Order under section 119 of the income tax act 1961
Circular No. 2/2024 was issued by the Central Board of Direct Taxes on 5 March 2024. Its subject is Order under section 119 of the income tax act 1961.
This grants an exemption or a relief under a provision that allows one. Read the conditions attached: an exemption notification is construed strictly, and a condition missed is the exemption lost.
Cures a form mix-up for charitable trusts and institutions for assessment year 2023-24. Trusts and institutions that furnished their audit report on or before 31 October 2023 in Form No. 10B where Form No. 10BB was applicable, or in Form No. 10BB where Form No. 10B was applicable, are allowed to furnish the report in the correct form by 31 March 2024. The condition is the one in clause (b) of the tenth proviso to clause (23C) of section 10 for the first regime and in sub-clause (ii) of clause (b) of sub-section (1) of section 12A for the second regime.
The Board found that in a number of cases trusts had filed the wrong one of the two new forms for the first year in which the new rule 16CC and rule 17B prescription applied, and since furnishing the report in the prescribed form is a condition of exemption, the mistake would have cost them the exemption.
F. No.370142/6/2024-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(TPL Division)
Sub: Order under section 119 of the Income-tax Act, 1961 - reg.
Circular No. ;2../2024
Dated osth March, 2024
Income of any fund or institution or trust or any university or other educational
institution or any hospital or other medical institution referred to in sub-clause (iv) or subclause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 (hereinafter
referred to as trust or institution under the first regime) of the Income-tax Act, 1961
(hereinafter referred to as the Act) or any trust or institution registered under section 12AA or
section 12AB of the Act (hereinafter referred to as trust or institution under the second
regime) is exempt subject to fulfilment of certain conditions specified under various sections
of the Act.
2. One of the conditions required to be fulfilled by the trust or institution in order to be
eligible to claim exemption under the first regime, is laid down in clause (b) of the tenth
proviso to clause (23C) of section 10 of the Act. This states that in case the total income of
the trust or institution, as computed under the Act without giving effect to the provisions of
exemption under the first regime, exceeds the maximum amount which is not chargeable to
income-tax in any previous year, the trust or institution is required to get its accounts audited
and furnish the audit report in the prescribed Form before the specified date.
2.1 A similar condition is in place for trust or institution under the second regime in subclause (ii) of clause (b) of sub-section (1 ) of section 12A of the Act.
3. Rule 16CC and 17B of the Income-tax Rules, 1962 (hereinafter referred to as the
Rules) prescribe the form of audit report for trust or institution under the first and second
regime respectively. They provide that the report of audit of the accounts of a trust or
institution, shall be furnisqed in -
(a) Form No. lOB where,
(i) the total income of trust or institution, exceeds rupees five crores during the
previous year; or
(ii) such trust or institution has received any foreign contribution during the
previous year; or
(iii)such trust or institution has applied any part of its income outside India during
the previous year;
(b) Form No. 10BB in other cases.
4. The new forms, Form No. lOB I Form No. lOBB, were notified vide Notification No.
7 of 2023 dated 21 st February, 2023. The above prescription was put in place w.e.f.
01.04.2023, vide the Income-tax (Third Amendment) Rules, 2023, and is therefore, effective
for assessment year 2023-24 and subsequent assessment years. The due date for furnishing
such audit reports for the A.Y. 2023-24 was 31 st October, 2023.
5. Prior to the aforesaid amendment of the Rules, the earlier prescribed form for audit
report was Form No. 10BB for trust I institution in the first regime and Form No. lOB for
trust I institution in the second regime.
6. Thus, A.Y. 2023-24 is the first year when changes described in paragraphs 3 and 4
take effect.
7. It has come to the attention of the Board that in a number of cases trusts I 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 I institutions have
furnished audit report in Form No. 10BB, where Form No. lOB was required to be furnished
for the A.Y. 2023-24.
As noted above, non-furnishing of audit report in the prescribed form would result in
denial of exemption in such cases as it is one of the conditions which is required to be
satisfied for claim of exemption.
8. 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. lOB I 10BB for the assessment
year 2023-24, on or before 31 st March, 2024.
Copy to the:
1. PSI OSD to FM! PS/OSD to MoS(F).
2. PS to the Finance Secretary.
3. Chairman and Members, CBDT.
4. Joint Secretaries/ CsIT/ Directors/ Deputy Secretaries/ Under Secretaries, CBDT.
5. C&AG ofIndia.
6. JS & Legal Adviser, Ministry of Law & Justice. New Delhi.
7. Institute of Chartered Accountants of India.
8. Web Manager, % DGIT(Systems) with request to upload on the departmental
website of incometaxindia.gov.in.
9. Pro Commissioner of Income-tax (Media & TP) and official Spokesperson, CBDT,
New Delhi.
10. JCIT, Data-Base Cell for uploading on irsofficersonline.gov.in(Sourabh Jain)
Under Secretary (TPL) - I, CBDT
When exemption is denied in an intimation under section 143(1) or in assessment for assessment year 2023-24 on the ground that the audit report was not furnished in the prescribed form.
Forms it names. Form No. 10BB
Rules it names. Rule 16CC of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.
Source: the Income Tax Department’s own published text — its page for this instrument.