Tax Audit Report - Issues, Information etc from Taxguru.in
GIRISH KULKARNI
Power point presentation on New Tax Audit forms
The central Board of Direct taxes has extended the date of obtaining and furnishing the Tax Audit report u/s 44AB to 30/11/2014 through an order issued under section 119 of the Income Tax Act, 1961 on 20/08/2014 but the order is silent about the date of filing of Income tax returns u/s 139(1).
There is an opinion in certain legal sector that extending the date of Tax audit report will automatically extend the date of filing of ITR but the law does not support this contention because there is no date of obtaining and filing of tax audit report in section 44AB. The section 44AB has linked the date of filing of audit report with the “due date” of filing of ITR u/s 139(1) hence the due date of obtaining and furnishing the audit report u/s 44AB is dependent and linked with the “due date” mentioned in section 139(1) but the vice versa is not true.
The date has been extended under section 44AB and since no date extension has been provided under section 139(1) hence still the date of submission of the ITR is 30/09/2014 and hence, has given rise to a very confusing situation. See how one can file the ITR without completion of the Tax audit. Logical sequence in this respect should be first complete the audit and then file the income tax return.
There may be a drafting error in the initial order which was received on 20/08/2014 and this was the first reaction from us when the order was issued presuming that the clarification/rectification/fresh order will follow but since in the last 4 days no clarification is received hence the apprehension in this respect is growing within the professionals and the taxpayer community.
What the central board of direct taxes wants to gain from this type of situation is better known to them only because ITR forms do not accept/permit this type of situation. The income tax returns itself require the date of furnishing of audit report and date of signing of audit report which can only be filed after completion of Tax audit report.
Even the instructions attached with the ITR do not support the situation of filing of ITR before filing of Tax audit report. In this respect please refer the instruction No. 4 – ‘Manner of filing of ITR’ which clearly states the following:-
“From assessment year 2013-14 onwards in case an assessee who is required to furnish a report of audit under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)(via), 10A, 10AA, 12A(1)(b), 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115VW he shall file the report electronically on or before the date of filing the return of income.”
In this point it has been clearly mentioned that Tax audit report should be e-filed on or before the date of filing ITR.
Further as per the columns No. 6, under ‘Audit Information’, of the instructions attached with the ITR the “date of audit report” and “date of furnishing of audit report” has to be reported in the ITR. See how this is possible when return filing date is still 30/09/2011 and date of obtaining and furnishing the audit report is extended to 30/11/2014.
This entire situation is the result of the illogical, unreasonable and untimely “midyear” introduction of the new formats of the Tax audit report and such practice should be stopped for future. This is an absurd, complex and confusing situation and the CBDT should extend the date of filing of return of income because the situation created by extending the date of furnishing the audit report without extending the date of filing of income tax return has created anxiety in the minds of taxpayers and the chartered accountants and making it impossible to file the ITR on or before 30/09/2014.
Further we suggest the ICAI should appoint an expert committee of the Experts to test the legality and validity of this situation and further the legality of the order of the CBDT u/s 119 issued to 20/04/2014 since as per section 119 CBDT can relax the provisions of section 139 amongst the other section but not the provisions under section 44AB.
There may be different opinion which we are getting from some section of the experts in this respect but the confusion and complexity in this respect should be cleared ASAP.
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-CA Sudhir Halakhandi, -CA Abhas Halakhandi
Halakhandi And Company, Chartered Accountants
“Halakhandi”, Laxmi Market, Beawar-305901(Raj)
Cell- 9828067256, MAIL –sudhirha...@gmail.com
http://taxguru.in/income-tax/tax-audit-report-cbdt-extend-date-filing-itr.html
NEW Format of Audit Report U/s 44AB
Changes
1. Period of P&L a/c / Income and Expenditure Account
2. the particulars given in the said Form No. 3CD and the Annexure thereto are true and correct subject to the following observations/qualifications, if any:
Form 3 CD
1. Clause – 4 N
- Particulars Of Registration
- Excise , Service tax , Sales tax and customs etc
- Auditors to cheek & report
- Auditors may obtain such List from his client
2. Clause - 8 N - to report relevant Clause Of Sec. 44 AB
3 Clause 11 (B) A - locations /Addresses of keeping books of account to be given along with details of books Of accounts maintained at each location
4. Clause 11(C) A- Nature of Relevant Document Examined
5. Clause 12- A profit /gain on presumptive Basis chapter XII G , First Schedule – ships tonnage basis / Insurance business
6. Clause 13 ( c ) / 14 ( b) A_ Effect of change in method of accounting or valuation of closing stock , a format has been prescribed.
7. Clause 17 N- Particulars of sales of land / Building Less than Stamp value to be given
8. Clause 18 (d-I ) A – Addl. Details of adjustment of Cenvat credits claimed and allowed for assets acquired on or after 1st March 1994
9. Clause 19 A- Deduction allowable u/s 32AC , 35AD, 35CCC, 35DDD
10. Clause 20 (b) A-New format for contribution from employees for various funds
11. Clause 21(a) A – Amount debited to P & L A/c of capital exp. , personal exp. & Advertisement in prescribed format
12. Clause 21(b) A & N– Amount inadmissible of U/S 40 (a)
- Sub-Clause (i) allowability of payment made to non resident on which TDS is deductible
- Sub Clause (1a)- payment TO Resident
- Name & addresses of payees for which defaults committed
13. Clause 21 (d) –
Addl. Reporting of disallowance….. u/s 40A(3A)
- Cash payment in excess of prescribed limit even for Exp. incurred in earlier Years
- Cash payment in Excess of limit U/s 269 T for loans / deposits
14Clause – 24 A
Reporting of deemed income u/s 32 AC i.e. investment allowance u/s 32 AC & if assets sold within 5 years of its installation
15. Clause 27(a) A - MODVAT / CENVAT
16. Clause 28 N –
Reporting of share acquired with inadequate consideration of companies in which Public not Substantially Interested .
17. Clause 29 N–share Premium Received by company in which Public not Substantially Interested , in excess of fair market Value , if any
18. Clause 31 A- Non reporting of Certificate U/s 269SS & 269 T .
19. Clause 32 (c)-,(d) & (e) A
Addl. . reporting of losses in speculative Business And carry forward & set off losses by specified Business .
1 – Details of speculative losses u/s 73 and
2 – U/s 73 A for Specified Business
3 – Whether company deemed to be carrying on speculative Business
( Exp. To Sec. 73) and Details of speculative losses from such business .
20. Clause 33 A– Reporting of deduction Claimed u/s 10 A and 10AA in prescribed format
21. Clause 34 (a) A
– section wise TDS /TCS deducted/ Collected & paid , Short deducted, TAN Of Assesses & Also TDS /TCS not paid by assesses .
22. Clause 34 (b) A– Details late filing TDS & TCS .-
23. Clause 34 (c) A– Details of inerest Payable u/s 201 (1A) & 206 C(7)-
24. clause 36 A – Reporting on tax on distributed tax u/s 115 –o (1A)(i) of dividends received by domestic company from its subsidiary and u/s 115 O (1A) (ii) of dividend paid to any person for or on behalf of new person trust u/s 10 (44)
25. Clause 37 A– Reporting on cost with qualification in cost Audit Report .
26. Clause 38 A– Reporting on audit under central Excise with the qualification in audit
27. Clause 39 N- Whether any audit u/s 72 A of finance act 1994 and details of if any of disqualification or disagreement on any matter / items / value / qty.
28. clause 40 A- Ratio analysis of two years & turnover of two Years.
29. Clause 41 N– Details of demand and refund , during the year under Any tax laws other than Income tax & Wealth tax & Details of relevant proceeding .
30. Annexure 1 – Removed – No impact
(Author- S S Gaur, E mail : ssga...@gmail.com- Mobile No. 9414969274)
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