Income Tax of AOP & Auditor

This query is : Resolved

rupesh (Querist)
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19 September 2020 Hello, will be grateful for following informations:
I am having case of AOP. It is registered under Bombay Trust Act.
This AOP is running 1 school. and needs to prepare Balance sheet and file ITR.
Now my query is -
1. Who can be auditor of AOP (Association of Person) (Sanstha)?
2. for filing ITR of AOP should we need to file any FORM before/after filing ITR?
3. Should income of AOP be shown under Business Income? and should we file Balance Sheet & Profit and Loss in ITR?

Thanks in anticipation.

CA PARTH SHAH

CA PARTH SHAH (Expert)
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20 September 2020 You have not mentioned whethet the school has taken registration under 12A of the Income tax act. If not taken, then answers to your queries are as under:

1) Auditor can be appointed as per discretion of the AOP.
2) Form 3CB to be filed by the auditor before filing ITR.
3) AOP has to show its income as Business Income and file Profit Loss & Balance sheet in ITR 5

If registration is taken under section 12A of the Income tax act, then answers to your query is as follows:

1) Auditor can be appointed as per discretion of the AOP.
2) Form 10B to be filed by the auditor before filing ITR 7.
3) AOP shall be treated as charitable trust and it has to mention whether they re operating the school as business or not and accordingly Profit & Loss and Balance sheet has to be filed in ITR 7.

rupesh

rupesh (Querist)
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21 September 2020 Dear Sir, AOP is not registered under 12A.
AOP has elected its Auditor (he is not CA but approved by SG for the audit of Trust) who is preparing its Balance Sheet {(under Sch. VIII (vide Rule 17(1) of Bombay Public Trust Act) and Income and Exp Acc and also Statement u/Schedule IX C (rule 32) }

Now, AOP (Trust) wants me to file the Income Tax Return.
The SURPLUS of trust is within Rs. 500,000/-
So, should I also need to carry the Audit of Trust and file Form 3CB mandatority?
OR Should i simply file the Income Tax Return without filing Form 3CB.

Please clarify.

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CA PARTH SHAH

CA PARTH SHAH (Expert)
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12 October 2020 Audit applicability depends on the income of the trust and not surplus.

If the income of the trust is above limit of mentioned in 44AB, then 3CB needs to be filed along with ITR-5.
Although BS & IE account is prepared under Bombay Trust Act , you will have to make normal BS & IE Account for ITR -5.