Form 10B/10BB Filing Issues 2023 & appeal for deferment or extension
The Summery 0f representation made by the Income Tax Bar Association, Jalandhar, to the Hon’ble Finance Minister of India regarding the challenges and difficulties faced by professionals and non-profit organizations in filing of new form.
- The Income Tax Act, India, provides tax exemptions to certain funds, institutions, trusts, universities, educational institutions, hospitals, and medical institutions that are engaged in charitable, religious, or educational activities, subject to certain conditions and compliance requirements for the form 10B/10BB.
- One of the compliance requirements is to get their accounts audited by a chartered accountant and file an audit report in Form 10B/10BB along with their income tax return in Form ITR-7.
- On February 21, 2023, the Central Board of Direct Taxes (CBDT) notified new Forms 10B/10BB with revised guidelines and formats for filing the audit report. The new forms are applicable from the assessment year 2023-24 onwards.
- The new forms require detailed information and disclosures regarding the activities, income, expenditure, assets, liabilities, foreign contributions, application of income outside India, etc., of the non-profit organizations. The new forms also mandate the use of digital signatures by both the auditor and the auditee.
Issues and difficulties with new Form 10B/10BB
The Income Tax Bar Association, Jalandhar, a prominent association of tax professionals, has made a representation to the Hon’ble Finance Minister of India on September 17, 2023, highlighting the issues and difficulties faced by them and their clients in filing the new forms. Some of the issues and difficulties are:
- The new forms are lengthy, complex, and cumbersome to fill and upload. They require a lot of data and documents that are not readily available or accessible to many non-profit organizations.
- The new forms are not user-friendly and compatible with the existing software and systems used by the auditors and the auditees. They also pose technical glitches and errors while uploading on the e-filing portal of the income tax department.
- The new forms have been notified very late in the financial year, leaving very little time for the auditors and the auditees to understand, prepare, and file them before the due date of September 30, 2023. This is especially challenging in view of the ongoing Covid-19 pandemic situation that has affected the normal functioning of many non-profit organizations.
- The new forms have increased the compliance burden and cost for both the auditors and the auditees. They also expose them to higher risk of scrutiny, penalty, and litigation in case of any omission or mistake.
Appeal for deferment or extension for the 10B/10BB form
- The Income Tax Bar Association, Jalandhar, has appealed to the Hon’ble Finance Minister of India to defer or extend the applicability of the new forms for one year till the assessment year 2024-25. They have requested that for the assessment year 2023-24, the old forms should be continued to be used.
- They have also requested that in case their appeal for deferment or extension is not accepted, at least an extension of the due dates for filing Form 10B, Form 10BB, Form 9A (for claiming exemption under section 80G), Form 10 (for accumulation or setting apart income under section 11(2)), and ITR-7 should be granted till December 31, 2023.
- They have made this appeal with utmost respect and sincerity. They have stated that their appeal is based on genuine grounds and practical difficulties faced by them and their clients. They have also stated that their appeal is in line with the government’s vision of ease of doing business and ease of compliance. They have expressed their hope that their appeal will be considered favorably by the Hon’ble Finance Minister of India.