Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 10B for Assessment Year 2018-19 and subsequent years–Circular No. 2/2020-Income Tax Dated 3rd January, 2020.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, the 3 January, 2020
Under the provision of section 12A of Income Tax Act, 1961 (hereafter ‘Act’) where the total income of a trust or institution as computed under the Act without giving effect to the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income tax in any previous year, the accounts of the trust or institution for that year have to be audited by any accountant as defined in the Explanation below sub section (2) of section 288 and the person in receipt of the income is required to furnish along with the return of income for the relevant assessment year the report of such audit in the prescribed from duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
2. As per Rule 17B of the Income-tax Rules, 1962 (hereafter ‘Rules’) the audit report of the accounts of such a trust or institution is to be furnished in Form No. 10B. As per Rule 12(2) of the Rules, such audit report is to be furnished electronically. The failure to furnish such report in the prescribed from along with the return of income results in disentitlement of the trust or institution from claiming exemption under sections 11 and 12 of the Act.
3. Representations have been received by the Board/field authorities stating that Form no. 10B could not be filed along with the return of income for AY. 2016-17 and AY 2017-18. It has been requested that the delay in filing of Form No. 10B may be condoned. Previously, vide instruction in F.No. 267/482/77-IT(part) dated 09.02.1978, the CBDT had authorized the ITO to accept a belated audit report after recording reasons in cases where some delay has occurred for reasons beyond the control of the assessee.
4. Accordingly, the CBDT issued circular No. 10/2019 circulated through F.No. 197/55/2018-ITA-1 in supersession of earlier circular/Instruction issued in this regard, and with a view to expedite the disposal of applications filed by such trust or institution for condoning the delay in filing Form No. 10B and in the exercise of the powers conferred under section 119(2) of the Act, the Central Board of Direct. Taxes vide Circular No. 10/ 2019 dated 22rd May, 2019 and Circular No. 28/2019 dated 27th September, 2019 both issued vide F.No.197/55/2018-ITA-I has directed that :-
(i) The delay in filing of Form no. 10B for A.Y. 2016-17 and AY. 2017-18, in all such cases where the Audit Report for the previous year has been obtained before the filing of return of income and has been furnished subsequent to the filing of the return of income but before the date specified under section 139 of the Act is condoned.
(ii) In all other cases of belated applications in filing Form No. 1013 for years prior to AY. 2018-19, The commissioner of Income-Tax arc authorized to admit and dispose off by 31.03.2020 such applications for condonation of delay u/s 119(2)(b) of the Act. The Commissioner will while entertaining such belated applications in filing Form No. 1013 shall satisfy themselves that the assessee was prevented by reasonable cause from filing such application within the stipulated time.
5. In addition to the above, it has also been decided by the CBDT that where there is delay of upto 365 days in filing Form No. 10B for Assessment Year 2018-19 or for any subsequent Assessment Years, the Commissioners of Income-tax are hereby authorized to admit such belated applications of condonation of delay u/s 119(2) of the Act and decide on merits.
6. The Commissioners of Income-tax shall, while entertaining such belated applications in filing Form No. 1013, satisfy themselves that the assessee was prevented by reasonable cause from filing such application within the stipulated time.
(Gulzar Ahmad Wani)
Under Secretary (ITA-I)
1. PS to FM/OSD to FM/PS to MoS(R)/OSD to MoS(R)
2. PPS to Secretary(Finance)/(Revenue)
3. The Chairman, Members and all other officers in CBDT of the rank of Under Secretary and above.
4. All Pr. Chief Commissioners/Pr. Director General of Income-tax/Chief Commissioners of Income-tax (Exemptions) with a request to circulate amongst all officers in their regions/charges.
5. Pr. DGIT(Systems)
6. The CIT(M&TP), CBDT and the Official Spokesperson of CBDT
7. The Additional Director General (PR & PP), New Delhi.
8. ITCC Division of CBDT.
9. Data Base Cell — for placing it on www.irsofficersonline.gov.in
10. The DIT (S)-4/Web Manager for placing it www.incometaxindia.gov.in
11. The Guard File.
(Gulzar Ahmad Wani)
Under Secretary (ITA-I)