New Process for Condonation of Delay in Filing Forms 9A, 10, 10B and 10BB: Key Highlights of Circular 16/2024

In certain instances, due to unforeseen circumstances, the assessee or auditor may file the audit report for the trust in Forms 9A, 10, 10B, or 10BB after the due date. As a result, it has become a common practice for the Income Tax Department to treat the receipt amount as income of the trust and levy tax on it. This can lead to significant financial challenges for the assessee, as a minor error or delay in filing may result in substantial tax demands on the Income Tax portal.

This issue presents the assessee with two possible courses of action:

1. File an appeal with the Commissioner of Income Tax (Appeals) [CIT(A)].

2. Submit a request for condonation of delay in filing the form.

In my view, the first document addresses the condonation of delay in the submission of forms. This article examines the delay in filing Forms 9, 10, 10B, and 10BB. It takes into account the circular issued by the CBDT as well as my prior experience in handling requests for condonation of delay.

Forms Included

• 9A: This form is to apply for the option given under Section 11(1), applicable for income for charitable or religious purposes.
• 10: This form is the statement of total collected income under Section 11(2).
• 10B: This form is for audit reports under Section 12A(b) for charitable/religious trusts.
• 10BB: This form is for audit reports for institutions demanding exemption under Section 10(23C).

The CBDT issued Circular No. 16/2024 dated 18th November 2024, which addresses the delay in filing Forms 9A, 10, 10B, and 10BB.

If you intend to file an application after 18th November 2024, it is crucial to understand the time limits for submitting a request for condonation of delay. The application for condonation must be submitted within three years from the end of the assessment year (AY) for which the request is made. For example, if you are applying for condonation of delay for AY 2022-23 (i.e., FY 2021-22), the application must be filed by the end of AY 2025-26.

Competent Authority

In points 1.1 and 1.2, the CBDT clarifies that for AY 2018-19 and subsequent years, as well as in point 4, it is specified that requests for condonation of delay under Section 119(2)(b) pending as of 18th November 2024 will be subject to the same guidelines outlined in points 1.1 and 1.2. This means that if you are filing an application after 18th November 2024, or if your application is pending as of that date, the competent authority responsible for handling your request will be the individual designated below.

Points to Remember While Filing the Application / Documents to Be Submitted with the Application

1. Identify and establish strong grounds for the delay in filing the form, and prepare the necessary supporting documents.

2. Include any court judgments in favor of the assessee or relevant government notifications that justify the condonation of the delay. For example, during the COVID-19 period, the Supreme Court provided relief by condoning delays for a specified duration. Such judgments provide substantial support for the application.

3. Prepare a written submission, which should be submitted alongside the application to the competent authority.

4. Ensure that the relevant forms, along with the acknowledgment of same forms, are included in the submission.

Procedure for Filing

Before submitting any documents, it is important to ensure that the PAN is transferred to the Exemption Wing of the Income Tax Department. To do this, you must file the relevant form to request the transfer of the PAN to the Exemption Wing.

Once the PAN has been transferred, gather all required documents and send them to the competent authority via email. Additionally, I recommend submitting a hard copy of the same set of documents in person to the respective officer in the CIT(E) Wing of the Income Tax Department. During this process, explain the case to the officer. If the officer requires any additional documents, ensure that they are provided both via email and in hard copy.

Time Limit for Completion of Application

The application must be disposed of within six months from the end of the month in which it is received by the competent authority. For example, if the application is submitted in December 2024, the six-month period will be calculated from January 2025, meaning the competent authority must resolve the application by June 2025. The competent authority, as previously discussed, is determined based on the duration of the delay. In practice it is seen that department normally not disposing its application with in Six months which is a matter of concern.

The author can also be reached at varunmukeshgupta96@gmail.com