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Sakshi Srivastava
| Updated: 23 Nov, 2020 | Category: Taxation

CBDT grants Condonation of Delay in filing of Form 10BB by Trusts and institutions

filing of Form 10BB

The Central Board of Direct Taxes (CBDT) has granted Condonation of Delay in filing of Form 10BB by Trusts and Institutions for the Assessment Year 2016-17 and the subsequent years. As per the provisions of Section 10(23C) of Income Tax Act, 1961 where the total income of the trust or institution surpass the maximum amount that is not chargeable to tax in any of the previous year has to get its accounts audited in that particular year by Charted Accountant before the precise date.

As per Rule 16CC of the Income Tax Rules, 1962 the audit report of the accounts of trust or institution is to be provided in Form 10BB. According to Rule 12(2) of the Income Tax Rules, such audit report is to be provided electronically. The failure to provide report in the Form 10BB along with the return results in ineligibility of trust to claim exemption under Section 10(230) of the Income Tax Act[1]. Before, there was a condonation of delay that was provided for delay in submission of Form 10B.

Reason for Condonation of Delay in filing of Form 10BB by Trusts

The circulars say that the Central Board of Direct Taxes has received various depictions stating that Form 10BB by trusts cannot be filed with the Income Tax Return for Assessment Year 2016-17 & 2017-18. It has been requested that the delay in filing of Form 10BB may be condoned.

The Central Board of Direct Taxes with a view to speed up the disposal of applications filed by the trusts for condonation of delay and in exercise of the powers conferred upon them under Section 119(2) (b) of the Income Tax Act, the Central Board of Direct Taxes issued directions.

filing of Form 10BB by Trusts

Direction by the CBDT in case of Filing of Form 10BB by Trusts

The Central Board of Direct Taxes (CBDT) has directed that  in the cases of postponed applications in filing of Form 10BB for prior years to Assessment Year 2018-19, the Commissioners of Income tax are allowed to admit the applications for condonation of delay under section 119(2)(b) of the Income Tax Act.

The Commissioner while entertaining the postponed applications related to filing of Form 10BB have to look into the reason that the application was disallowed by a reasonable cause from within the stipulated time.

Note: Additional, all such applications has to be disposed of by 31st March, 2021.

The Central Board of Direct Taxes (CBDT) has directed that if there is delay of up to a period of 365 days in filing of Form 10BB for Assessment Year 2018-19, the Commissioners of Income tax are allowed to admit the postponed applications for condonation of delay under section 119(2) of the Income tax Act, 1961 and decide on merits as per their discretion.

Takeaway

The Commissioners of Income tax shall, while entertaining such postponed applications in filing of Form 10BB by trusts, convince them that the applicant was barred by reasonable cause from filing such application within the predetermined time.

circular_19_2020

Read our article: CBDT Provides ITR Filing Compliance Check for Scheduled Commercial Banks

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Sakshi Srivastava

Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.

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