBDT) allows those who filed incorrect forms by 31st October 2023 to submit the correct forms by 31st March 2024, ensuring compliance and maintaining their exemption status.

Name- Order under section 119 of the Income-tax Act, 1961 – reg.

Date –05th March, 2024

Circular number- Circular 02 of 2024

Link- https://incometaxindia.gov.in/communications/circular/circular-no-2-2024.pdf

Brief of Provisions-The Central Board of Direct Taxes (CBDT) issued an order under Section 119 of the Income-tax Act, 1961, addressing the conditions for tax exemption for trusts and institutions. Under the first regime (Section 10(23C)) and the second regime (Sections 12AA or 12AB), trusts must fulfill specific conditions, including getting their accounts audited if their total income exceeds the non-taxable limit. Rules 16CC and 17B mandate audit reports in Form No. 10B or 10BB based on certain criteria. Effective from AY 2023-24, the new forms were notified in February 2023.

It has come to the attention of the Board that in a number of cases trusts / institutions have furnished audit report in Form No. lOB, where Form No. 10BB was required to be furnished for the A.Y. 2023-24. Similarly, in a number of cases trusts / institutions have furnished audit report in Form No. 10BB, where Form No. lOB was required to be furnished for the A.Y. 2023-24.

In view of the above, the Central Board of Direct Taxes, in exercise of its powers under section 119 of the Act hereby allows those trusts I institutions which have furnished audit report on or before 31st October, 2023 in Form No. lOB where Form No. 10BB was applicable and vice-versa, to furnish the audit report under clause (b) of the tenth proviso to clause (23C) of section 10 and sub-clause (ii) of clause (b) of sub-section (1) of section l2A of the Income-tax Act, 1961, in the applicable Form No. 10B / 10BB for the assessment year 2023-24, on or before 31 st March, 2024.

For a detailed brief of the order click on the link – https://incometaxindia.gov.in/communications/circular/circular-no-2-2024.pdf