Condonation of Delay in Filing Key Tax Forms for NPOs & Corporates

The issue is no more res-integra that there cannot be a denial of benefit of sections 11 & 12 incase the assessee merely fails to file form no. 10B before the due date of filing the return of income, after multifarious Court judgements including High Courts and co-ordinate benches of ITATs. Hence, The CBDT issued Circular No. 16/2024 on 18.11.2024 u/s 119(2)(b) of the Income Tax Act to accept applications for condonation of delay in filing Form 9A/10/10B/10BB for Assessment Year 2018-19 and subsequent A.Y. This circular supersedes all prior instructions/circulars/guidelines issued by CBDT in this context.

Applications for delays for any period of time will be accepted. Pr. CsIT & CsIT can admit applications for delays of up to 365 days; while Pr. CCsIT, CCsIT and DGsIT are authorized to deal with applications for delays beyond 365 days.

Applications must show a reasonable cause for delay, and the applicant should demonstrate genuine hardship. For Example, incase any medical issue is there, then a medical certificate should be available. Incase any technical glitch is there, then a screenshot should be available. For Form 10, authorities will also verify that the funds have been invested in specified modes under section 11(5) of the Act.

Timelines need to be adhered to in as much as that applications will not be entertained beyond 3 years from the end of the relevant assessment year. However, this time limit for filing of such application within 3 years from the end of the assessment year will be applicable for application filed on or after the date of issue of this Circular. Hence, cases related AY 2018-19 to AY 2020-21 are not affected due to this provision, if application is already filed and pending for disposal.

Applications should be disposed of, as far as possible, within 6 months from the end of the month in which such application received by the Competent Authority.

Forms 9A, 10, 10B, and 10BB are crucial filings for charitable and religious trusts, as well as educational and medical institutions, to claim tax exemptions under the Income Tax Act.

• Form 9A: This form is used by trusts or institutions to exercise the option to apply income in the subsequent year, in cases where 85% of the income couldn't be applied during the previous year.
• Form 10: Trusts or institutions use this form to accumulate income for specific purposes, detailing the amount and period of accumulation.
• Form 10B: This is the audit report required under section 12A(b) of the Income-tax Act, 1961 certifying that the accounts of the trust or institution have been audited.
• Form 10BB: Similar to Form 10B, this form is the audit report for educational or medical institutions claiming exemption under sections 10(23C)(iv), (v), (vi), or (via).

The CBDT issued another similar Circular No. 17/2024 on 18.11.2024 u/s 119(2)(b) of Income Tax Act to accept applications for condonation of delay in filing Form 10-IC for the 22% tax rate and Form 10-ID for 15% tax rate u/s 115BAA and 115BAB.

In 2019, the CBDT significantly reduced corporate tax rates. Domestic companies have an option to apply a reduced corporate income tax rate of 22%, while new domestic manufacturing companies incorporated on or after 1 October 2019, that commence manufacturing or production by 31 March 2024 could apply corporate income tax rate of 15%. To avail these income tax rates, taxpayers must meet specified conditions, declare the choice in their tax return, and file the prescribed forms viz. Form 10-IC for the 22% rate and Form 10-ID for the 15% rate, within the due date of filing the return.

The following conditions should be satisfied while deciding on such applications: -

(i) The return of income for the relevant assessment year has been filed on or before the due date specified under section 139(1) of the Act;

(ii) The assessee has opted for taxation, u/s 115BAA of the Act in case the condonation of delay is for Form No. IO-IC and u/s I 15BAB of the Act in case condonation of delay is for Form No. 10-ID, in "Filing Status" in "Part A-GEN" of the Form of Return of Income ITR-6; and

(iii) The assessee was prevented by reasonable cause from filing such Form before the expiry of the time allowed and the case is of genuine hardship on merits."

The conditions of the category of officers condoning the delay as well as timelines are the same as Circular 16/2024.