New Form 10A for registration u/s 12AB of Income-tax Act,1961 causing hardship in filing financial information
Central Board of Direct Taxes
Subject – Request for changes in the new form 10A issued for the registration of institutions under section 12AB of the Income- tax Act, 1961.
1. Central Board of Direct Tax in Income-tax (6th Amendment) Rules, 2021, issued a new form 10A for a de nova registration of institution already registered under section 12AA or under section 10(23C) of Income Tax act, 1961. The last date for submission of form 10A has been prescribed as 30th June, 2021.
2. Ongoing through the form 10A, it is noticed that various financial information have been required to be filled pertaining to different date and period which is causing hardship to submit the same at this pandemic period where almost all offices have remained closed in month of April, 2021 and also continue to be closed at present. The detail points are as under :-
2.1 In Form 10A, at row number 11 to 19, various financial information of Corpus, Funds/reserves and surplus other than corpus, Long term liabilities, Other liabilities, Land and Building and other fixed assets of the applicant, have been called for as existing ‘AS ON DATE OF APPLICATION’. The required instruction as given in the form 10A after row number 10 is as under :-
‘The details in row 11 to 19 are to be provided as on date of application (amount in rupees) :’
2.2 Your honor will appreciate that at row 11 to 19, information to various assets and liabilities have been called for, as existing as on the date of application. It means that if an institution is filing the application on 10th of May,2021 then, the institution has to prepare a balance sheet as on 10th of May, 2021. In this pandemic situation, where almost all offices are closed due to lockdown continuously after 3-03-2021, the Balance Sheet even as on 31st March, 2021 have not been finalized and prepared then how is it possible to prepare the balance sheet as on the date of filing the new Form 10A. Secondly, it will also not be out of order to mention here that, the Income -tax Act, 1961 itself has provided the time to the institutions for preparation of financial statements for year 2020-21 up to 30th September 2021. In this legal position, one cannot compel the institutions to finalize and prepare its balance sheet as on 31-03-021 and as on date filing of Form 10A up to 30th June, 2021 as been the last date of submission of form 10A.
2.3 We also draw your kind attention at row 20 of the form 10A, where it has been asked for ‘income received in three previous years immediately preceding the previous year in which application is made’. At this point also, the information of income for period 2018-2019 and 2019-2020 can be easily given as the audit has already been completed. But, so far as the year 2020-21 is concerned, the finalization of accounts and audit are still pending and in most of the cases have not been started till now because of the lockdown and pandemic situation prevailing all over India, then submission of information as pertaining to year 2020-21 will become quite cumbersome on the institutions.
3. Looking at the period of information called for and the period in which it is called for, it is suggested that the period of information required must be set to last audited period i.e. period ending on 31st March, 2020 or otherwise the date of submission of Form 10A may be extended to 31st December, 2021 so that the accurate, complete and audited information could be submitted in the form.
4. It is also suggested that, the information of assets and liabilities as existing on the date of filing of the form 10A should be delinked with the date of submission of form and should be linked with or called for the assets and liabilities as existing as at the end of the year i.e., 31st March,2020, and if the date of submission of form 10A is extended upto 31st December, 2021 then the position of assets and liabilities as existing at the end of the year i.e., 31st March,2021 should be called for, so that the information can be linked with audited financial statements. This will also provide a relief to the assessee for preparation of a balance sheet on the date of submission of the form 10A as presently required.
CA Anil Kumar Gupta
F.C.A. ,I.C.W.A., LL.B., DISA, CISA (USA)
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