CA Association represents issues faced by CAs for delayed availability of Form 10B and 10BB

The Karnataka State Chartered Accountant Association(KSCAA) has made representation before Chairperson of CBDT regarding issues faced by CAs around the delayed availability of Form 10B and 10BB.

The Karnataka State Chartered Accountants Association (R) (in short ‘KSCAA’) is an association of Chartered Accountants, registered under the Karnataka Societies Registration Act, in the year 19 5 7. KS CAA is primarily formed for the welfare of Chartered Accountants and represents before various regulatory authorities to resolve the professional problems faced by Chartered Accountants and the business community.

In the past, we have written to your good selves many times populating various issues, challenges and hardships being faced by taxpayers and Chartered Accountants and suggesting possible solutions on the same. Herein, we are presenting before your good selves for your kind consideration, issues regarding the delayed availability /release of income tax forms 10B/108B for the Financial Year 2022-23 and insertion of several new clauses which is causing hardship to the Taxpayers and Chartered Accountants.

Provisions applicable:

Sections 10(23C) and 12A of the Income Tax Act, 1961 require certain funds, trusts, institutions, universities, other educational institutions, hospitals and other medical institutions to get their books audited. The forms prescribed under rules 16CC and 17B of the Income Tax Rules, 1962 for this purpose are Form 10B and Form 10BB.

1. Audit Report in Form 10B is required to be filed if any one or more circumstance exists:

i. The total income of the trust/institution [whether registered under 12AB or 10(23C)] exceeds Rupees Five crore without giving the effect of Section 11, 12 & 10(23C) during the previous year.

ii. The organisation receives any foreign contribution (even if the income is below Rupees Five crore) during the previous year

iii. The income of the trust or institution is applied outside India even if the income is below Rupees Five crore and the organisation has not received any foreign contribution) during the previous year.

2. Trusts or institutions registered under Section 12AB or under Section 10(23C) not falling under any of the above-mentioned criteria must file audit report in Form 108B.

These forms are to be submitted by 30th September, failing which these trusts, institutions etc. are denied tax exemptions/benefits available under section 10(23C) and Section 11 and 12.

Details of few of the Challenges faced:

1. Late release of utilities for filing the Form 10B/10BB:

Form 10B/108B have been introduced vide notification No. 7 /2023 dated 21 February 2023. We wish to bring to your kind attention that the utilities required to file the above-mentioned forms have been made available/released in the Income Tax Portal on 24th August 2023. Your good selves may be aware that conducting an audit of trusts, institutions etc. is a time-consuming process and is considered complete when the forms mentioned above are filed with the Income Tax Department.

Since the utilities have been released recently, it is quite challenging for the Chartered Accountant Community as well as the assessees, to prepare and furnish the audit report within such short span of time. This is further challenging as both Forms (Form 10B and Form 108B) have been changed/newly introduced for the current assessment year to include a lot more disclosures as compared to earlier years. This audit procedure requires a considerable amount of time, which is not available with the Stakeholders and the Professionals as the due date is approaching fast.

2. Comprehensive and Vast Form

The erstwhile Form 10B was a small, plain and simple form requiring minimal disclosures. Whereas the new Form 10BB requires reporting on 32 clauses along with numerous sub-clauses and further reporting under 7 various schedules. Form 10B requires reporting on 49 clauses along with numerous sub-clauses and further reporting under 29 various schedules, in addition to providing General information about the Organisation. The form is a detailed and lengthy form, requiring identifying, analyzing, compiling and reporting voluminous data. Such detailed and colossal reporting warrants lots of time and resources at the disposal of both the Auditor and the Organisation. Time is a critical factor in this respect, as very little time is available for amassing and reporting the required details.

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