For AY 2023-24 my trust filed Form 10B when Form 10BB was the right form. Is there a CBDT relaxation, and what exactly does it cover?
Yes, but it is narrow. By Circular No. 2/2024 dated 5 March 2024 the CBDT allowed trusts and institutions that had furnished an audit report on or before 31 October 2023 in Form No. 10B where Form No. 10BB was applicable, and vice versa, to furnish the audit report in the applicable form for AY 2023-24 on or before 31 March 2024. It covers only AY 2023-24, only a wrong-form filing that was itself made by 31 October 2023, and the window it gave has closed.
Decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) on 2024-03-05, reported as Circular No. 2/2024, F.No.370142/6/2024-TPL, dated 5 March 2024. It bears on section 10(23C), section 11, section 12, section 12A, section 12AB, section 119 of the Income Tax Act 1961, in Charitable Trusts & Exemption and Capital Gains Exemptions matters.
The relaxation exists because AY 2023-24 was the first year in which the choice between Form 10B and Form 10BB stopped following the exemption route taken and started following a threshold test, and a large number of trusts picked the wrong one. Getting the boundaries right matters because the circular is repeatedly cited for more than it says. It does not help a trust that filed nothing by 31 October 2023, it does not help AY 2022-23 or earlier, and its own window expired on 31 March 2024. A trust outside those limits is back to s.119(2)(b) condonation and to the Tribunal line that treats the wrong form as a curable procedural defect — and s.119(2)(b) condonation for Form 10B and Form 10BB is itself the subject of Circular No. 16/2024 of 18 November 2024, which covers AY 2018-19 and subsequent years. The circular is also the clearest official confirmation of why the problem arose at all, and of the Board's own view that non-furnishing of the audit report in the prescribed form would otherwise result in denial of exemption and creation of a demand — which is exactly what the CPC does. For the underlying test, the department's published guidance is that Form 10B is required where total income computed without giving effect to ss.11 and 12 or s.10(23C)(iv), (v), (vi) or (via) exceeds Rs 5 crore, or where foreign contribution has been received, or where any part of the income has been applied outside India, and Form 10BB where all three of those are absent.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Income of a fund, institution, trust, university, other educational institution, hospital or other medical institution referred to in the specified sub-clauses of s.10(23C), and of a trust or institution registered under s.12AA or s.12AB, is exempt subject to conditions. One of those conditions is that the entity gets its accounts audited and furnishes the audit report in the prescribed Form No. 10B or Form No. 10BB before the specified date. It came to the CBDT's attention that in a number of cases trusts and institutions had furnished the audit report in Form No. 10B where Form No. 10BB was required for AY 2023-24, and in a number of other cases had furnished Form No. 10BB where Form No. 10B was required for the same year. Non-furnishing of the audit report in the prescribed form would result in denial of exemption, since it is one of the conditions to be satisfied, and denial on that account may result in creation of a tax demand.
The CBDT allowed those trusts and institutions which had furnished an audit report on or before 31 October 2023 in Form No. 10B where Form No. 10BB was applicable, and vice versa, to furnish the audit report in the applicable Form No. 10B or Form No. 10BB for AY 2023-24 on or before 31 March 2024.
The Board proceeded on the footing that furnishing the audit report in the prescribed form is a condition of exemption, so that a wrong-form filing would on a strict view cost the exemption and create a demand, and that the volume of wrong-form filings for AY 2023-24 in both directions warranted a general relaxation rather than case-by-case condonation. The relaxation was framed by reference to entities that had in fact furnished a report by the ordinary due date of 31 October 2023, so that the defect cured is the choice of form and not a failure to obtain and file an audit report at all.
the CBDT has allowed those trusts / institutions which have furnished audit report on or before 31st October, 2023 in Form No. 10B where Form No. 10BB was applicable and vice-versa, to furnish the audit report in the applicable Form No. 10B / 10BB for the A.Y. 2023-24, on or before 31st March, 2024.
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Handle my notice → Ask a CA on WhatsAppYes, but it is narrow. By Circular No. 2/2024 dated 5 March 2024 the CBDT allowed trusts and institutions that had furnished an audit report on or before 31 October 2023 in Form No. 10B where Form No. 10BB was applicable, and vice versa, to furnish the audit report in the applicable form for AY 2023-24 on or before 31 March 2024. It covers only AY 2023-24, only a wrong-form filing that was itself made by 31 October 2023, and the window it gave has closed. This was decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) and bears on section 10(23C), section 11, section 12, section 12A, section 12AB, section 119 of the Income Tax Act 1961. It is reported as Circular No. 2/2024, F.No.370142/6/2024-TPL, dated 5 March 2024. The relaxation exists because AY 2023-24 was the first year in which the choice between Form 10B and Form 10BB stopped following the exemption route taken and started following a threshold test, and a large number of trusts picked the wrong one. Getting the boundaries right matters because the circular is repeatedly cited for more than it says. It does not help a trust that filed nothing by 31 October 2023, it does not help AY 2022-23 or earlier, and its own window expired on 31 March 2024. A trust outside those limits is back to s.119(2)(b) condonation and to the Tribunal line that treats the wrong form as a curable procedural defect — and s.119(2)(b) condonation for Form 10B and Form 10BB is itself the subject of Circular No. 16/2024 of 18 November 2024, which covers AY 2018-19 and subsequent years. The circular is also the clearest official confirmation of why the problem arose at all, and of the Board's own view that non-furnishing of the audit report in the prescribed form would otherwise result in denial of exemption and creation of a demand — which is exactly what the CPC does. For the underlying test, the department's published guidance is that Form 10B is required where total income computed without giving effect to ss.11 and 12 or s.10(23C)(iv), (v), (vi) or (via) exceeds Rs 5 crore, or where foreign contribution has been received, or where any part of the income has been applied outside India, and Form 10BB where all three of those are absent. If it applies to you, the first step is this: Check the three facts the circular turns on before relying on it: the assessment year is 2023-24, an audit report was actually furnished on or before 31 October 2023, and the form furnished was the wrong one of the pair.
Income of a fund, institution, trust, university, other educational institution, hospital or other medical institution referred to in the specified sub-clauses of s.10(23C), and of a trust or institution registered under s.12AA or s.12AB, is exempt subject to conditions. One of those conditions is that the entity gets its accounts audited and furnishes the audit report in the prescribed Form No. 10B or Form No. 10BB before the specified date. It came to the CBDT's attention that in a number of cases trusts and institutions had furnished the audit report in Form No. 10B where Form No. 10BB was required for AY 2023-24, and in a number of other cases had furnished Form No. 10BB where Form No. 10B was required for the same year. Non-furnishing of the audit report in the prescribed form would result in denial of exemption, since it is one of the conditions to be satisfied, and denial on that account may result in creation of a tax demand. The matter was decided on 2024-03-05 by the CBDT Circulars & Instructions (Central Board of Direct Taxes). On those facts the CBDT Circulars & Instructions held as follows. The CBDT allowed those trusts and institutions which had furnished an audit report on or before 31 October 2023 in Form No. 10B where Form No. 10BB was applicable, and vice versa, to furnish the audit report in the applicable Form No. 10B or Form No. 10BB for AY 2023-24 on or before 31 March 2024.
The Board proceeded on the footing that furnishing the audit report in the prescribed form is a condition of exemption, so that a wrong-form filing would on a strict view cost the exemption and create a demand, and that the volume of wrong-form filings for AY 2023-24 in both directions warranted a general relaxation rather than case-by-case condonation. The relaxation was framed by reference to entities that had in fact furnished a report by the ordinary due date of 31 October 2023, so that the defect cured is the choice of form and not a failure to obtain and file an audit report at all. In the words reproduced by the source cited on this page: "the CBDT has allowed those trusts / institutions which have furnished audit report on or before 31st October, 2023 in Form No. 10B where Form No. 10BB was applicable and vice-versa, to furnish the audit report in the applicable Form No. 10B / 10BB for the A.Y. 2023-24, on or before 31st March, 2024."
It was decided by the CBDT Circulars & Instructions on 2024-03-05 and is reported as Circular No. 2/2024, F.No.370142/6/2024-TPL, dated 5 March 2024. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 10(23C), section 11, section 12, section 12A, section 12AB, section 119, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The CBDT allowed those trusts and institutions which had furnished an audit report on or before 31 October 2023 in Form No. 10B where Form No. 10BB was applicable, and vice versa, to furnish the audit report in the applicable Form No. 10B or Form No. 10BB for AY 2023-24 on or before 31 March 2024. It arises in Charitable Trusts & Exemption and Capital Gains Exemptions matters, on section 10(23C), section 11, section 12, section 12A, section 12AB, section 119 of the Income Tax Act 1961, and was decided by Central Board of Direct Taxes. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If any of those is missing, do not cite the circular. File the correct form, apply under s.119(2)(b) for condonation under Circular No. 16/2024 where the year is AY 2018-19 or later, and argue the defect as procedural on the Tribunal authority treating a wrong or late audit form as curable. Run the threshold test for every year separately — income without ss.11, 12 or the relevant s.10(23C) clauses against Rs 5 crore, foreign contribution received, and income applied outside India — rather than assuming the form used last year is right this year. Where the CPC has already raised a demand under s.143(1) for a wrong-form filing, take the appeal as well as the condonation application; a first appellate authority who dismisses the appeal because the condonation application is still pending is making an error the Tribunal has corrected. Do not confuse this circular with the other trust circulars of the period, but do not overlook them either. Circular No. 7/2024 dated 25 April 2024 extends the Form 10A and Form 10AB registration dates and is about a different failure. Circular No. 16/2024 dated 18 November 2024 is NOT: it is headed 'Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 9A/10/10B/10BB for Assessment Year 2018-19 and subsequent assessment years', and it therefore reaches a late or wrong Form 10B / 10BB for AY 2018-19 onwards, including the years Circular No. 2/2024 does not touch. If you are outside the 2/2024 window, that is the circular to read.
Validity check could not be completed. Validity check could not be completed and the entry rests on the Ministry of Finance press release rather than on the circular itself, which could not be retrieved. No later circular superseding, extending or withdrawing Circular No. 2/2024 was searched for. On its own terms the relaxation window closed on 31 March 2024, so the circular is spent as a filing route and is now of use mainly as a statement of the Board's position on wrong-form filings for AY 2023-24. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The circular's own text could not be retrieved. Three URL patterns on incometaxindia.gov.in returned 404 and a domain-restricted search did not surface the PDF. What was read in full is the Ministry of Finance press release of 5 March 2024 issued through the Press Information Bureau announcing the circular, which states the circular number and file number and sets out the operative relaxation in terms; the key_quote is taken from that release and is attributed to it, not to the circular. The threshold test stated in why_it_matters comes from the Income Tax Department's own published guidance page on Form 10B and Form 10BB, which states the test but does not state the assessment year from which it applies; the inference that the split is a new-regime feature first biting in AY 2023-24 rests on the circular's own statement that the wrong-form problem arose 'for the A.Y. 2023-24' and on the Bangalore Tribunal's treatment of AY 2022-23 in CDO Jain Education Society, where the form followed the exemption route. The rule and notification numbers behind the change were not verified and are deliberately not cited. A later pass should retrieve the circular PDF and replace both the source_url and the quote. The operative paragraphs of Circular No. 16/2024 were not read; only its title, date and subject were verified from the department's own circulars page. Its monetary limits, the authorities empowered to condone and any time limit for the application are not stated here because they were not read. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The CBDT allowed those trusts and institutions which had furnished an audit report on or before 31 October 2023 in Form No. 10B where Form No. 10BB was applicable, and vice versa, to furnish the audit report in the applicable Form No. 10B or Form No. 10BB for AY 2023-24 on or before 31 March 2024.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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