Question ID : 29587

Unregistered Society

Query A Trust Society is Registered under Trust Society Act, respectively. There Receipts are Rs.4 Lac and Expenses are Rs.3.50 Lacs, i.e. Net Profit of Rs.50000-. The Return of Income was filed in ITR 7, showing Income Under ‘Income from Other Sources” as Net Income of Rs.50000- (400000-350000). But CPC has not given Basic exemption of Rs.250000-, rather it has taxed on the whole amount of Total Receipts of Rs.400000- @ 30. Queries 1. If the Trust Society is Registered under its Act but not having Registration us12A of the Act, its Income should be shown under which Head of Income and How? 2. In the above situation Audit Report in Form 10B is applicable or not ?

Answer ID : 65529

1. Income from business. 2. 10B is not applicable. Ps - ITR 5 has to be filed.

Answer ID : 65530

ITR 5 to be filed. 10B not required. ITR 7 applicable only when trust is registered. If not then tax should be paid on gross receipts.

Answer ID : 65539

For claiming exemption under section 11 and 12 of income tax Act, 1961 charitable or religious trust or institution shall mandatory have to get their accounts audited if the total income without giving effects to provisions of section 11 and 12 exceed maximum amount not chargeable to tax and shall obtain audit report in form 10B. So if a charitable and religious trust or institution is not registered under section 12A and hence not eligible to claim exemption under section 11 and 12 of the Act is not supposed to obtain audit report in form 10B. Even if such institution is getting its account audited from a Chartered Accountant by virtue of requirements contained in its governing statue, the audit report shall not be in form 10B. Instead the audit report issued in such circumstances shall be in format set out in SA-700 issued by ICAI. This is so because Form no 10B is a statutory format as like form 3CB-3CD and hence should be utilized for specified purposes only. Statutory forms are for the purpose designated and should not be used universally. if society Trust is registered under the respective Act but not registered under section 12A of the Act, its income should be shown under the head business profession.

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