Yuvak Pratishthan Vs ITO (ITAT Mumbai)
In Yuvak Pratishthan v. ITO (ITAT Mumbai), the Income Tax Appellate Tribunal (ITAT) Mumbai dealt with whether a charitable trust’s late filing of audit report in Form 10B could invalidate its claim for exemption when the form was submitted before completion of assessment.
The assessee, Yuvak Pratishthan, a charitable trust registered with the Charity Commissioner, Mumbai, filed its return of income for Assessment Year (AY) 2023–24 on 30 November 2023. The trust declared income of ₹2,98,66,359 from its activities and claimed exemption under Section 11 of the Income Tax Act, 1961. It also offered to tax ₹2,06,06,960 as deemed income under Section 11(3) — representing unutilised accumulation from earlier years — and paid tax under Section 115BBI at the maximum marginal rate.
While filing the return, the trust submitted its audit report in Form 10BB, believing that it was the correct form under Rule 17B of the Income Tax Rules, 1962, since its annual income did not exceed ₹5 crore and it had not received foreign contributions or applied funds outside India.
However, the Centralized Processing Centre (CPC) issued an adjustment notice under Section 143(1)(a)(ii), stating that since the trust’s total income exceeded ₹5 crore, the audit report should have been filed in Form 10B instead of Form 10BB. To comply, the assessee filed Form 10B on 16 January 2024 but inadvertently reported ₹57,21,300 as income taxable under Section 115BBI instead of ₹2,06,06,960 — the correct unutilised accumulation figure already declared in the return.
