presentation on tax audit filing of tax audit report

5/21/2018 Presentation on Tax Audit Filing of Tax Audit Report

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New e-filing procedures

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Validate option, validates all the pages of the Form andthrows up the errors in the form.

Once the form is validated, Generate xml option createsa final xml which has to be uploaded with the department.


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Process:

Step 1: Visit ITD Website. Assessee has to login through his LoginCredentials

Dashboard will appear on the screenStep 2: Go to Worklist

List of Reports uploaded by CA Pending for Approval will appear.

Acceptance / Rejection of Report by Assessee

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Assessee can download the Attachment and Report uploaded by CA.To submit, Assessee need to select Approve and affix his Dig. Sign.

Step 4: On successful upload, Upload Screen will appear

Step 5: Assessee can also reject the Return. However, reasons for

rejections must be mentioned at the time of Rejection.Step 6: Acknowledgement can be generated from My Account -> MyReturns / Forms. Click on the Return Ack. No.

Step 7: Assessee can download Audit Report, Receipt and

Attachments and also Acknowledgement


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Step 1 - Login

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A t / R j ti f R t b A


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Step 2 Go to Worklist

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A / R j i f R b A


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Step 3 Form View & Acceptance/Rejection

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Step 4 Screen after Uploading of Report

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A t / R j ti f R t b A


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Step 5(a) Rejection of Report

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Acceptance / Rejection of Report b Assessee


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Step 5(b) Worklist after Rejection of Report

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Step 6 Generation of Acknowledgement

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Step 7 Acknowledgement Screen

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Step 7 Format of Acknowledgement

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Hardships likely to be faced by assessees as per the


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representation:

Attachment of the Financial Statements It is not clear as to whether the Financial Statements to be

attached MUST BE A SCANNED COPY of manually signed statements or a PDF file digitally signed will

be treated as sufficient compliance.

Clause 14 Depreciation There is no column to give details of additional depreciation. Whether datewise details of all the minor items of additions to fixed assets are to be given? This data could run into a

few thousands for many businesses, and would take substantial time to re-enter. Is there any limitation on

the number of items one can enter?

Clause 15 - Under sub clauses a) & b) is it necessary to select each section & put 0 in the amounts

column if there is nothing to report under this clause? Or can we simply skip filling any information in thisclause?

Clause 17 & 17A Under sub clauses a) & b), h)B) of Clause 17 & Clause 17A, it is normal practice to

give appropriate comments by the assessee / tax auditor. But for e filing form, the space provided is not

sufficient. So in that case is it proper for the assessee/ tax auditor to keep the appropriate comments /

remarks / explanation in the hard copy but in the online form we only fill NIL or 0?

Clause 19 Under this clause whether we have to select each section and fill NIL 0 or we can skip filling

this clause, if there is no information to be reported?

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Clause 21 Under sub clause (i)(B)(b), normally the Tax Auditor fills the information till the date of signing

of the Audit Report. If the payment is made after the date of Audit Report but before the due date of filing

ITR u/s 139(1) of the Act the same is allowed u/s 43B of the Act. Now if the Tax Audit Report is signed on

20.6.2013 and the amounts unpaid are shown under the above sub clause and the Form 3CD is being

uploaded on 16.8.2013, by which time the said amounts have already been paid, what information shouldbe filled in this sub clause? Further suppose the payment is not yet made, and the Form 3CD is uploaded

on 16.8.2013 and the assessee makes the payment after 16.8.2013 but before 30.9.2013, and while

uploading the ITR does not disallow the amounts u/s 43B of the Act, will there be a problem of

disallowance while processing the ITR by CPC, Bengaluru?

Clause 24 Under sub clauses a) & b) if the loan is accepted or repaid by way of any journal / transfer

entry or electronic funds transfer, the remark to that effect is given in Tax Auditors report. However, in thee filing of the Form 3CD, the assessee/tax auditor has to only state whether the amount was accepted /

repaid by otherwise than by account payee cheque or demand draft, and options available are only Yes

or No. In this case, selection of option No without appropriate remarks may lead to penal proceedings

under the Act.

Clause 27 Under sub clause a), the tax auditor normally gives the appropriateremarks/comments/explanation in this regard. But in the online form 3CD, only Yes or No options are

provided under this sub clause. So in that case is it proper that in tax auditors hard copy he keeps the

appropriate remarks / comments / explanation, but in the online form he only fills Yes or No?

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Clause 27-Sub clause b)(ii) - Besides the normal short deduction, a Tax Auditor normally reports the

cases wherein the tax is deducted under wrong section resulting in short deduction, e.g. if tax is deducted

u/s 194C instead of u/s 194J. However, in the online form 3CD, short deduction only in the respective

section can be reported. Under these circumstances, how does one report the fact of short deduction due

to wrong section?

Clause 27 Sub clause b)(iii) - In addition to the late deduction, the tax auditor normally gives the

information about tax deducted but paid late i.e. after the due date of payment. However, there is no such

option in the online form 3CD. In that case is it proper that the tax auditor gives this information in the hard

copy u no repor ng s one n e on ne orm

Clause 27 (b)(iv) Normally nowadays there is no such situation wherein tax is deducted but not paid to

the Central Govt. as in such a situation the entire expense gets disallowed. However, it is possible that till

conclusion of the Tax Audit Report, the TDS may not have been paid. So in a situation wherein the Tax

Audit Report is finalized on 20.6.2013, and under this clause a default is reported. Till uploading of the

online Form 3CD, say on 16.8.2013, the TDS is not paid. The assessee pays the TDS after 16.8.2013 but

before 30.9.2013 and uploads the ITR without disallowing any amount U/S 40(a)(ia). What will be the

consequences?

Clause 28 This clause deals with quantitative details. In case of Trading / Manufacturing Unit normallythe data is available. But if the same is not available, the tax auditor simply reports Information Not

Available.

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Certain voluminous data needs to be keyed in into the utility, such as asset wise addition to fixed assets,

which would take a considerable amount of time for many assessees. Presently, no software is readily

available which will automatically convert existing tax audit reports in word or excel format into xml files.

Now the questions are 1) If the data is not available at all till uploading of the report, can a tax auditor skip

this clause? 2) If the data is made available after signing of the Tax Audit Report but before uploading the

Form 3CD, whether the same should be filled in? In that case, whether the signed Tax Audit Report needs

to be revised?

Clause 28(b)(A) - In case of manufacturing assessees, if yield is more than 100%, the utility does not

accept it.

Clause 32 In case of service industry or professionals, normally the tax auditors report states that The

activity of the assessee is neither trading nor manufacturing - as such these ratios are not applicable.

In the online filing there is no space for this comment. In this situation can a tax auditor simply skip this

clause? In that case, is it proper that a tax auditor gives this statement in the hard copy but no reporting isdone in the online form3CD?

In addition, many other clauses of Form 3CD need appropriate disclosures by way of Notes etc. No

disclosure can be made unless space is provided in required fields, e.g. Disclosure of section 145A,

Payments made by cheque or bank draft for section 40A(3), 269SS and 269T, etc.

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The Annexure II is still part of the Form 3CD. However, from A.Y. 2010-11 the provisions of FBT are made

ineffective. The online Form 3CD also does not provide this Annexure II. What is the exact position? Are

tax auditors supposed to report NIL under this annexure? Normally, tax auditors report NIL and the factthat provisions of FBT are made ineffective from A.Y. 2010-11 is also reported.

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Suggestions:


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Suggestions:

In view of the above difficulties/issues, it is suggested that the requirement of furnishing report of audit

electronically be made applicable from Assessment Year 2014-15 (i.e. next year) onwards, by which time

appropriate software would be available for conversion.

Alternatively, the due date for furnishing the report of audit be extended to 31st December 2013 instead of

30th September 2013 (i.e. extension of three months for furnishing the report), while the return can still be

uploaded by the due date of 30th September/30th November, as the case may be.

Clarification should be issued immediately in respect of various issues arising in respect of electronic filing

of Form 3CA/3CB/3CD, as pointed out above.

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Thank You!

E-mail: [email protected]: 9820290826


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Questions?


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Thank You

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presentation on tax audit filing of tax audit report

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