05 December 2021
There is a registered society being educational institution which is registered u/s 12AA of the Income Tax Act, 1961 is running three schools whose total gross receipt is Rs.45 lacs and is having surplus of Rs.14 lacs ( the applicaiton of income is lesser than 85% of gross receipts)during the year 2020-21, is also eligible to claim exemption u/s 10(23C)(iiiad) whose accounts have been audited. Whether audit report in Form 10B or Form 10BB is required or only independent Auditor's report shall suffice to claim exemption u/s 10(23C)(iiiad). If the audit report is not in Form 10B or Form 10BB then how it shall be uploaded on ITD portal ? Kindly guide.
06 December 2021
If the institution goes for exemption u/s 11 then it would be liable to tax on Rs.7.25 lacs as the amount applied to charitable purposes is lesser than 85% whereas if it opts for exemption u/s 10(23C)(iiiad) as its gross receipts are lesser than 1 crore then there won't be any tax liability. Form 10BB is to be filed in the case of institution registered u/s 10(23C). Since the gross receipts did not exceed 1 crore the institution did not get itself registered u/s 10(23C). So in my view filing ITR claiming exemption u/s 11 would not be appropriate as it would result in tax liability whereas claiming exemption u/s 10(23C)(iiiad) would result in Zero tax. Please advise. Thanks
07 December 2021
I understand that even if the institution was registered u/s 12AA if it fulfils conditions of s. 10(23C)(iiiad) then it has the option till AY 2021-22. From AY 2022-23 however, an institution may be registered either u/s 12AB or 10(23C) and not both. Therefore, I feel that the trust though registered u/s 12AA may at its option go for exemption u/s 10(23C)(iiiad) if it satisfies the conditions. My concern is with respect to the form of Audit Report. If it claims exemption u/s 10(23C)(iiiad) then there is no prescribed for of Audit Report as Form 10B is for trust registered u/s 12A and Form 10BB is for those who are registered u/s 10(23C)(vi).