172. Audit report in Form No. 10B in terms of rule 17B – Auditor can accept as a correct list of specified persons as given by managing trustee while filing report
1. Under section 12A(b ), in the cases of charitable and religious trusts or institutions whose total income, without giving effect to the provisions of sections 11 and 12, exceeds 25,000 rupees in any previous year, the accounts of the trust or institution should have been audited by an accountant as defined in the Explanation below section 288(2) and the person in receipt of the income should furnish, along with the return of income for the relevant assessment year, the report of such audit in the prescribed form duly signed and verified by such authority and setting forth such particulars as may be prescribed. Rule 17B of the Income-tax Rules, 1962 lays down that the report of audit of accounts of the trust of the institution should be in Form No. 10B. The Annexure to Form No. 10B requires the auditor to certify, inter alia, as to the non-application or non-user of the income or property for the benefit of persons referred to in section 13(3).
2. The Board have considered a representation that while filing Form No. 10B and its annexure an auditor can accept as correct the list of persons covered by section 13(3), as given by the managing trustees, etc. The Board agree that an auditor can accept as correct the list of specified persons, till given further instructions, by the managing trustees and base their report on the strength of this certificate.
Circular : No. 143 [F. No. 180/74/73-IT(A-I)], dated 20-8-1974.