Form 10B or Form 10BB for Charitable and Religious Institutions: Selection, Filing and Condonation of Delay

This article explains how a charitable or religious institution decides whether an audit report is needed, which of Form 10B or Form 10BB applies under Rules 16CC and 17B, how the report is filed, what follows from late or wrong filing, and how delay can be condoned under CBDT Circular No. 16/2024.

The consequence of error is loss of exemption for the year, with recomputation, a reduced refund, demand and interest following the processing of the return in ITR 7. Because the choice of form turns on facts that sit outside the financial statements, the point needs to be settled before the audit is signed.

Step one: is an audit report required

Registration under Section 12AB does not by itself require Form 10B or 10BB every year. The requirement under Section 12A(1)(b) arises where the total income of the trust or institution, computed without giving effect to Section 11 and Section 12, exceeds the maximum amount not chargeable to income tax.

A comparable condition applies to funds, institutions, universities, educational institutions, hospitals and medical institutions that hold approval under the sub-clauses of Section 10(23C), principally sub-clauses (iv), (v), (vi) and (via). Institutions that enjoy automatic exemption under sub-clause (iiiad) or (iiiae), subject to their own conditions, should not be brought within these forms merely because Section 10(23C) appears in the return.

Step two: which form applies

Rules 16CC and 17B prescribe the form. Form 10B is the comprehensive report and Form 10BB the shorter one. Form 10B applies if any one of the following is true for the previous year: