Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, May 21, 2019

Subject: Amendment of Form No 10B of the Income-tax Rules, 1962- Draft notification for inputs from stakeholders and the general public - reg.

Section 12A of the Income-tax Act, 1961 (the Act) provides for conditions for applicability of sections 11 and 12 of the Act. One such condition under clause (b) of sub-section (1) thereof is that where the total income of the trust or institution computed  without giving effect to section 11 and 12 exceeds the maximum amount not chargeable to income-tax in any previous year, its accounts for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288.

1.1  It further provides that the person in receipt of said income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth  such particulars as may be prescribed.

2.  Accordingly, vide Income-tax (2nd Amendment) Rules, 1973 wef April 1, 1973 rule 17B and Form 10B were inserted to the Income-tax Rules, 1962 (the Rules) for this purpose.  Rule 17B of the Rules provide that said report of audit of the accounts of a trust or institution shall be in Form No 10B. The Form No 10B besides providing the Audit Report provides for filing of "Statement of particulars" as Annexure.

3.  As the rule and form were notified long ago, there is a need to rationalise them to align with the requirements of the present times.

4.  In view of the above, the rule and form are proposed to be amended by way of substituting,-

(a)  Rule 17B with a new rule 17B; and

(b)  Form No 10B with a new Form No 10B.

5.  The draft notification proposing the above amendments is enclosed and it is requested from the stakeholders and general public to provide inputs electronically at the email address, [email protected], latest by June 5, 2019.

Encl : As above. 

(Niraj Kumar)

Joint Commissioner of Income-tax (OSD) (TPL)-I

Tel No: 011-2309 5468

E-mail: [email protected]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

NOTIFICATION

New Delhi, May ….., 2019

INCOME-TAX

SO (E). …… In exercise of the powers conferred by the first proviso to clause (b) of sub-section (1) of section 12A read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend theIncome-tax Rules, 1962, namely:___

1. (1) These rules may be called the Income-tax (….th Amendment) Rules, 2019.

    (2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules), for ‘rules 17B’, the following rule shall be substituted, namely:___

“Report of audit of accounts and the particulars to be furnished under clause (b) of sub-section (1) of section 12A.

17B. The report of audit of the accounts of the trust or institution and the particulars required to be furnished under clause (b) of sub-section (1) of section 12A, shall be in Form No. 10B.”.

3. In the principal rules, in Appendix II,-

(i) for 'Form No 10B', the following Form shall be substituted, namely:___

“FORM No. 10B

(See rule 17B)

Audit Report to be furnished under clause (b) of sub-section (1) of section 12A of the Income-tax Act, 1961

1. *I/ we have examined the *statement of affairs/ balance sheet as on, ……………………, and the *income and expenditure/ profit and loss account for the period beginning from…………………..… to ending on …………………………………., attached herewith, of…………………… (Name), …………………………………….………………… (Address), ……………..…………………(Permanent Account Number).

2. *I/ we certify that the *statement of affairs/ balance sheet and the * income and expenditure/ profit and loss account are in agreement with the books of account maintainedat the head office at ……………………and ** ……………………branches.

3. (a) *I/ we report the following observations/ comments/ discrepancies/ inconsistencies; if any:

(b) Subject to above, -

(A) *I/ we have obtained all the information and explanations which, to the best of *my/ our knowledge and belief, were necessary for the purpose of the audit.

(B) In *my/ our opinion, proper books of account have been kept by the head office and branches of the trust or institution so far as appears from *my/ our examination of thebooks.

(C) In *my/ our opinion and to the best of *my/ our information and according to the explanations given to *me/ us, the said accounts, read with notes thereon, if any, givea true and fair view:-

(i) in the case of the *state of the affairs/ balance sheet, of the trust or institution as at 31st March; and

(ii) in the case of the * income and expenditure/ profit and loss account account of the *profit/ loss or *surplus/ deficit of the trust or institution for the year ended on that date.

4. The statement of particulars required to be furnished is enclosed as Annexure.

5. In *my/ our opinion and to the best of *my/ our information and according to explanations given to *me/ us, the particulars given in the said Annexure are true and correct subject tofollowing observations/ qualifications, if any:

a. ……………………………………………………………………………………

b. ……………………………………………………………………………………

c. ……………………………………………………………………………………

Place: ……………

Date: ……………

 

 

***(Signature and stamp/Seal of the signatory)

Name of the signatory …………………………….

Membership No. ……………………………………….

Full address ……………………………

Notes:

1. *Delete whichever is not applicable.

2. **Mention the total number of branches.

3. ***This report has to be signed by person eligible to sign the report as per the provisions of section 12A of the Income-tax Act, 1961.

4. The person, who signs this audit report, shall indicate reference of his membership number/ certificate of practice number/ authority under which he is entitled to sign this report.

[Notification No. /2019/ F No 370142/6/2019-TPL]

(Rajesh Kumar Kedia)

Director (Tax Policy and Legislation Division)

Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number SO 969 (E) dated the 26th March, 1962 and were last amended vide notification number .…, dated …..th May, 2019.

Amendment of Form 10B: revised audit report and detailed annexure requirements for trusts' tax compliance and reporting. The draft substitutes rule 17B to require the audit report and particulars under clause (b) of sub section (1) of section 12A to be furnished in a reissued Form No. 10B. The Form prescribes an auditor's certification identifying the accounts examined, agreement with books, space for observations, and an opinion that books are properly kept and accounts give a true and fair view, and it mandates an Annexure of detailed particulars on registration, receipts, application of income, investments, business activities, related party/specifed person transactions, loans/deposits, and tax deduction/collection compliance.