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CHAMBER OF TAX

CONSULTANTS

TAX AUDIT UNDER SECTION 44AB OF THE INCOME TAX ACT 1961

10/09/2015 Compiled by CA Avinash Rawani 1

HIGHLIGHTS OF DISCUSSION

AN OVERVIEW OF SEC 44AB

ETHICAL ISSUES

AUDIT REPORT IN FORM NO 3CA &

3CB

ISSUES ARISING FROM CERTIFICATION OF PARTICULARS IN

FORM NO 3CD.

ELECTRONIC UPLOADING OF AUDIT REPORT.

JUDICIAL PRONOUNCEMENTS

GENERAL ISSUES


Provisions of Section 44AB of theIncome Tax Act.

A proper audit for tax purposes would ensure thatthe books of accounts and other records are properlymaintained, that they faithfully reflect the income ofthe tax payer and claims for deduction are correctlymade by him.

To reflect true income

To facilitate the tax administration

Will save time of the Tax Officer. The time of theassessing officer thus saved, could be utilized forattending to more important investigational aspectsof a case.


Challenges in Tax Audit 31.03.2015 Applicability of Various Auditing Standards E-filing of Tax Audit Report Various Changes in Finance Budget in Last Few Years

e.g. Amendment Vodafone AIR(Annual Information Returns)exposing various

information about various assessees Various Changes in Income Tax Returns due to

amendment in Rules Based on above, ICAI has also amended Guidance Note

in July 2013 Practical Issues like Balance Confirmation, Hawala, Sec

14A etc


Categories of Persons covered

• Turnover Criteria

– Businessmen's;

– Professionals

• Presumptive Taxassesses declaringlower profits;

• Profit Reporting Criteriafrom 1.4.2011 underSection 44AB(2);


WHO SHOULD GET THEIR BOOKS OF ACCOUNTS AUDITED U/S 44AB?

Sales / Gross Turnover or

Gross Receipts exceed

UptoA.Y 2010-11

A.Y 2011-12&

A.Y 2012-13

A.Y 2013-14& Onwards

Business Rs 40 Lacs Rs 60 Lacs Rs 1 Crore

Profession Rs 10 Lacs Rs 15 Lacs Rs 25 Lacs


•Audit u/s 44AB is necessary where assessee claims profits from Businessis less than 8%, where Sec 44 AD is applicable.•Audit u/s 44AB is necessary where assessee claims profits is lower thanspecified U/s 44AE, 44BB or 44BBB.

IS THE DATA KEPT IN ELECTRONIC FORMAT CONSIDERED AS BOOKS OF ACCOUNTS?

• Section 4 of the Information Technology Act, 2000 statesthat “Where any law provides that information or anyother matter shall be in writing or in the typewritten orprinted form, then, notwithstanding anything containedin such law, such requirement shall be deemed to havebeen satisfied if such information or matter is-

• (i) rendered or made available in an electronic form;and

• (ii) accessible so as to be usable for a subsequentreference.”


CLAUSE 17(e) - Penalty

To be distinguished from contractual obligations-even if such payments are labeled as ‘penalty’ in acontract.

A Penalty for violation of law needs to be reportedunder this clause, even if the violation has arisen inthe course of trading operations

Where the penalty or fine is in the nature of penalty or fine only, the entire amount thereof will have to be stated.

If the impost is purely compensatory in nature,-not to be reported


Clause 17(f)- Amounts inadmissible U/s 40(a) & 40(a)(ia)

• Any Interet, commission, rent, royalty,professional fees, or amounts payable to acontractor, payable to a Resident on whichTDS is deductible & such TDS is not deductedor TDS deducted but not paid on or beforethe due date of filing the Return of Income,then expenditure will be dis-allowed.

• On payment of TDS expenditure will beallowed as deduction in subsequent year.


Changes in Finance Act 2012- Deductee files ROI

Clause 17(g)- Interest, salary, bonus commission or remuneration Inadmissible

U/s 40(b)/40(ba)

• Salary, bonus, commission or remuneration or interest are not admissible, unless the following conditions are satisfied:

• (a) Remuneration is paid to working partner(s).• (b) Remuneration or int is authorised by the

deed and is in accordance with the deed.• (c) Remuneration or interest does not pertain to

a period prior to the date of deed.• (d) Interest not more than 12% p.a.


Clause 17(l)- Expenses inadmissible in terms of

sec 14A- incurred in relation to exempt income

• Section 14A was inserted in Chapter IV – Computation of totalincome by the Finance Act, 2001 with retrospective effect from1.4.1962 i.e. A.Y. 1962-63.

• Sub-rule (1) of Rule 8D provides that having regard to the accountsof the assessee of a previous year, if the Assessing Officer is notsatisfied with the correctness of the claim of expenditure made bythe assessee or with the claim made by the assessee that noexpenditure has been incurred, in relation to income which doesnot form part of the total income under the Act for such previousyear, he shall determine the amount of such inadmissibleexpenditure in accordance with the method of computation laiddown in sub-rule (2) of Rule 8D.


Commissioner of Income Tax vs. Winsome Textile Industries Ltd. (2009) 319 ITR 204 (P&H)

• Even if deduction U/s 36(1)(iii) is ordinarily available in respect ofborrowed funds utilized for the purpose of business Sec14A carves out anexception insofar as any expenditure which is relatable to the earning ofdividend income not subject to tax is to be disallowed.

• It is to be ascertained as to whether the assessee has made theinvestment in purchase of shares out of borrowed funds or invested itsown funds. If the assessee has invested its own money in the purchase ofshares then there is no question of any disallowance in respect of intereston borrowed funds under s. 14A. However, if the borrowed funds havebeen utilised for purchase of shares of M/s Winsome Yarns Ltd.,disallowance U/s14A shall have to be calculated even when investmenthas been made in the course of business of the assessee and the assesseequalifies for deduction U/s 36(1)(iii).

• Disallowance has got to be made U/s 14A if any expenditure relating tothe earning of income which is not chargeable to tax has been debited tothe accounts by the assessee.


Form 3CD- Clause 18 –Payments to persons specified u/sec 40A(2)(b)

• Obtain list of such specified persons from the

Assessee & details of expenditure incurred

• Review the relevant accounts to identify any

payments made to specified persons

• In case of companies consider disclosure in the

register maintained u/sec 301 & as per As-18

• Give full particulars of transactions

• Word used is ‘payment’ –rational interpretation is

payment in respect of expenditure

• Disclosure suggested where such information not

made available


CLAUSE 21(i)AEXAMPLE : 43B

MVAT O/S AMOUNT ( RS )

O/S AS ON 01.04.2012 200,000

PAID ON 30.09.2012 150,000

BALANCE 50,000

PAID ON 31.03.2013 25,000

BALANCE 25,000


PRE-EXISTED ON THE 1ST DAY OF THE PREVIOUS YEAR BUT WAS NOT ALLOWED IN THE ASSESSEMENT OF ANY PRECEDING YEAR AND WAS :

A: PAID DURING THE PREVIOUS YEAR

NATURE OF LIABILTY AMOUNT (RS)

MVAT 25,000

B: NOT PAID DURING THE PREVIOUS YEAR


MVAT O/S 25,000

EXAMPLEMVAT O/S AMOUNT (RS)

MVAT LIABILITY FOR F.Y 2012-13

200,000

PAID ON 30.12.2012 50,000

PAID ON 30.09.2013 100,000

BALANCE 50,000


WAS INCURRED IN THE PREVIOUS YEAR AND WAS:

A. PAID ON OR BEFORE THE DUE DATE FOR FURNISHING THE

RETURN OF INCOME OF THE PRVIOUS YEAR U/S 139(1)

NATURE OF LIABILTY AMOUNT RS)

MVAT 100,000


MVAT 50,000

B. NOT PAID ON OR BEFORE THE AFORESAID DATE

CLAUSE 21(i)BEXAMPLE

CLAUSE 22(b)- PRIOR PERIOD ITEMS• There is a difference between expenditure of any earlier

year debited to the profit & loss a/c & expenditure relatingto any earlier year, which has crystallized during the relevantyear.

• Material adjustments necessitated by circumstances whichthough related to previous periods but determined in thecurrent period, will not be considered as prior period item.

• In As-5 as also in As(IT)-II notified by the Govt U/s 145, it hasbeen explained that material charges (expenses) orcredits(income) which arise in the current year as a result ofomissions in the accounts of the earlier years will beconsidered as prior period items.


CLAUSE 24(a)- SEC 269SS- ACCEPTANCE OF LOANS OR DEPOSITS OTHERWISE THAN BY AN A/C PAYEE CHEQUE / BANK

DRAFT• NO PERSON SHALL ACCEPT LOANS OR DEPOSITS OTHERWISE THAN BY AN

ACCOUNT PAYEE CHEQUE / BANK DRAFT IF

• THE AMOUNT OF SUCH LOAN OR DEPOSIT OR HE AGGREGATE OF AMOUNT OFSUCH LOAN AND DEPOSIT; OR

• ON THE DATE OF ACCEPTING SUCH LOAN OR DEPOSIT, ANY LOAN OR DEPOSITACCEPTED EARLIER BY SUCH PERSON FROM THE DEPOSITOR IS REMAININGUNPAID, THE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID; OR

• THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (a)TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO INCLAUSE (b), IS RS 20,000 OR MORE.


Clause 24(a)- Particulars loan or deposit- Sec 269SS

Name ofthe lenderordepositor

Addressof thelender orDepositor

PAN ofthe lenderorDepositor

Amountof loanordeposittaken orAccepted

Whethertheloan/deposit wassquaredupduringthepreviousYear

Maximumamountoutstanding in theaccountat anytimeduring thePreviousYear

Whetherthe loan/depositwastaken oracceptedotherwise than byanaccountpayeebankchequeoraccountbankdraft


Clause 24(b)- Particulars of repayment loan or deposit- 269T

Nameof thePayee

Addressof thePayee

PANof thePayee

Amountof loanordeposittaken orAccepted

Amount oftheRepayment

Maximumamountoutstandingin theaccount atany timeduring thePreviousYear

Whethertherepaymentwas madeotherwisethan by anaccountpayeebankcheque oraccountbank draft


Clause 25(a) Details of brought forward loss or depreciation allowance, in the following manner, to the extent available:

Sl No. AssessmentYear

Nature ofloss /allowance(in rupees)

Amountasreturned(inrupees)

Amount asassessed (givereference torelevant order)

Remarks


CLAUSE NO.25(b)- whether a change in shareholding of the company has taken place in the previous year due to which

the losses incurred prior to the previous year cannot be allowed to be carried forward in terms of section 79

• Carry forward of loss u/s 79

• loss incurred in earlier year

• 51% of the voting power

• Not applicable if the change is due to deathor gift to any relative.


Clause 26- Section-wise details of deductions, if any, admissible under Chapter VIA.

• A. Deduction in respect of certain payments.

• B. Deduction in respect of certain incomes.

• C. Other Deductions.


COMPLETION OF ASSIGNMENT• Signatures

• Form 3CA / 3CB to be signed by CharteredAccountant

• Mention of Firm Registration Number (FRN)

• Mention of membership number

• Form 3CD also to be signed by assessee?

• Preferable for CA to put initials / stamp oneach page /annexure of 3CD


Notification no. 33/2014 dated

25.07.2014• Revised the format of Tax Audit Form 3CA-3CD,

Form 3CB-3CD,;• Applicable for the Financial Year 2013-14

(Assessment Year 2014-15);• Existing utility of Tax Audit Forms stands

withdrawn;• All assesses to submit the Report in the Revised

Format.• Has 41 clauses for reporting, notified vide 7th

amendment in Rules.


http://taxguru.in/income-tax/cbdt-notifies-form-3ca-3cb-3cd-format-tax-audit-report-revised.html

Key Changes

• 9 New Clauses added;

• Scope of Reporting in many clauses expanded;

• Tabular Formats introduced for reporting in certain clauses;

• New Format enables Auditor to step into the foots of the Assessing Officer with no powers;


Check List and Pre-requisites


Changes in the main Report

Different Utilities for 3CA-3CD and 3CB-3CD;

Improved Formats with Tables in all the clauses with option to select from drop down boxes for Sections

including subsections;

Attached notes to be referred in the main report;

Signature Field for Auditor modified now states persons authorised to sign instead of

accountant;

Qualifications required to be given in a Tabular Format

from the Drop Down Boxes and Corresponding

Observations/Qualifications to be given by the Auditor;


Changes in the main Report


Inclusion of Name

• In case the Audit is done of the Proprietaryconcern, the name should be mentioned inSURNAME BOX in the main Report form,similar in line with ITR;


Qualifications Required in Report


in case of indirect tax liability (New Clause)

• Assessees liable to pay indirect taxes (like exciseduty, service tax, sales tax, customs duty, etc.)shall furnish their registration number or anyother identification number allotted tothem[clause 4 of Part A].

• Auditor have to report only the Registrationdetails of taxes payable under other statues buthe has to check under what other statuesAssessee is liable to pay taxes and has to reportaccordingly.

• Auditor may also obtain such list from his client.


Improved Drop Down Boxes


Relevant clauses of section 44AB (New Clause)

• The relevant clauses of section 44AB shall bereported under which audit has beenconducted[clause 8 of Part A].

• Now Auditor has to report if the Audit is ofBusiness or Profession or under Presumptivetaxation scheme.


Help Menu for Clause wise Audit Report Selection


Location at which books of account are kept (Scope of Reporting

expanded)• New Form seeks details of the address at

which books of account of assessee have beenkept [clause 11(b) of Part B].

• If the books of accounts are not kept at onelocation, Auditor has to furnish the addressesof all such locations along with details ofbooks of accounts maintained at eachlocation.


Nature of documents examined by the auditor

(Scope of Reporting expanded)

• The auditor is required to specify the nature ofdocuments examined by him in the course oftax audit[clause 11(c) of Part B].


Change in method of accounting/stock valuation

A tabular format is specified for reporting of financial

impact of changes in method of accounting and

method of stock valuation[clause 13 and

clause 14 of Part B].

Serial number

Particulars

Increase in profit (Rs.)

Decrease in profit (Rs.)


Valuation of Stock


Drop Down Box for Business Code


Presumptive Income Reporting

S. No. Section Business covered

1 44AD Eligible business

2 44AE Transport business

3 44B Shipping business of a non-resident

4 44BB Providing service or facilities in connection with, orsupplying plant and machinery on hire used, or to beused, in the prospecting for, or extraction or productionof, mineral oils

5 44BBA Operation of aircraft by non-resident

6 44BBB Civil construction etc. in certain turnkey power project bynon-residents

7 Chapter XII-G Special provisions relating to Shipping Companies(Section 115V to 115VT)

8 First Schedule Insurance Business

9 Any other relevant section

This refers to the sections not listed above under whichincome may be assessable on presumptive basis likesection 44D and section 115A(1)(b) and will include anyother section that may be enacted in future forpresumptive taxation


Changes by Finance Act, 2014

• The Finance (No. 2) Act, 2014 has amended section 145 w.e.f AY 2015-16 -

– the words ‘accounting standards’ be replaced with the words ‘incomecomputation and disclosure standards’.

– As per the memorandum explaining the Finance (No. 2) Bill 2014, suchan amendment has been made in order to clarify that the standardsnotified under section 145(2) are only meant for computation ofincome and disclosure of information and the assessee need notmaintain books of account on the basis of AS notified under theIncome-tax Act, 1961.

– In effect from AY 2015-16, the aforementioned Accounting Standards,AS(IT)-I and AS(IT)-II will be repealed.

– However, the Accounting Standards issued by ICAI would still berequired to be followed by the assessee, wherever applicable.


Transfer of land/building for less than stamp duty

value

• Details of land or building transferred by assesseefor less than stamp duty value (under section43CA or under section 50C) shall be reported innew Form 3CD [clause 17 of Part B].

• Auditor has to report where any land or buildingor both is transferred during the previous year fora consideration less than value adopted orassessed or assessable by any authority of a StateGovernment referred to in section 43CA or 50C.


Transfer of land/building for less than stamp duty

value

Details of property transferred

Consideration received or accrued

Value adopted or assessed or assessable


Additional Reporting

• Deductions allowable under sections 32AC,35AD, 35CCC and 35DDD are also required tobe reported in revised Form No. 3CD[clause 19of Part B];

• Detailed information to be given on amountdebited to P & L a/c of Capital Expenses,Personal Expenses, and Advertisement.(Clause 21(a))


Disallowances

• Old Form3CD required reporting ofinadmissible payments only when they weredebited to Profit and loss account;

• New Form 3CD requires reporting of followingdisallowable payments, even if they are notdebited to profit and loss account[clause 21 ofPart B]:


Disallowances

• Disallowance for TDS default under Section 40(a)– Revised report restricted the reporting only to

sub-clause (i) and (ia). Sub-Clause (i) deals withallowability of payment made to non-resident ofsuch sums on which TDS is deductible, while sub-clause (ia) deals with payment to residentdedcutees. It further requires Auditor to reportthe name and address of the payee in respect ofwhom default has been committed.


Disallowances

• Disallowance for cash payments under section 40A(3)– Earlier Auditor had to report only the cash payment for expenses

incurred during the year in excess of prescribed limit– Now the CBDT has casted additional responsibility on auditor to report

the cash payment made during the year in respect of expensesincurred in earlier years exceeding the prescribed limit U/s. 40A(3A).

– Auditor has to verify all the cash payments in excess of prescribedlimits to report under section 40A(3) and 40A(3A).

– In addition to this auditor also needs to report Cash payment undersection 269T if the same relates to any loan or deposit exceeding thelimit prescribed under section 269T.

• Clause has further removed the reporting requirement of certificateif any been obtained by the Auditor from the Assessee U/s. 40A(3).


Disallowances

• The Finance (No.2) Act, 2014 has amended the provisions of section40(a)(ia) w.e.f. AY 2014

• to disallow only 30% of any sum payable to a resident on whichtax is deductible at source under Chapter XVII-B and such tax hasnot been deducted or after deduction has not been paid on orbefore the due date specified under section 139(1).

• The first proviso to section 40(a)(ia) has also been amended toprovide that where any sum on which tax has been deducted in anysubsequent year, or has been deducted during the previous yearbut paid after the due date specified in sub- section (1) of section139, 30% of such sum disallowed, shall be allowed as a deductionin computing the income of the previous year in which such taxhas been paid.


Disallowances

• Disallowance for provision for gratuity under section 40A(7)

• Disallowance under Section 40A(9)

• Particulars of any liability of a contingent nature

• Amount of deduction inadmissible under section 14A

• Interest inadmissible under the proviso to section 36(1)(iii)


Deemed income under Section

32AC• Section 32AC of the Act provides for investment

allowance of 15% for investment in plant andmachinery.

• New form provides for reporting of deemedincome which results from sale or transfer of newasset, (if asset was acquired and installed by theassessee for the purpose of claiming deductionsunder Section 32AC) within a period of five yearsfrom the date of its installation[clause 24 of PartB].


Reporting for Liability


HELP MENU FOR

SELECTION OF

CLAUSE

Cenvat Reporting


Receipt of unlisted shares

• Tax Auditor`` has to report whether during theprevious year the assessee has received anyproperty, being share of a company not being acompany in which the public are substantiallyinterested, without consideration or forinadequate consideration as referred to in section56(2)(viia).;

• Clarity required as to how a Tax Auditor candetermine the Value of shares of a company ofwhich he is not the auditor.


Issue of shares above fair market value

• New clause is inserted in the Form 3CD whichrequires reporting of all transactions of issueof shares where consideration received byassessee exceeds its fair market value in viewof section 56(2)(viib)[clause 29 of Part B] ), ifyes, please furnish the details of the same.

• Clause applies to Companies in which Publicare not substantially interested. (Clause 29).


Provisions of Section

• Applicable for firms and companies in which public is not substantiallyinterested, reporting under this clause is done only for them.

• Provisions does not apply to the property received by way of a transactionnot regarded as transfer under section 47(via), 47(vic), 47(vicb), 47(vid)and 47(vii).

• The fair market value of shares means the value determined in accordancewith the method prescribed in rule 11UA of the Income-tax Rules, 1962.

• Obtain list containing the details of shares received ,if any, by him fromany other company and verify the same from the books of accounts andother relevant documents.

• Obtain a report from Merchant Banker or an accountant, the auditor forthe same.

• Standard on Auditing – 620, relying on the work of an expert should help.


Other Details Sought For

Prior Period Items

• Expenses/Income needs to be selected

• Year to which it pertains to be informed

Consideration for issue of Shares

• Name of the Person from whose consideration received for issue of Shares

• PAN Number

• No. of shares issued

• Amount of Consideration received

• Fair Market Value details to be given


Non reporting of Certificate Under

section 269SS and 269T • Auditor not required to report whether or not

he has obtained any certificate from Assessee Under section 269SS and 269T of the Income Tax Act,1961. (Clause 31)

• Finance Act, 2014 has acknowledged the fact andallowed the “use of electronic clearing systemthrough a bank account” as a permissible mode forthe purposes of section 269SS and 269T, but notincluded the same in the utility


Speculation losses

• New Form No. 3CD provides for reporting of lossesfrom speculation business as referred to in Section73[clause 32(c) of Part B].

• Auditor has to furnish the following details.– details of speculation loss referred to in section 73 during

the previous year– details of loss referred to in section 73A in respect of any

specified business– Auditor has to state whether the company is deemed to be

carrying on a speculation business as referred inexplanation to section 73 and details of speculation lossfrom such business.

(Clause 36(c), 32(d) and 32(e)


Losses from business specified under section

35AD• Assessee shall furnish details of losses incurred as

referred to in Section 73A in respect of specifiedbusinesses mentioned in Section 35AD[clause32(d) of Part B].

• Section 35AD.– An assessee shall be allowed a deduction in respect of

the whole of any expenditure of capital natureincurred, wholly and exclusively, for the purposes ofany specified business carried on by him during theprevious year in which such expenditure is incurred byhim


Reporting of deductions claimed under Sections 10A and 10AA

• If any deduction has been claimed by assesseeunder Sections 10A and 10AA then it shall bereported in new Form No. 3CD[clause 33 ofPart B].

– Verify the claim allowable and Report (AdditionalResponsibility);

– Audit Report to be submitted online.;

– No requirement to attach Report with Form 3CD.


Compliance with TCS provisions

• Old Form 3CD required reporting on compliancewith TDS provisions only. New Form No. 3CDrequires reporting on compliance with TCSprovisions as well[clause 34(a) of Part B].

• In addition to details of TDS/TCS auditor has to– disclose amount short deducted,– TAN of the Assessee,– Amount on which TDS /TCS deducted or collected,– amount paid and– also details of amount of TDS/TCS not paid by the

Assessee.


Other Details Sought For


Other Details Sought For (contd)


Compliance of TDS Reporting


Compliance of TDS Reporting


Assessee-in-default

• If assessee is deemed as an assessee-in-default and he is liable to pay interest underSection 201(1A) or 206C(7), the tax auditorshall furnish the TAN of assessee, interestpayable and interest actually paid[clause 34(c)of Part B].


Assessee-in-default


Mandatory Reporting in Raw Material Consumption


Dividend Distribution Tax

• Revised Form No. 3CD requires reporting offollowing reductions as referred to in clause (i)and clause (ii) of Section 115-O(1A)[clause 36of Part B]:

– i) Dividend received by domestic company from itssubsidiary, and

– ii) The amount of dividend paid to any person foror on behalf of the New Pension System Trustreferred to in Section 10(44).


Audits

Cost audit:• Old Form No. 3CD required reporting only when statutory cost audit was carried

out under Section 233A of the Companies Act, 1956.• Revised Form No. 3CD specifies reporting requirement even when cost audit has

been carried out voluntarily.• The requirement of attachment of copy of cost audit report along with Form has

been substituted with reporting of qualifications in cost audit report[clause 37 ofPart B]

Cost Audit under Central Excise Act:• Attachment of copy of cost audit report along with Form substituted with

reporting of qualifications in cost audit report [clause 38 of Part B].

Special Audit under Service Tax:If any service-tax audit is carried out in relation to valuation of taxable services, thetax auditor shall report any qualifications made in relation to valuation of taxableservices[clause 39 of Part B].


Reporting of Other Audits


Ratios

• Reporting of certain ratios pertaining tocurrent year only, the new Form requiresreporting of ratios of preceding financial yearas well. Further, total turnover is to bereported for the previous year as well as forpreceding financial year[clause 40 of Part B].


Details of Ratios


Demand raised or refund issued

• New Form seeks details of demand raised orrefund issued under any tax laws (other thanIncome Tax Act, 1961 and Wealth Tax Act,1957) along with details of relevantproceedings[clause 41 of Part B].

• Duplication of reporting for certain classes ofCorporate Assessees;


Details of Demands/Refunds in other laws


Details of Demands/Refunds in other laws

• It may be noted that even though the demand/refund order isissued during the previous year, it may pertain to a periodother than the relevant previous year. In such cases also,reporting has to be done under this clause.

• In case the assessee is following accrual system of accounting,the demand order, if not disputable, is entered into books ofaccounts as a liability and the refund order is entered intobooks of account as income accrued.

• In case of cash system of accounting will record the same onactual payment or receipt basis. If there is any adjustment ofrefund against any demand, the auditor shall also report thesame under this clause.


Additional Reporting in Other Clauses

Clause No Earlier Format Changes in New Format

5 Previous Year Ended on March 31, ….

Period of Previous Year to be given from to

9(c) List of books of account examined

List of books of account and nature of relevant documents examined. Clause No. 11(c)

10 Presumptive Taxation First Schedule, Chapter XII G added. Clause No. 12

14 Modvat on Goods Modvat word replaced by CenvatCredit

15 Amount admissible in Sections 35 etc (Total 12)

Sections increased to 21 and to report about the fulfillment of the conditions and certification of the claims (ClauseNo. 19)


Additional Reporting in Other Clauses

Clause No Earlier Format Changes in New Format

17(f) Amounts inadmissible under section 40(a);

Reporting expanded to all clauses of Section 40 [Clause 21 (a ) and (b)]

17(h)(b) Reporting under Section 40A(3) PAN Number of the payee to be mentioned, if available [Clause 21 (c ) and (d)]

19 Amounts deemed to be profits and gains under section 33AB or33ABA or 33AC

Additional Reporting under Section 32AC (Clause 24)

22(a) Details of Modvat Credit Replaced by Cenvat Credit. CenvatCredit under Excise Rules (Clause 27(a))

31 Reporting of Loans Mistake in the Form to include other banking channels (Clause 31); Scope expanded for verification of other relevant documents.


Reports mandated by CA for e-filing

Tax Audit Reports Form 3CEB (Transfer Pricing

Report for International as well as Domestic Transactions)

Form 29B (Report u/s 115JB)Any other form as may be

specified (Specified Form 10B for Trust)

Uploaded by CA & Approved by

Assessee


Process for ITR Filing for Audit Cases

Register as CA user

Assessee to add Tax Auditor & Consultant

CA to upload AR xml with Digital Signature

Assessee to upload ITR & confirm TAR


The pre-requisites for registering as Chartered Accountant

in e-Filing are

1. You should be a practicing Chartered Accountant

(registered with Institute of Chartered Accountants of

India, ICAI, with a valid Membership Number)

2. You should have a valid Permanent Account Number

(PAN) and Digital Signature Certificate.

Registration








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Forgiveness

Applying computer technology is simply finding the right wrench to

pound in the correct screw.

A mistake in Tax Returns can be corrected by paying penalties and

result in monetary loss but the non-correction of Mistakes made in

Relationship in TIME will ruin your entire LIFE… Correction of Both..

earlier the BETTER

A MISTAKE should always be taken as a Mistake and not as MY

Mistake or HIS Mistake as it leads to difference in the Hearts..Let us

correct it in TIME

http://www.louderthanwordsbooks.com/marni/wp-content/uploads/2009/09/Apologize-Dog-I-am-sorry-cartoon-300x300.jpg

http://www.louderthanwordsbooks.com/marni/wp-content/uploads/2009/09/Apologize-Dog-I-am-sorry-cartoon-300x300.jpg



Doubts & Queries

C.A. Avinash V. Rawani 100

Do not wait for the Last

Judgment…..

It takes place every day

Compiled by CA Avinash RawaniRawani and Company,

Chartered AccountantsB-206, Hinal Heritage, Patel Wadi, S.V.P.Road,Near Chamunda Circle, Borivali West,Mumbai 400092E-mail : [email protected]: www.carawani.com

• The views stated in the material and also discussed are purely of the compiler for the discussions at the Study Circle and should not be used for any legal interpretation. Any decision to be taken by the user of this information is to be taken after studying the requisite provisions of the respective Act and specific applications to particular client. Neither the compiler nor the study circle shall be responsible for the same. f the said information is reproduced or published in the interest of the profession, would humbly request to inform to the Compiler about the same.


mailto:[email protected]

http://www.carawani.com/

Documents

CHAMBER OF TAX CONSULTANTS - ctconline.org Audit.pdf · CHAMBER OF TAX CONSULTANTS TAX AUDIT UNDER ... interest are not admissible, ... - Expenses inadmissible in terms of