Our auditor filed Form 10BB when Form 10B was required for AY 2023-24, and CPC has taxed us under s.13(10). We filed the right form only in 2025 and the condonation application is still pending. What can the Tribunal do?
The Tribunal remitted the matter to the Assessing Officer to pass an order in accordance with the outcome of the pending s.119(2)(b) condonation application before the CIT (Exemptions). It recorded that this was not a case of no audit report at all but of a report filed both belatedly and in the incorrect form, and that CBDT Circular No. 2/2024 did not rescue the trust because that circular only covered wrong-form reports furnished on or before 31 October 2023.
Decided by the ITAT (Prashant Maharishi VP and Keshav Dubey JM) on 2026-06-11, reported as ITA No. 62/Bang/2026 (ITAT Bangalore 'A' Bench). It bears on section 11, section 12A, section 12AB, section 13(10), section 119, section 119(2)(b), section 139(1), section 143(1), section 250 of the Income Tax Act 1961, in Charitable Trusts & Exemption and Capital Gains Exemptions matters.
This is the wrong-form problem in its harder direction — Form 10BB filed where Form 10B was required — and it shows exactly where the two CBDT circulars stop. Circular No. 2/2024 dated 5 March 2024 gave a cure only to trusts that had furnished the wrong form on or before 31 October 2023 and then furnished the right one by 31 March 2024; this trust filed the wrong form in November 2023 and the right one in February 2025, so it fell outside on both dates. Circular No. 16/2024 dated 18 November 2024 then empowered the PCIT/CIT to admit a delayed application where the delay is up to 365 days, on reasonable cause and genuine hardship, and that is the route left. Note also the first appellate authority's position, which the Tribunal did not disturb: the Addl./JCIT(A) held he has no power under s.119 and that exercising it would encroach on senior authorities. The threshold that decides which form applies is total income exceeding Rs.5 crore before claiming s.11 exemption; the consequence of failure is recomputation under s.13(10), which here converted a nil return into income of Rs.2,56,55,320.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee is a public charitable trust registered under s.12AB. For AY 2023-24 it filed its return on 30 November 2023, within the due date, declaring nil income after claiming s.11 exemption of Rs.10,67,61,964. Because its total income before the s.11 exemption exceeded Rs.5 crore, the audit report was required in Form No. 10B, to be filed at least one month before the s.139(1) due date. The auditor instead filed Form No. 10BB, on 8 November 2023 (stated as 9 November 2023 in one paragraph). Processing under s.143(1) by intimation dated 18 November 2024 denied the s.11 exemption on the ground that Form 10B had not been e-filed and recomputed income under s.13(10) at Rs.2,56,55,320, being gross income of Rs.10,67,61,964 less total expenditure of Rs.8,11,06,644. The correct Form No. 10B was filed on 24 February 2025. An application under s.119(2)(b) for condonation of the delay was filed before the CIT (Exemptions), Bengaluru on 28 March 2025 and was still pending. The Addl./JCIT(A)-3, Kolkata dismissed the appeal on 18 December 2025, holding that an appellate authority is not empowered to exercise any power under s.119 and that doing so would encroach on the powers of senior authorities and render s.119 infructuous.
The appeal was partly allowed for statistical purposes (paragraph 10). The issue was remitted to the Assessing Officer (Exemptions) to pass an order in accordance with law after taking into consideration the result of the condonation application pending before the CIT (Exemptions), with a reasonable opportunity of being heard (paragraph 9.2). The Tribunal recorded as its finding that this was not a case in which no audit report was filed for the year, but one in which the report was filed both belatedly and in the incorrect form (paragraph 9).
On the record the return was within time, the report in Form No. 10BB was filed on 8 November 2023 which was not within the time prescribed, and the correct Form No. 10B was filed only on 24 February 2025 (paragraph 9). The Tribunal set out CBDT Circular No. 2/2024 dated 5 March 2024, by which the Board, having noticed that many trusts had furnished Form No. 10B where Form No. 10BB was required for AY 2023-24 and vice versa, and that non-furnishing in the prescribed format would result in denial of exemption because it is one of the conditions for the claim, allowed trusts that had furnished the report on or before 31 October 2023 in the wrong one of the two forms to furnish it in the applicable form by 31 March 2024; the assessee, having furnished the correct Form No. 10B suo motu only on 24 February 2025, was outside that relaxation (paragraph 9.1). It further noted CBDT Circular No. 16/2024 dated 18 November 2024 empowering the PCIT/CIT to admit a delayed application for condonation of delay in filing Form No. 10BB or 10B where the delay is up to 365 days, on being satisfied of reasonable cause and genuine hardship on merits (paragraph 9.1). Since the condonation application was pending and both parties asked for it, remand to await its outcome was the appropriate course (paragraph 9.2).
The audit report was not only filed belatedly but also in the incorrect form also.
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Handle my notice → Ask a CA on WhatsAppThe Tribunal remitted the matter to the Assessing Officer to pass an order in accordance with the outcome of the pending s.119(2)(b) condonation application before the CIT (Exemptions). It recorded that this was not a case of no audit report at all but of a report filed both belatedly and in the incorrect form, and that CBDT Circular No. 2/2024 did not rescue the trust because that circular only covered wrong-form reports furnished on or before 31 October 2023. This was decided by the ITAT (Prashant Maharishi VP and Keshav Dubey JM) and bears on section 11, section 12A, section 12AB, section 13(10), section 119, section 119(2)(b), section 139(1), section 143(1), section 250 of the Income Tax Act 1961. It is reported as ITA No. 62/Bang/2026 (ITAT Bangalore 'A' Bench). This is the wrong-form problem in its harder direction — Form 10BB filed where Form 10B was required — and it shows exactly where the two CBDT circulars stop. Circular No. 2/2024 dated 5 March 2024 gave a cure only to trusts that had furnished the wrong form on or before 31 October 2023 and then furnished the right one by 31 March 2024; this trust filed the wrong form in November 2023 and the right one in February 2025, so it fell outside on both dates. Circular No. 16/2024 dated 18 November 2024 then empowered the PCIT/CIT to admit a delayed application where the delay is up to 365 days, on reasonable cause and genuine hardship, and that is the route left. Note also the first appellate authority's position, which the Tribunal did not disturb: the Addl./JCIT(A) held he has no power under s.119 and that exercising it would encroach on senior authorities. The threshold that decides which form applies is total income exceeding Rs.5 crore before claiming s.11 exemption; the consequence of failure is recomputation under s.13(10), which here converted a nil return into income of Rs.2,56,55,320. If it applies to you, the first step is this: Work out which form was due for the year: on the facts here, gross receipts above Rs.5 crore before the s.11 exemption meant Form 10B, filed at least one month before the s.139(1) due date.
The assessee is a public charitable trust registered under s.12AB. For AY 2023-24 it filed its return on 30 November 2023, within the due date, declaring nil income after claiming s.11 exemption of Rs.10,67,61,964. Because its total income before the s.11 exemption exceeded Rs.5 crore, the audit report was required in Form No. 10B, to be filed at least one month before the s.139(1) due date. The auditor instead filed Form No. 10BB, on 8 November 2023 (stated as 9 November 2023 in one paragraph). Processing under s.143(1) by intimation dated 18 November 2024 denied the s.11 exemption on the ground that Form 10B had not been e-filed and recomputed income under s.13(10) at Rs.2,56,55,320, being gross income of Rs.10,67,61,964 less total expenditure of Rs.8,11,06,644. The correct Form No. 10B was filed on 24 February 2025. An application under s.119(2)(b) for condonation of the delay was filed before the CIT (Exemptions), Bengaluru on 28 March 2025 and was still pending. The Addl./JCIT(A)-3, Kolkata dismissed the appeal on 18 December 2025, holding that an appellate authority is not empowered to exercise any power under s.119 and that doing so would encroach on the powers of senior authorities and render s.119 infructuous. The matter was decided on 2026-06-11 by the ITAT (Prashant Maharishi VP and Keshav Dubey JM). On those facts the ITAT held as follows. The appeal was partly allowed for statistical purposes (paragraph 10). The issue was remitted to the Assessing Officer (Exemptions) to pass an order in accordance with law after taking into consideration the result of the condonation application pending before the CIT (Exemptions), with a reasonable opportunity of being heard (paragraph 9.2). The Tribunal recorded as its finding that this was not a case in which no audit report was filed for the year, but one in which the report was filed both belatedly and in the incorrect form (paragraph 9).
On the record the return was within time, the report in Form No. 10BB was filed on 8 November 2023 which was not within the time prescribed, and the correct Form No. 10B was filed only on 24 February 2025 (paragraph 9). The Tribunal set out CBDT Circular No. 2/2024 dated 5 March 2024, by which the Board, having noticed that many trusts had furnished Form No. 10B where Form No. 10BB was required for AY 2023-24 and vice versa, and that non-furnishing in the prescribed format would result in denial of exemption because it is one of the conditions for the claim, allowed trusts that had furnished the report on or before 31 October 2023 in the wrong one of the two forms to furnish it in the applicable form by 31 March 2024; the assessee, having furnished the correct Form No. 10B suo motu only on 24 February 2025, was outside that relaxation (paragraph 9.1). It further noted CBDT Circular No. 16/2024 dated 18 November 2024 empowering the PCIT/CIT to admit a delayed application for condonation of delay in filing Form No. 10BB or 10B where the delay is up to 365 days, on being satisfied of reasonable cause and genuine hardship on merits (paragraph 9.1). Since the condonation application was pending and both parties asked for it, remand to await its outcome was the appropriate course (paragraph 9.2). In the words reproduced by the source cited on this page: "The audit report was not only filed belatedly but also in the incorrect form also." The decision followed or applied CBDT Circular No. 2/2024 dated 5 March 2024 — set out and applied; held not to cover this assessee; CBDT Circular No. 16/2024 dated 18 November 2024 — noted as the route open to the assessee.
It was decided by the ITAT on 2026-06-11 and is reported as ITA No. 62/Bang/2026 (ITAT Bangalore 'A' Bench). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 11, section 12A, section 12AB, section 13(10), section 119, section 119(2)(b), section 139(1), section 143(1), section 250, 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 cuts both ways and is cited by both sides. The appeal was partly allowed for statistical purposes (paragraph 10). The issue was remitted to the Assessing Officer (Exemptions) to pass an order in accordance with law after taking into consideration the result of the condonation application pending before the CIT (Exemptions), with a reasonable opportunity of being heard (paragraph 9.2). The Tribunal recorded as its finding that this was not a case in which no audit report was filed for the year, but one in which the report was filed both belatedly and in the incorrect form (paragraph 9). It arises in Charitable Trusts & Exemption and Capital Gains Exemptions matters, on section 11, section 12A, section 12AB, section 13(10), section 119, section 119(2)(b), section 139(1), section 143(1), section 250 of the Income Tax Act 1961, and was decided by Prashant Maharishi VP and Keshav Dubey JM. 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. Check the Circular No. 2/2024 window before relying on it — the wrong form must have been furnished on or before 31 October 2023 and the correct form by 31 March 2024. Outside those dates the circular does not help. File the s.119(2)(b) condonation application with the PCIT/CIT and frame it within Circular No. 16/2024 — delay up to 365 days, reasonable cause, genuine hardship on merits. Do not expect the CIT(A) or JCIT(A) to condone; the appellate authority here held it had no s.119 power, and the Tribunal did not disagree. Ask instead for a remand to await the condonation decision, which is the relief both sides asked for and the Tribunal granted. Compute the s.13(10) exposure early: the recomputation allows only the specified expenditure, so the demand can be a large fraction of gross receipts even where the trust has spent everything on its objects.
Validity check could not be completed. Validity check could not be completed; no later treatment was searched for. This is a remand order, so it decides nothing finally on the exemption — its value is the finding that a wrong-form report is not the same as no report, and the mapping of the two CBDT circulars onto the dates. Both circulars are already in this library. 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 order runs to ten numbered paragraphs (with sub-paragraphs 9.1 and 9.2) and was transcribed in full from the plain /doc/ URL; the sentence quoted from paragraph 9 was re-checked through /docfragment/ and came back word for word. Two date conflicts inside the report: paragraph 3 says Form No. 10BB was filed on 9 November 2023, while paragraph 9 twice says 8 November 2023; and paragraph 3 says the condonation application was filed before the CIT (Exemptions) without a date while paragraph 9.2 gives 28 March 2025. The grounds of appeal are missing from the text at paragraph 2 — the page carries only page-break markers there. The date of the s.143(1) intimation is given as 18 November 2024 at paragraphs 4 and 9. This entry states the Rs.5 crore threshold and the s.13(10) consequence as the Tribunal records them; the current text of s.13(10) was not read from a current statutory source. 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 appeal was partly allowed for statistical purposes (paragraph 10). The issue was remitted to the Assessing Officer (Exemptions) to pass an order in accordance with law after taking into consideration the result of the condonation application pending before the CIT (Exemptions), with a reasonable opportunity of being heard (paragraph 9.2). The Tribunal recorded as its finding that this was not a case in which no audit report was filed for the year, but one in which the report was filed both belatedly and in the incorrect form (paragraph 9).
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