Trust return filing in case 10B filed & ITR not filed

12A registered trust has not filed income tax return for A.Y. 2022-23 within due date.

Trust has income of Interest and donation of Rs. 65,000/- and received corpus donation of Rs. 47,00,000/- and admin Exp of Rs. 88,000/-.

Trust has filed form 10B in time uploading the balance sheet & Income and expenditure account which reflects Receipt of Corpus donation of Rs. 47,00,000/- during the Year

What is the taxability for non filing of ITR in time??

What is the Remedy?

I am reproducing Section 139(4A) for ready reference

(4A) ²⁸Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).

In my view above section refers to total income and total income as per section 11(1)(d) Excludes Corpus Donation, and total income is only Rs. 65,000/- the trust does not require to file the return even though 10B is filed.

Income from property held for charitable or religious purposes.

⁶³11. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income—

(d) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution ⁶⁴[,subject to the condition that such voluntary contributions are invested or deposited in one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus].

Hey Krunal,

You've presented a classic situation with a 12A registered trust that has:

Not filed ITR for AY 2022-23 within due date
Filed Form 10B on time, uploading balance sheet & I&E showing corpus donation of ₹47 lakhs
Income (interest + donation) of ₹65,000
Admin expenses of ₹88,000

Key Points and Analysis:

Section 139(4A) Requirement for Filing ITR:
It mandates that a person (trust here) receiving income from property held under trust for charitable/religious purposes must file an ITR if total income (computed without sections 11 and 12) exceeds basic exemption limit.
Computation of Total Income for Filing:

Corpus donations do not count as income for tax computation under Section 11(1)(d).
Therefore, corpus donation of ₹47,00,000 is excluded from total income computation.
Income relevant for filing is interest + donation = ₹65,000 only.

Does Trust Need to File ITR?

Since ₹65,000 is the total income excluding corpus, if it is below the basic exemption limit (usually ₹2.5 lakh for individuals/assessee other than company), trust may not be legally required to file ITR under 139(4A).
But trust has filed 10B (audit report) which requires ITR filing, as Form 10B is linked to audit under Section 12A(b).

Taxability & Penalty for Non-Filing of ITR:

No tax liability arises if income is below exemption limit after considering 11(1)(d).
However, non-filing of ITR can attract penalty under Section 234F and late fees under Section 271F.
Additionally, since Form 10B is filed, ITR should ideally have been filed; mismatch can cause notices or scrutiny.

Remedy:

File the belated ITR as soon as possible (within the prescribed time frame for belated return, typically up to one year from end of relevant AY).
Attach or cross-reference Form 10B already filed.
This reduces risk of penalty and regularizes compliance.
Explain in the return or a letter if needed that corpus donations are excluded for income calculation.

Summary:

Aspect	Your Case	Outcome
Total Income (excl corpus)	₹65,000	Below exemption limit (₹2.5 lakh)
Filing Requirement under 139(4A)	No (since below exemption)	Trust technically not required to file ITR
Form 10B filing	Filed on time	Audit report submitted
Non-filing of ITR timely	Yes	Risk of penalty but no tax liability
Remedy	File belated ITR ASAP	Regularizes position, avoids penalty and issues