CA Chunauti H. Dholakia – [2023] 154 taxmann.com 65 (Article)
Notification 07/2023 dated 21st February, 2023 issued by CBDT made drastic change in reporting format for Form 10B and 10BB. Applicability of such form has been shifted from the section under which it is registered to amount of total income of the trust. Form 10B has 49 clauses and 28 schedules, whereas Form 10BB has 32 clauses and 5 schedules. Form 10B can be divided into following parts:
| Part | Details | Clause Number in Form 10B | Clause Number in Form 10BB |
| 1 | General Information | 1-14 | 1-10 |
| 2 | Activity based information | 15-19 | – |
| 3 | Details related to certain violations | 20-24 | 11-14 |
| 4 | Donation related information | 25-27 | 15-21 |
| 5 | Details of application of income | 28-40 | 22-27 |
| 6 | Other details such as specified persons and specified violations, depreciation, deduction under section 10, transactions specified in section 269SS, 269ST, 269T and details related to TDS. | 41-49 | 28-32 |
Some clauses requires to report details, which cannot be obtained directly from the books of accounts. Some details can be reported after reconciling details from books with other forms and documents. Hence it is necessary for the auditor to be very conscious at the time of auditing and reporting the details. Do’s and don’ts for the trust audit in Form 10B and 10BB are as under:
Do’s for Form 10B and 10BB
- As mandated by SA-700 issued by ICAI, audit report should contain paragraph on auditor’s responsibility and management’s responsibility. These paragraphs are not included in specified format of audit report in Form 10B and 10BB. Hence such paragraph should be included by way of a note and it should form part of the audit report.
- Form 10B and 10BB requires to specify that particulars given in the Annexure (Statement of particulars) are “true and correct” subject to certain observations or qualifications. Some details to be reported in Form 10B and 10BB cannot be obtained directly from books of account. The auditor has to verify such details based on information/explanations obtained from the trust. For such details, certificate/undertaking should be obtained from trustees/ authorized persons of the trust about correctness of such details given to the auditor.
- The auditor should verify details of registration of trust with Form 10AC issued to the trust. It should be ensured that the registration under section 12AB or section 80G has not been cancelled or surrendered during the year. It should also be ensured that application for regular registration has been filed within the due date specified under the Act and has not been rejected by the Department.
- Before preparation of Form 10B and 10BB, the auditor should reconcile details of books of accounts with details of Form 10BD, Form 26AS, AIS, TIS, Form 9A and Form 10 filed by the trust. It is also necessary to ensure that all such forms are filed by the trust within its specified due date.
- Form 10B contains clauses for activity based reporting. Hence the auditor should verify whether the trust has conducted activity which is in the nature of “advancement of any other object of general public utility”? If it is, it should be ensured that there is no violation to provisions of section 2(15) of the Act.
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