Central
Board of Direct Taxes ‘CBDT’ has recently withdrawn the old format of Form 3CD (i.e.
Annexure of Tax Audit report under section 44AB of the Income tax Act 1961) and
introduced new Format in which some changes have been incorporated. Here I have
made an effort to enlist the changes which have to be additionally reported
while preparing the Tax Audit Report:
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(1)
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Part –A –Clause 4
Registration number in case of indirect tax liability:
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If Assessee is liable to pay indirect taxes like excise duty,
service tax, sales tax, customs duty, etc., he shall furnish his Registration
number or any other identification number allotted to them.
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(2)
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Part –A –Clause 8
Relevant clauses of section 44AB:
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Now it is required to mention that under which clauses of
section 44AB, assessee has to get his Books of Accounts audited.
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(3)
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Part –B –Clause 11(b)
Location at which books of account are kept:
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Earlier there was requirement to give list of Books of
Accounts kept by the Assessee but now details of the address at which books
of account of assessee have been kept, has to be reported in the report.
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(4)
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Part –B –Clause 11(c)
Nature of documents examined by the auditor:
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The auditor is required to specify the nature of documents
examined by him in the course of tax audit.
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(5)
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Part –B –Clause 13 and
14
Change in method of accounting/ Stock Valuation and its Impact
on increase or decrease of Profit:
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A tabular format is specified for reporting of financial
impact of changes in method of accounting and method of stock valuation as
below:-
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(6)
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Part –B –Clause 17
Transfer of land/building for less than stamp duty value as
referred in section 43CA or Sec- 50C:
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Details of land or building transferred by assessee for less
than stamp duty value shall be reported in the Format
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(7)
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Part –B –Clause 19
Deduction allowable under Sections 32AC/35AD/35CCC/35D:
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Deductions allowable under sections 32AC, 35AD, 35CCC and
35DDD are also required to be reported in revised Form No. 3CD
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(8)
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Part –B –Clause 21
Disallowances:
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Earlier inadmissible payments were required to be reported
only when these are debited in P& A/C but now new Form 3CD requires
reporting of following disallowable payments, even if they are not debited to profit and loss account:
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(i)
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Disallowance for TDS default under Section 40(a)
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(ii)
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Disallowance for cash payments under section 40A(3)
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(iii)
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Disallowance for provision for gratuity under section 40A(7)
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(iv)
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Disallowance under Section 40A(9)
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(v)
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Particulars of any liability of a contingent nature
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(vi)
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Amount of deduction inadmissible under section 14A
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(vii)
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Interest inadmissible under the proviso to section 36(1)(iii)
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(9)
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Part –B –Clause 24
Deemed income under Section 32AC:
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Section 32AC of the Act provides for investment allowance of
15% for investment in plant and machinery. New form provides for reporting of
deemed income which results from sale or transfer of new asset, (if asset was
acquired and installed by the assessee for the purpose of claiming deductions
under Section 32AC) within a period of five years from the date of its
installation.
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(10)
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Part –B –Clause 28
Receipt of unlisted shares:
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A new clause is
inserted in the Form 3CD which requires reporting of all unlisted shares
which were received by assessee either for inadequate consideration or
without consideration in view of section 56(2)(viia)
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(11)
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Part –B –Clause 29
Issue of shares above fair market value:
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A new clause is
inserted in the Form 3CD which requires reporting of all transactions of
issue of shares where consideration received by assessee exceeds its fair
market value in view of section 56(2)(viib).
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(12)
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Part –B –Clause 32 (c)
Speculation losses:
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New Form No. 3CD requires to report losses from speculation
business as referred to in Section 73.
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(13)
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Part –B –Clause 32 (d)
Losses from business specified under section 35AD:
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Assessee shall furnish details of losses incurred as referred
to in Section 73A in respect of specified businesses mentioned in Section
35AD.
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(14)
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Part –B –Clause 33
Reporting of deductions claimed under Chapter III (i.e.
Section 10A and 10AA :
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If any deduction has been claimed by assessee under Sections
10A and 10AA then it shall be reported in new Form No. 3CD.
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(15)
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Part –B –Clause 34 (a)
Compliance with TCS provisions:
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Old Form 3CD required reporting on compliance with TDS
provisions only. However, New Form No. 3CD requires reporting on compliance
with TCS provisions as well.
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(16)
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Part –B –Clause 34 (b)
Filing of TDS/TCS statements:
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The tax auditor shall report on the compliance by the assessee
with the provision of furnishing of TDS or TCS statement within prescribed
time under the Act.
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(17)
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Part –B –Clause 34 (c)
Assessee-in-default:
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If assessee is deemed as an assessee-in-default and he is
liable to pay interest under Section 201(1A) or 206C(7), the tax auditor
shall furnish the TAN of assessee, interest payable and interest actually
paid.
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(18)
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Part –B –Clause 36
Dividend Distribution Tax:
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Revised Form No. 3CD requires reporting of following
reductions as referred to in clause (i) and clause (ii) of Section 115-O(1A):
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i)
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Dividend received by domestic company from its subsidiary, and
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ii)
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The amount of dividend paid to any person for or on behalf of
the New Pension System Trust referred to in Section 10(44).
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(19)
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Audits under different law
Part –B –Clause 37
Cost audit: Old Form No. 3CD required
reporting only when statutory cost audit was carried out under Section 233A
of the Companies Act, 1956. However, the 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.
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Part –B –Clause 38
Cost Audit under Central Excise Act:
The requirement of attachment of copy of cost audit report along
with Form has been substituted with reporting of qualifications in cost audit
report .
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Part –B –Clause 39
Special Audit under Service Tax: If any service-tax audit is carried out in relation to
valuation of taxable services, the tax auditor shall report any
qualifications made in relation to valuation of taxable services.
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(20)
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Part –B –Clause 40
Ratios:
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Unlike old form which required reporting of certain ratios
pertaining to current year only, the new Form requires reporting of ratios of
preceding financial year as well. Further, total turnover is to be reported
for the previous year as well as for preceding financial year.
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(21)
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Part –B –Clause 41
Demand raised or refund issued:
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The new Form seeks details of demand raised or refund issued
under any tax laws (other than Income Tax Act, 1961 and Wealth Tax Act, 1957)
along with details of relevant proceedings.
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Please refer original Form 3CD for more clear wording for reporting purpose .
