Revised Tax Audit Report Revised Tax Audit Report Form Nos. 3CA, - PowerPoint PPT Presentation

Revised Tax Audit Report Revised Tax Audit Report Form Nos. 3CA, 3CB, 3CD: Form Nos. 3CA, 3CB, 3CD: Important Changes Important Changes -CA Anuj J. Sharedalal At Ahmedabad Branch of WIRC of ICAI C.R. Sharedalal & Co. www.crsharedalalco.com

Contents • • Tax Audits – History and Brief Background Tax Audits – History and Brief Background • • Notification No. 33/2014 dated 25.7.2014 and News on e-filing Notification No. 33/2014 dated 25.7.2014 and News on e-filing portal dated 29.7.2014 portal dated 29.7.2014 • • F. No.133/24/2014-TPL dt. 20.8.14 – Due date Extension F. No.133/24/2014-TPL dt. 20.8.14 – Due date Extension • • Utility and Schema available on e-filing website – 20.8.2014 Utility and Schema available on e-filing website – 20.8.2014 • • Important changes in Tax Audit Report Forms: Important changes in Tax Audit Report Forms: – 3CA – 3CA – 3CB – 3CB – 3CD – 3CD • • Important points for Tax Auditors Important points for Tax Auditors C.R. Sharedalal & Co. www.crsharedalalco.com

Tax Audits – History and Brief Tax Audits – History and Brief Background Background C.R. Sharedalal & Co. www.crsharedalalco.com

Tax Audits – History • 1984 – Tax Audit provisions introduced • 1984 – Tax Audit provisions introduced Memorandum explaining the provisions of the Memorandum explaining the provisions of the Finance Bill, 1984: Finance Bill, 1984: “the compulsory audit is intended to ensure “the compulsory audit is intended to ensure proper maintenance of books of account and proper maintenance of books of account and other records, in order to reflect the true income other records, in order to reflect the true income of of the the tax tax payer payer and and to to facilitate facilitate the the administration administration of of tax tax laws laws by by a a proper proper presentation of the accounts before the tax presentation of the accounts before the tax authorities. This would also save the time of the authorities. This would also save the time of the Assessing Officers considerably in carrying out the Assessing Officers considerably in carrying out the verification” verification” C.R. Sharedalal & Co. www.crsharedalalco.com

Tax Audits – History • 1984 – Tax Audit provisions introduced • 1984 – Tax Audit provisions introduced • 1997 – Tax Audit provisions applicable to 44AD • 1997 – Tax Audit provisions applicable to 44AD • 1999 – All Forms and Rule 6G revised. Form 3CC and • 1999 – All Forms and Rule 6G revised. Form 3CC and 3CE done away with 3CE done away with • 2003 - Tax Audit provisions applicable to 44BB and • 2003 - Tax Audit provisions applicable to 44BB and 44BBB 44BBB • 2004 – All Forms revised • 2004 – All Forms revised • 2006 – Form 3CD revised • 2006 – Form 3CD revised • 2008 – requirement to furnish report with return done • 2008 – requirement to furnish report with return done away with away with • 2011 – cases of fake membership numbers • 2011 – cases of fake membership numbers • 2013 – e-filing of tax audit reports made mandatory • 2013 – e-filing of tax audit reports made mandatory C.R. Sharedalal & Co. www.crsharedalalco.com

Tax Audits – Brief Background • Specified Limits u/s 44AB read with Rule 6G: • Specified Limits u/s 44AB read with Rule 6G: Sr. No. Assessment Year *Limits – *Limits – Business Profession 1. 1. 1985-86 to 2010-11 1985-86 to 2010-11 40,00,000 40,00,000 10,00,000 10,00,000 2. 2011-12 & 2012-13 60,00,000 15,00,000 3. 2013-14 1,00,00,000 25,00,000 * Limits = sales/turnover/gross receipts exceeds * Limits = sales/turnover/gross receipts exceeds C.R. Sharedalal & Co. www.crsharedalalco.com

Tax Audits – Brief Background Limits exceeded (1 crore): Tax Audit Businesses u/s 44AD, AE, BB, BBB Limits not exceeded: Limits not exceeded: Minimum Deemed Minimum Deemed Tax Audit Tax Audit Income or Tax Audit Income or Tax Audit Applicability Applicability Limits exceeded (Broadly) (Broadly) (1 crore/25 lakhs): Tax Audit Profession or Other businesses Limits not exceeded: No Tax Audit C.R. Sharedalal & Co. www.crsharedalalco.com

Tax Audits – Brief Background Rule 6G of Income Tax Rules, 1962: Rule 6G of Income Tax Rules, 1962: • 6G(1) - Report of Audit – Form Nos. 3CA & 3CB • 6G(1) - Report of Audit – Form Nos. 3CA & 3CB • 6G(2) - Particulars to be furnished in Form No. • 6G(2) - Particulars to be furnished in Form No. 3CD 3CD • True & Correct vs. True & Fair • True & Correct vs. True & Fair • Appendix – II contains the forms • Appendix – II contains the forms C.R. Sharedalal & Co. www.crsharedalalco.com

Notification No. 33/2014 dated Notification No. 33/2014 dated 25.7.2014 25.7.2014 C.R. Sharedalal & Co. www.crsharedalalco.com

Notification No. 33/2014 dated 25.7.2014 • Notification • Notification published published on on website website on on 28.7.2014 (26 th & 27 th was weekend) 28.7.2014 (26 th & 27 th was weekend) • Comes into force on the date of publication in • Comes into force on the date of publication in the Official Gazette the Official Gazette • Whether this is applicable to tax audit reports • Whether this is applicable to tax audit reports of any previous AYs not filed till 25.7.2014? of any previous AYs not filed till 25.7.2014? C.R. Sharedalal & Co. www.crsharedalalco.com

News on e-filing portal dated News on e-filing portal dated 29.7.2014 29.7.2014 C.R. Sharedalal & Co. www.crsharedalalco.com

News on e-filing portal dated 29.7.2014 • What about reports filed between 25.7.2014 & 29.7.2014? C.R. Sharedalal & Co. www.crsharedalalco.com

F. No.133/24/2014-TPL dt. F. No.133/24/2014-TPL dt. 20.8.14 – Due date Extension 20.8.14 – Due date Extension C.R. Sharedalal & Co. www.crsharedalalco.com

F. No.133/24/2014-TPL dt. 20.8.14 – Due date Extension • Due date of filing audit report u/s. 44AB • Due date of filing audit report u/s. 44AB extended extended from from 30th 30th September September to to 30th 30th November 2014. November 2014. • Tax audit reports filed during the period from • Tax audit reports filed during the period from 1st April, 2014 to 24th July, 2014 in the pre- 1st April, 2014 to 24th July, 2014 in the pre- revised Forms shall be treated as valid revised Forms shall be treated as valid C.R. Sharedalal & Co. www.crsharedalalco.com

Utility and Schema available on Utility and Schema available on e-filing portal from 20-08-2014 e-filing portal from 20-08-2014 C.R. Sharedalal & Co. www.crsharedalalco.com

Utility and Schema • PR2 version already out – lets see whether last • PR2 version already out – lets see whether last year’s record is broken or not! year’s record is broken or not! - - C.R. Sharedalal & Co. www.crsharedalalco.com

Important changes in Important changes in Tax Audit Report Forms Tax Audit Report Forms C.R. Sharedalal & Co. www.crsharedalalco.com

Form 3CA • Applicable in the case of a person who carries • Applicable in the case of a person who carries on business or profession and who is required on business or profession and who is required by or under any other law to get his accounts by or under any other law to get his accounts audited audited C.R. Sharedalal & Co. www.crsharedalalco.com

Form 3CA Open Period: Open Period: 1(a) the audited *profit and loss account / income 1(a) the audited *profit and loss account / income and expenditure account for the period beginning and expenditure account for the period beginning from ----------------------to ending on ------------------- from ----------------------to ending on ------------------- ----------. ----------. 1(b) the audited balance sheet as at, _____; and 1(b) the audited balance sheet as at, _____; and • Period instead of year • Period instead of year • 31 st March removed. • 31 st March removed. • New business or business discontinued • New business or business discontinued C.R. Sharedalal & Co. www.crsharedalalco.com

Form 3CA Space for Observations - Qualifications: Space for Observations - Qualifications: 3. In *my / our opinion and to the best of *my / our 3. In *my / our opinion and to the best of *my / our information and according to examination of books of information and according to examination of books of account account including including other other relevant relevant documents documents and and explanations given to *me / us, the particulars given in the explanations given to *me / us, the particulars given in the said Form No.3 CD are true and correct subject to the said Form No.3 CD are true and correct subject to the following observations/qualifications, if any: following observations/qualifications, if any: a. a. b. b. • Space provided to mention observations/qualifications • Space provided to mention observations/qualifications • Utility – various drop down options including ‘others’ • Utility – various drop down options including ‘others’ Space of 1000 characters including spaces Space of 1000 characters including spaces • Notes pertaining to TDS, 40A(3), 269SS/T, Books of account • Notes pertaining to TDS, 40A(3), 269SS/T, Books of account verification can be added here verification can be added here C.R. Sharedalal & Co. www.crsharedalalco.com