MEMORANDUM HAD BEEN SEND TO CBDT AS WELL AS ICAI (PROBLEMS IN EFILLING AND UPLOADING FORM 3CD AND SUGGESTIONS)

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MEMORANDUM OF PROBLEMS IN EFILLING AND UPLOADING FORM 3CD AND SUGGESTIONS

 

PROBLEMS:

1)     There is requirement to file form 3cd online. Clients wants hard copy of form 3cd  for different purposes. So there is duplicity of work.

2)     PROBLEM OF REGISTRATION AS CA/AUTHORISED REPRESENTATIVE, IF DATE OF BIRTH OR NAME AS PER ICAI record & PAN does not match.

3)     HOW TO SUBMIT   ONLINE FORM 3CD, IF SAME ASSESSEE IS HAVING TWO BUSINESS IN TWO CITIES AUDITED BY TWO DIFFERENT CAs?

4)     AN ASSESSEE HAD PURCHASED, SAY 5000 ASSETES. HIS DETAILS OF PURCHASE ARE THERE IN SCHEDULE. ONLINE FORM 3DC AGAIN REQUIRE TO FILL EACH PURCHASE. IT IS A HUGE TASK RESULTING DUPLICACY OF WORK.

5)     EVEN ITR FILED BY LEGAL HEIR WITHOUT CERTIFICATE FROM MRO IS REJECTED.

6)     In case of non availability of quantitative details due to nature of business, how to fill up online form 3cd as relevant field do not accept our comments, it accept numeric value only ?

7)     There is requirement to submit scanned copy of b/s, p/l , schedules etc.

8)     I would like to share a problem being faced by us i.e Chartered Accountants in particular and Tax Professionals in general. Till 05.08.2013 the Resetting of password was allowed to be made by sending an e-mail tovalidate@incometaxindia.gov.in wherein we were able to retrieve the passwords on e-mail addresses other than the Registered E-Mail address. But from 06.08.2013 the revalidated passwords are being sent on only the Registered E-mail Addresses. For a salaried person the filing of ITR just means receiving the ITR-V and nothing else. He/she is not interested in getting all the paper formalities done like taking passwords from the CA or taking details like that of secret questions etc. Now if this person desires to get his ITR filed by another CA next year then he/she according to income tax department should go to the previous CA first which is totally absurd. In many cases, previous CA is not giving password and acknowledgement copy of previous filed ITR.

9)     When we open an already saved draft Audit Report (draft saved data xml file), answer to some of questions (for which yes/no buttons are given) already filled, are removed. The software has some inherent error to the extent that after a draft file is reopened at least 10 fields asking for ‘yes” or “no” has to be re-entered as many number of times one reopens the draft saved data xml file. These fields are clause nos 7(b), 8(b),9(a),10, 11(d), 12 (b), 21(note), 22(a), 22 and 23.

10) There is no option to print online tax audit report by CA 11) There is no option to revise online tax audit report by CA

DETAILS OF PROBLEM NO 2

An Assessee has two proprietorship business(both liable to tax audit-turnover exceeding 1 crore) at Kolkata & Mumbai. The tax audits has been done by two different CA.
1. How the two tax audits will be e-filed ?
2. An assessse has 2 add CA after loging into his Income Tax ID.How should he add 2 CA?
3. In ITR if an assessee has to provide details of auditor if he is liable to tax audit, but there is a place of mentioning only one CA…..How the other’s name will be provided?

4. Is it mandatory for an assessee to get his accounts audited by One CA for all his business (as PAN is one) ?

 

DETAILS OF PROBLEM NO 4

I am facing problem in filing of the I T Return of the deceased assessee. I wanted to add wife of the deceased  as the legal heir of the deceased assessee. For this purpose , after login in the id of the legal heir,  filled the details of deceased with scan copy of death certificate ,pan card copy of both with declaration of the legal heir from the survivor of the deceased assessee. After 2-3 days same was rejected by the CPC for lack of valid legal heir certificate. on telephonic discussion , they informed  that valid legal heir certificate have to obtain from the Mandal revenue office (MRO)without the same, legal heir will not be accepted by the CPC. Now my query is where is MRO office in kolkata and how to obtain the same and is there is other option to file the return online?

SUGGESTIONS FOR PROBLEM 1 : It is suggested that online Form 3cd should be very simple & physical copy of form 3cd may be attached to the form & accepted.

SUGGESTIONS FOR PROBLEM 2: INSTEAD OF WHOLE NAME & DATE OF BIRTH, IT IS SUGGESTED TO CHECK ONLY FIRST NAME & MEMBERSHIP NO. FOR THE PURPOSE OF REGISTRATION.

SUGGESTIONS FOR PROBLEM 3 : ICAI SHOULD GIVE A CLARIFICATION THAT , AS PER GUIDANCE NOTE , THESE TWO AUDIT REPORTS SHOULD BE SUBMITTED BY ANY CA.IT IS also  ADVISED TO ATTACH PHYSICAL COPIES OF BOTH TAX AUDIT REPORT TOO, FOR BETTER DISCLOSURE OF THE FACT.

SUGGESTIONS FOR PROBLEM 4: IT IS SUGGESTED THAT RELEVANT FIELD OF ONLINE FORM 3CD SHOULD BE ABLE TO ACCEPT ALPHABETS ALSO AND AUDITOR CAN WRITE AS PER ATTACHMENTS AS COMMENTS.

SUGGESTIONS FOR PROBLEM 5: THERE SHOULD BE ALTERNATIVE, WHICH CAN ALSO BE ACCEPTED.

SUGGESTIONS FOR PROBLEM 6: IT IS SUGGESTED THAT RELEVANT FIELD OF ONLINE FORM 3CD  SHOULD BE ABLE TO ACCEPT ALPHABETS ALSO AND AUDITOR CAN WRITE HIS COMMENTS. Example of such comment: “due to nature & complexity of business of assessee, it is not possible to give quantitative information”

SUGGESTIONS FOR PROBLEM 7:It is suggested that as file to be uploaded is digitally signed by CA & approved by assessee, pdf copy of documents without physically sign (sd is written) may be accepted as it is accepted by MCA.

SUGGESTIONS FOR PROBLEM 8: The system of resetting of password which was allowed should be restored.

SUGGESTIONS FOR PROBLEM 9:  SUCH INHERENT ERRORS IN THE SYSTEM SHOULD BE RECTIFIED.

 

 

PRESS RELEASE: FINANCE MINISTER & CBDT HARSH ON CA FATERNITY

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PRESS RELEASE: 

FINANCE MINISTER &

CBDT HARSH ON CA FATERNITY

 
7 REASONS: WHY SHOULD CBDT EXTEND TIME

 

INSPITE OF THE REQUEST OF VARIOUS ASSOCIATIONS & CHAMBER OF COMMERCE, FINANCE MINISTER AND CBDT HAS NOT EXTENDED THE TIME LIMIT TO FILE TAR & ITR BY THE CHARTERED ACCOUNTANTS.

THE BELOW MENTIONED REASONS WILL HIGHLIGHT THE IMPACT OF SUCH DECISION OF THE FINANCE MINISTER AS WELL AS CBDT ON THE ISSUE

 

1) NOTIFICATION ISSUED TOO LATE – ONLINE FILLING OF REPORT IS A NEW SYSYEM IMPLEMENTED BY IT DEPARTMENT THIS YEAR. NOTIFICATIONS FOR THE SAME HAD BEEN ISSUED TOO LATE, I.E. IN THE MONTH OF MAY & JUNE (NOTIFICATION NO. 36 DATED 23RD MAY, 2013 & NOTIFICATION NO. 44 DATED 19TH JUNE, 2013)

 

2) WASTED TIME IN UNDERSTANDING THE SYSTEM: WE HAD WASTED SO MANY TIME IN UNDERSTANDING THE SYSTEM AS IT WAS A NEW SYSTEM.

 

3) WASTED TIME DUE TO FAULTY SYSTEM: WE HAD WASTED SO MANY TIME DUE TO FAULTY SYSTEM OF TAX AUDIT REPORT.

 

4) WASTED TIME DUE TO CHANGE IN UTILITY BY DEPARTMENT (12 TIMES): WE HAD WASTED SO MANY TIME DUE TO THE FACT THE DEPARTMENT HAD CHANGED UTILITY EVERY WEEK AND SOMETIMES TWO OR THREE TIMES IN A WEEK.

 

5) WASTED TIME TO ANALYSE THE EFFECT OF FAULTY SYSTEM: WE HAD WASTED SO MANY TIME DUE TO ANALYSING THE EFFECTS OF FAULTY SYSTEM OF THE DEPARTMENT ON VARIOUS TAX AUDIT REPORTS FILLED BY US.

 

6) MENTAL PRESSURE ON CA’S – AS A RESULT OF THE ABOVE, WE CHARTERED ACCOUNTANTS HAD UNDUE PRESSURE NOT ONLY DUE TO THE FAULTY SYSTEM OF THE CBDT BUT ALSO DUE TO THE UNCERTAINTY PREVAILED THROUGHT INDIA AMONG ALL CA’S.

 

7) MANY OF THE ISSUES HAD STILL NOT RESOLVED – 17 PROBLEMS STILL REQUIRES SYSTEM CHANGE BY IT DEPARTMENT, WHICH HAS BEEN INCLUDED SEPARATELY BELOW.

 

AS A RESULT, WE COULD HAVE COMPLETED ONLY 80-90% OF OUR WORK AND WE EARNESTLY REQUEST CBDT TO EXTEND THE TIME OF FILLING TAR AS WELL AS ITR. OTHERWISE IT WILL BE HARSH ON CA FATERNITY.

 

17 PROBLEMS STILL REQUIRES SYSTEM CHANGE BY IT DEPARTMENT – CA NITESH MORE

 

1) PROBLEM OF LEGAL HEIR CERTIFICATE: AS THERE IS SO MUCH PROBLEMS AND DELAY IN GETTING SUCH CERTIFICATE & IN MOST OF THE CASES, LOCAL REVENUE DENY TO ISSUE SUCH CERTIFICATE, WE REQUEST THAT A CERTIFICATE FROM A CA CERTIFYING THAT A PERSON IS A SURVIVING FAMILY MEMBER OF DECEASED SHOULD BE ACCEPTED.

 

2) PROBLEM OF NEGATIVE SHAREHOLDERS FUNDS IN ITR6: ITR6 DOES NOT ACCEPT NEGATIVE SHAREHOLDERS FIGURE.

 

3) “FORM 10CCB” DOES NOT CONTAIN OPTION TO CLAIM 80IE DEDUCTION. HOWEVER, IT CONTAINS 80IA, 80IB, 80IC.

 

4) ONE OF MY CLIENTS HAS MADE LATE PAYMENT OF TDS DEDUCTED , IT MEANS PROVISIONS OF TDS HAS NOT BEEN COMPLIED WITH. SO, WE HAVE TO WRITE “NO” ACCORDINGLY TO THE ANSWER OF QUESTION WHETHER TDS PROVISIONS HAVE BEEN COMPLIED WITH. BUT THERE IS NO COLUMN IN POINT NO.27, WHERE DETAILS CAN BE GIVEN. IF DETAILS ARE NOT GIVEN PAGE IS NOT BEING VALIDATED.

 

5) SUPPOSE A PROPRIETORSHIP FIRM IS SUCCEEDED BY PARTNERSHIP FIRM ON 30TH NOVEMBER, THAN TWO  B/S & TWO P/L IS TO BE PREPARED. BUT, ITR AS WELL AS FORM 3CD DO NOT TAKES PART OF YEAR.

 

6) ONE OF OUR CLIENT HAS NOT DEPOSITED P.F. DEDUCTED FROM EMPLOYEES. IN SOME OF THE MONTHS PF HAS BEEN DEPOSITED PARTLY. BUT THERE IS NO PROVISION TO ENTER AMOUNT DEPOSITED IN THE ANNEXURE FORMAT FOR THE SAME.

 

7) AN INDIVIDUAL HAVE 3 DIFFERENT BUSINESSES AUDITED BY 3 DIFFERENT CAS. HOW TO UPLOAD FORM 3CD?

 

8) IN ITR6, B/F LOSS OF LAST YEAR IS NOT ADJUSTED TO COMPUTE THE TAXABLE INCOME OF CURRENT YEAR. HOWEVER, IN ITR4, IT IS ADJUSTED.

“WE HAVE BROUGHT FORWARD BUSINESS LOSS OF THE AY 12-13 WHICH IS TO BE ADJUSTED THIS YEAR. BUT IN ITR 6 FOR AY 13-14, THE FIGURE GIVEN IN BFLA IS NOT GETTING CAPTURED WHILE CALCULATING TAX. PLEASE HELP. HOWEVER IF WE USE ITR 4, THE THIS PROBLEM DOES NOT ARISE. IN ITR 6, THE CELL IS CPLOURED AS YELLOW WHEREAS IN ITR 4, THE CELL IS COLOURED AS GREEN.
BIRENDRA SETHIA
09007160933

 

9) ANCESTRAL PAN PROBLEM I.T.RETURN SUBMISSION

MY CLIENT HAD A PAN CONTAINING ANCESTRAL I.E. 01/01/0001. I AM ABLE TO LOGIN INTO THE ACCOUNT OF PARTY BY 01/01/0001. ORIGINAL DOI 10/03/1993 WHICH I AM PUTTING IN THE IT RETURN BUT AT THE TIME OF SUBMISSION IT SAY MISMATCH IN WRONG DOB.

 

10)     THOSE WHO HAVE MORE THAN ONE UNDERTAKING SAY , 5 UNDERTAKING FOR TAKING BENEFITS U/S 80IA ARE UNABLE TO FILE FORM 10CCB AS  NO PLACE TO PROVIDE DIFFERENT INFORMATION FOR DIFFERENT UNDERTAKING.

 

11)    AS PER THE PROVISO OF SEC 32 OF THE IT ACT, DEPRECIATION IS ALLOWED TO THE AMALGAMATING COMPANY AND THE AMALGAMATED COMPANY IN THE RATIO OF THE NUMBER OF DAYS FOR WHICH THE ASSET IS USED BY THEM. BUT IN THE ITR THERE IS NO OPTION OF FEEDING DEPRECIATION FIGURES, THE DEPRECIATION FIGURES ARE AUTOMATICALLY CALCULATED ONCE THE DETAIL OF BLOCK OF ASSETS ARE FEEDED. KINDLY GUIDE HOW TO CLAIM THE CORRECT AMOUNT OF DEPRECIATION IN BOTH THE COMPANIES. 

 

12)    IN A CASE, ASSESSEE HAS TAKEN A LOAN FROM A RELATIVE WHO IS NOT HAVING PAN NO. SYSTEM IS NOT ACCEPTING ENTRY WITHOUT PAN . PLEASE CLARIFY THAT IN SUCH CASES, HOW TO FILE 3CD.

 

13)    DEP FOR POWER GENERATING UNITS IS ALLOWED TO BE CLAIMED TO STRAIGHT LINE BASIS, BUT THERE IS NO PROVISION IN ONLINE FORM 3CD FOR SUCH CLAIM. SOFTWARE AUTOMATICALLY CLAIMS DEPRECIATION AMOUNT OF WDV BASIS. THERE IS NO POSSIBILITY TO CHANGE IT MANUALLY.

 

14)    FROM: VINOD AGGARWAL <VINOD_CA2001@YAHOO.CO.IN>

OUR HUF CLIENT IS RUNNING HOSPITAL ENJOYING EXEMPTION U/S 1023C(VIA). AS PER RULES ITR 7 IS BE FILED ONLINE. HOWEVER WHILE UPLOADING THE SAME OPTION OF ITR 7 IS IS NOT MADE AVAILABLE. KINDLY HELP US IN THE MATTER. 

 

15)    THERE IS NO PAN OF FOREIGN DIRECTOR. HOW TO UPLOAD ITR WITH HIS DIGITAL SIGNATURE?

 

16)    PASSWORD NOT BEING GENERATED BY USING NEW DSC OF TRUSTEE – IN CASE OF TRUST

 

17)    AS PER PROVISION OF SECOND 35AD(7) REFERENCE OF 80IA(7) WHICH SAYS AUDIT REPORT IN  FORM NO 10CCB IS TO BE FILED . WHEREAS IN THAT FORM THERE IS NO REFERENCE OF SEC 35 AD .HOW TO FILE THE REPORT IN THE AFORESAID FORM?

 

 

DRAFT MEMORANDUM OF PROBLEMS IN EFILLING OF RETURN AND FORM 3CD AND SUGGESTIONS

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DRAFT MEMORANDUM OF PROBLEMS IN EFILLING AND UPLOADING FORM 3CD AND SUGGESTIONS PROBLEMS:

1)     There is requirement to file form 3cd online. Clients wants hard copy of form 3cd  for different purposes. So there is duplicity of work.

2)     PROBLEM OF REGISTRATION AS CA/AUTHORISED REPRESENTATIVE, IF DATE OF BIRTH OR NAME AS PER ICAI record & PAN does not match.

3)     HOW TO SUBMIT   ONLINE FORM 3CD, IF SAME ASSESSEE IS HAVING TWO BUSINESS IN TWO CITIES AUDITED BY TWO DIFFERENT CAs?

4)     AN ASSESSEE HAD PURCHASED, SAY 5000 ASSETES. HIS DETAILS OF PURCHASE ARE THERE IN SCHEDULE. ONLINE FORM 3DC AGAIN REQUIRE TO FILL EACH PURCHASE. IT IS A HUGE TASK RESULTING DUPLICACY OF WORK.

5)     EVEN ITR FILED BY LEGAL HEIR WITHOUT CERTIFICATE FROM MRO IS REJECTED.

6)     In case of non availability of quantitative details due to nature of business, how to fill up online form 3cd as relevant field do not accept our comments, it accept numeric value only ?

7)     There is requirement to submit scanned copy of b/s, p/l , schedules etc.

8)     I would like to share a problem being faced by us i.e Chartered Accountants in particular and Tax Professionals in general. Till 05.08.2013 the Resetting of password was allowed to be made by sending an e-mail to validate@incometaxindia.gov.in wherein we were able to retrieve the passwords on e-mail addresses other than the Registered E-Mail address. But from 06.08.2013 the revalidated passwords are being sent on only the Registered E-mail Addresses. For a salaried person the filing of ITR just means receiving the ITR-V and nothing else. He/she is not interested in getting all the paper formalities done like taking passwords from the CA or taking details like that of secret questions etc. Now if this person desires to get his ITR filed by another CA next year then he/she according to income tax department should go to the previous CA first which is totally absurd. In many cases, previous CA is not giving password and acknowledgement copy of previous filed ITR.

 

9)     When we open an already saved draft Audit Report (draft saved data xml file), answer to some of questions (for which yes/no buttons are given) already filled, are removed. The software has some inherent error to the extent that after a draft file is reopened at least 10 fields asking for ‘yes” or “no” has to be re-entered as many number of times one reopens the draft saved data xml file. These fields are clause nos 7(b), 8(b),9(a),10, 11(d), 12 (b), 21(note), 22(a), 22 and 23.

DETAILS OF PROBLEM NO 2

An Assessee has two proprietorship business(both liable to tax audit-turnover exceeding 1 crore) at Kolkata & Mumbai. The tax audits has been done by two different CA.
1. How the two tax audits will be e-filed ?
2. An assessse has 2 add CA after loging into his Income Tax ID.How should he add 2 CA?
3. In ITR if an assessee has to provide details of auditor if he is liable to tax audit, but there is a place of mentioning only one CA…..How the other’s name will be provided?

4. Is it mandatory for an assessee to get his accounts audited by One CA for all his business (as PAN is one) ?

Plz reply with supporting clarification, circular if any

DETAILS OF PROBLEM NO 4

I am facing problem in filing of the I T Return of the deceased assessee. I wanted to add wife of the deceased  as the legal heir of the deceased assessee. For this purpose , after login in the id of the legal heir,  filled the details of deceased with scan copy of death certificate ,pan card copy of both with declaration of the legal heir from the survivor of the deceased assessee. After 2-3 days same was rejected by the CPC for lack of valid legal heir certificate. on telephonic discussion , they informed  that valid legal heir certificate have to obtain from the Mandal revenue office (MRO)without the same, legal heir will not be accepted by the CPC. Now my query is where is MRO office in kolkata and how to obtain the same and is there is other option to file the return online?

SUGGESTIONS FOR PROBLEM 1 : It is suggested that online Form 3cd should be very simple & physical copy of form 3cd may be attached to the form & accepted.

SUGGESTIONS FOR PROBLEM 2: INSTEAD OF WHOLE NAME & DATE OF BIRTH, IT IS SUGGESTED TO CHECK ONLY FIRST NAME & MEMBERSHIP NO. FOR THE PURPOSE OF REGISTRATION.

SUGGESTIONS FOR PROBLEM 3 : ICAI SHOULD GIVE A CLARIFICATION THAT , AS PER GUIDANCE NOTE , THESE TWO AUDIT REPORTS SHOULD BE SUBMITTED BY ANY CA.IT IS also  ADVISED TO ATTACH PHYSICAL COPIES OF BOTH TAX AUDIT REPORT TOO, FOR BETTER DISCLOSURE OF THE FACT.

SUGGESTIONS FOR PROBLEM 4: IT IS SUGGESTED THAT RELEVANT FIELD OF ONLINE FORM 3CD SHOULD BE ABLE TO ACCEPT ALPHABETS ALSO, SO THAT AUDITOR CAN WRITE

SUGGESTIONS FOR PROBLEM 5: THERE SHOULD BE ALTERNATIVE, WHICH CAN ALSO BE ACCEPTED.

SUGGESTIONS FOR PROBLEM 6: IT IS SUGGESTED THAT RELEVANT FIELD OF ONLINE FORM 3CD  SHOULD BE ABLE TO ACCEPT ALPHABETS ALSO AND AUDITOR CAN WRITE HIS COMMENTS. Example of such comment: “due to nature & complexity of business of assessee, it is not possible to give quantitative information”

SUGGESTIONS FOR PROBLEM 7:It is suggested that as file to be uploaded is digitally signed by CA & approved by assessee, pdf copy of documents without physically sign (sd is written) may be accepted as it is accepted by MCA.

SUGGESTIONS FOR PROBLEM 8: The system of resetting of password which was allowed should be restored.

SUGGESTIONS FOR PROBLEM 9:  SUCH INHERENT ERRORS IN THE SYSTEM SHOULD BE RECTIFIED.

 

 

IT:TAR: HOW TO FILE REPORT WHEN AUDITED BY TWO OR MORE AUDITORS

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PROCEDURE TO UPLOAD TAR ELECTRONICALLY IN CASE OF TWO OR MORE PROPRIETORSHIP FIRM AUDITED BY DIFFERENT CAs? 

The e-filing portal allows the report to be uploaded by a single auditor. Therefore, BOTH auditors may mutually agree and decide the auditor who shall upload the report. However, all the  auditors should sign the hard copies individually.

Comment of CA Nitesh More – You have to follow the below mentioned steps:

a) Combine data of two B/S, P/L, tax audit report and submit as one

b) If tax audit conducted by two CAs, any CA can submit.

c) It is advised to attach physical copies of both Tax Audit Reports too, for disclosure of the fact that (i) two CAs have done Tax audit and (ii) that CA who is filling had relied on the work of other CA

 
 
QUERY: HOW AND WHERE TO FILE 29B, FORM 3CB-3CD ETC
REPLY:

THE PLACE WHERE YOU ARE GETTING 3CA-3CD, 7 OPTIONS ARE THERE :

 

A) 3CB-3CD

B) 3CA-3CD
C) 3CEB
D) 6B
E) 10B
F) 10BB
G) 29B
 
NOTE:
1) YOU CAN FILE FORM 29B SEPARATELY. SO U CAN FILE 7 XML FOR AN ASSESSEE, IF APPLICABLE (BUT, PRACTICALLY ALL 7 NOT APPLICABLE).
2) IF AN ASSESSEE HAS FORM 3CB-3CD AS WELL AS 3CA-3CD, HE CAN UPLOAD 2 XML.
3) HOWEVER, 

IF AN ASSESSEE HAVE TWO 3CB-3CD, THAN DATA OF 2 MUST BE ADDED AND ONE XML IS TO BE FILED. IF HE FILES 2 XMLS, THAN LAST XML WILL REVISE FIRST. SO PRACTICALLY, ONLY 1 XML CAN BE FILED.  

 

 

64 TAX AUDIT PROBLEMS AND SOLUTIONS

BY ICAI & CA NITESH MORE, KOLKATA

 

INDEX

 

TECHNICAL ISSUES

OTHER ISSUES

A. FAQ BY ICAI ON TECHNICAL ISSUES

A. FAQ BY ICAI ON OTHER ISSUES
1. Procedure to upload TAR 1. Schedules and Notes required to be uploaded?
2. Name / DOB as per ICAI & PAN should be same? 2. Scanned copy of signed BS, P&L mandatory?
3. What is recommended system requirements for facilitating e-filing? 3. Audit u/s 44AD, 44BB, 44BBB & 44AE required be filed electronically?
4. Even after filling complete details in the first page of ITR-7, one is not allowed to proceed to 2nd page. What should be done in such a case? 4. FRN mandatory in the e-forms?
5. Where should the comments of any clause of Form No.3CD is to be mentioned in the e-form?

B. FAQ BY CA NITESH MORE ON TECHNICAL ISSUES

 6. Procedure to upload TAR electronically in case of joint auditors?
1. Steps for Filling Online TAR 7. How to furnish revised audit report electronically?
2. Software Requirements 8. Is there any upper limit on the no. of audit reports which can be uploaded by a CA on e-filing portal?
3. Problem in Slowdown of System 9. If there are 10 partners in a CA firm, then how many TARs can each partner sign in a FY?
4. Problem of Negative Figures 10. If TAR is issued & ITR is filed prior to issuance of Notification which mandates e-filing of TAR, then e-filing of audit reports is required?
5. Problem of Providing Quantitative Details 11. In case of e-filing of audit reports, what is the date of audit report?
6. Problem in Entry of Large No. Of Fixed Assets 12. Is it possible to e-file the ITR first and then e-file the audit report?
7. Problem in Viewing Stock Figures
8. Problem of Depreciation in Webtel Software

B. FAQ BY CA NITESH MORE ON OTHER ISSUES
9. Problem of No Space for Commodity 1. No. of Tax Audit a CA can Sign? Issue of section 44AD
10. Problem in Calculation of NP Ratio 2. Online Filling, Date of Signing and Date of Filling
11. Problem of Blank Fields in Saved Draft Xml File 3. Can a Partner Sign On Behalf Of Other Partners?
12. Problem of Viewing Data of Xml before Uploading 4. Can Return Be Filed After Due Date
13. Problem of Printing/Saving Uploaded Xml File 5. ITR 7 to Be Filed Online?
14. Problem of Fakepath 6. Mandatory E-Filling of Trust, Society
15. Problem in Viewing Xml File from Client’s Login 7. Responsibility of Tax Auditor for Delay in Uploading
16. How to Print Uploaded Xml Files 8. Penalty for Non Furnishing of Report
17. Problem in Getting Activation Link/SMS for Completing Registration 9. Waiver of Penalty for Non Furnishing
18. Unable to See Xml in Assessee’s Login 10. Format of Maintenance of Records of Tax Audit
19. Non Acceptance of Negative Figures in Form 29B 11. Communication with Previous Auditor
20. Use of Special Characters 12. Should CA Accept Tax Audit If Undisputed Fees of Previous Auditor Not Paid
21. Problem of Non Generation of XML 13. Tar of Pvt Ltd Company
22. Problem of Swapping Of Due Date and Actual Date 14. Address for NRI Director in ITR
23. TAR Rejected By Assessee If Uploaded Again 15. Pan of Relative for Unsecured Loan
16. Return Can Be Uploaded Before TAR
To Receive Updates From Our Google Group 17. Problem of Three Tax Auditors of Same Assessee
Email A Request To moreassociate@gmail.com 18. Problem of Different Methods of Valuation of Stock in Two Firms
Also join Facebook group “CA NITESH MORE – KOLKATA” 19. Approval of Tar by Assessee Is Mandatory
By Clicking The Link – 20. How to Show Additional Depreciation
https://www.facebook.com/groups/caniteshmore/ 21. Date Of TAR Vs Date Of Furnishing TAR
  22. Format For Tax Audit U/S 44AD

 

TECHNICAL ISSUES – FAQ BY ICAI

 

1. PROCEDURE TO UPLOAD TAR

Q1. What is the complete procedure to upload tax audit reports by Tax Professionals?

Ans. The procedure of e- filing is explained at the following path of e-filing website:

https://incometaxindiaefiling.gov.in/e-Filing/Portal/StaticPDF/Registration_Services.pdf?0.2231070064008236

 

However, the procedure in brief is mentioned below:

Step- I Registration on e-filing portal Action by Chartered Accountant

a) Access www.incometaxindiaefiling.gov.in

b) Click on ‘Register Yourself’ tab and select the user type under Tax Professional as ‘Chartered Accountant’

c) Enter Basic details:

ü  Details of membership of ICAI: MRN, Enrollment date

ü  Personal Details: Surname, Middle Name, First Name, Date of Birth, PAN, E-mail id

ü  Digital Signature Certificate: upload .pfx file or USB token

ü  Click ‘Submit’

d) After successful submission of above basic details, enter details in registration form:

ü  Set Password.

ü  Set primary secret question and answer thereof.

ü  Set secondary secret question and answer thereof

ü  Enter contact details: Landline no., mobile no; alternate number; e-mail id & alternate e-mail id; Fax number

ü  Postal Address

ü  Subscribe to e-mail and alerts

ü  Captcha Code

After successful submission of all above details, the user will receive a confirmation e-mail containing an activation link. The user account will be activated as soon as the user triggers that link, thereby updating the database of Income-tax Department. An SMS will also be sent at the registered contact number of the user notifying that a confirmation mail was sent to his/her registered e-mail id.

 

Step- II Add Chartered Accountant Action by Assessee

a) Assessee is required to login into his account by entering user id and password atwww.incometaxindiaefiling.gov.in

b) Go to ‘My Account’ tab and select ‘Add CA’

c) Enter MRN of the CA. After entering correct 6 digits MRN of CA, the name of CA will automatically get prefilled.

d) Select the Form no. for which CA is supposed to be added.

e) Select Assessment Year

f) Enter the image of the Captcha code

g) Click ‘Submit’

After successful submission of above, a message will be displayed notifying the addition of CA in assessee’s profile.

 

Step- III Submit Tax Audit report Action by Chartered Accountant

After successful uploading of tax audit report, the said form will go to assessee for approval.

 

Step- IV Approval or Rejection of uploaded tax audit report

Action by Assessee

a) Login the account and navigate to ‘Work list’ tab (Assessee will be able to view list of forms submitted by Chartered Accountant along with attachment)

b) Click on ‘View Form’

c) Assessee can verify the form and approve/reject the form (other than ITR).

d) The acceptance of the form (other than ITR) by the assessee is to be made under his/her Digital Signature.

e) If assessee is rejecting the form, reason for such rejection has to be provided.

An email will be sent to the registered e-mail id after successful submission of the form along with the acknowledgement number.

 

2. NAME / DOB AS PER ICAI & PAN SHOULD BE SAME?

Q2. Whether Name / Date of Birth (DOB) of the Chartered Accountant given in PAN database (as per ITD e-filing website) is to be matched with the ICAI database for successful registration in the e-filing portal?

Ans. E-filing portal verifies the Name of Member and Date of Birth entered in Registration Form from ICAI Database and also PAN Database. In case there is difference / mismatch of details between the two Databases the portal will not allow registration. In case any member is facing such difficulty, please refer to procedure given in the following link

http://220.227.161.86/30652dtc20622.pdf

 

3. WHAT IS RECOMMENDED SYSTEM REQUIREMENTS FOR FACILITATING E-FILING?

Q3. What is recommended system requirements for facilitating e-filing?

Ans. To increase the computer processing speed all the previous versions of java be removed from the computer. To use the e-forms utility install Java Runtime Environment Version 7 update 13 (jre 1.7 is also known as jre version 7) or https://incometaxindiaefiling.gov.in

 

4. EVEN AFTER FILLING COMPLETE DETAILS IN THE FIRST PAGE OF ITR-7, ONE IS NOT ALLOWED TO PROCEED TO 2ND PAGE. WHAT SHOULD BE DONE IN SUCH A CASE?

Q4. Even after filling complete details in the first page of ITR-7, one is not allowed to proceed to second page. What should be done in such a case?

Ans. The trust should first fill the status and then PAN.

 

TECHNICAL ISSUES – FAQ BY CA NITESH MORE

 

1. STEPS FOR FILLING ONLINE TAX AUDIT REPORT

Q1. What are the steps to be followed for E-filling of Tax Audit Report?

Ans. Step 1- One Time Registration of Chartered Accountant at E-filling website

Step 2 – Login to Assessee account at e-filling website and Add CA

Step 3 – Downloading, Preparing Tax Audit Report Utility & Generating XML file.

Step 4 – Uploading XML file at E-filling website from CA’s Login Id

Step 5 – Approval of form uploaded by CA at E-filling website from Assessee’s Login Id

Step 6 – Do not forget to file Income Tax Return in Relevant ITR separately

 

2. SOFTWARE REQUIREMENTS

Q2. What are operating system and runtime environment requirement for E-filling of Tax Audit Report?

Ans. Operating System – Windows XP with Service Pack 3/ Windows 7/ Windows 8.

Runtime Environment – JRE 1.7 Update 6 and above, 32 Bit is required to run applets for offline forms to work.

 

3. PROBLEM IN SLOWDOWN OF SYSTEM

Q3. Our system becomes very slow during working on e-utility. What should we do?

Ans. Remove all old versions of Java to improve performance. Better use Google chrome. Can also use Mozilla Firefox.

 

4. PROBLEM OF NEGATIVE FIGURES

Q4. System is not accepting negative figures in brackets i.e. “()”. What should we do?

Ans. Use negative sign. i.e. minus “-“

 

5. PROBLEM OF PROVIDING QUANTITATIVE DETAILS

Q5. Due to nature and complexity of the business of the assessee, we do not have quantitative information about the stock. The software is not accepting any comment and it is accepting only numeric value. What should we do?

Ans. Kindly note that Quantitative details of only principle items is to be given. However, in my opinion, if details are not available, 

a) Write nil in online form 3CD &

b) Report why quantitative details is not provided in the following two places:

i) In paper form 3CD &

ii) Notes to accounts

c) The Following Statement Should Be Written In Paper Form 3CD As Well As Notes: “Due To Nature & Complexity of Business of Assessee, It Is Not Possible To Provide Quantitative Details”

 

6. PROBLEM IN ENTRY OF LARGE NO. OF FIXED ASSETS

Q6. An assessee had purchased, say 5000 assets. His details of purchase are there in schedule. Online form 3CD again requires filling each purchase. It is a huge task resulting duplicity of work.

Ans. In view of our time constraint, such fixed assets may be grouped into different blocks of assets and each of these groups can be further divided into 2 parts.

i. Assets put to use on or before 2nd October: For ease of entry in online form 3CD, we will argue that all assets were put to use on 2nd October, wherever possible.

ii. Assets put to use after 2nd October (eligible for half of depreciation): For ease of entry in online form 3CD, we will argue that all assets were put to use on 31st March, wherever possible.

It is also advised to attach the working of calculation of depreciation under the Income Tax act, 1961 as a schedule so that breakup of each group is easily visible to the IT department.

 

The above can be summarized in the following steps:

Step 1 – All fixed assets may be grouped into different blocks of assets.

Step 2 – Each of these groups can be further divided into 2 parts. (i) Assets put to use on or before 2nd October (ii) assets put to use after 2nd October (eligible for half of depreciation)

Step 3 – For assets brought on or before 2nd October, we can argue that those assets were put to use on 2ndOctober and accordingly relevant entries can be made in the online form 3CD.

Step 4 – For assets brought after 2nd October, we can argue that those assets were put to use on 31st March and accordingly relevant entries can be made in the online form 3CD.

Step 5 – Sale of assets for each of group should be entered in a separate row while filling online form 3CD.

Step 6 – It is also advised to attach the working of calculation of depreciation under the Income Tax act, 1961, as a schedule, so that breakup of each group is easily visible to the IT department.

 

7. PROBLEM IN VIEWING STOCK FIGURES

Q7. I filled stock details in point 28A. When after validating and saving, I reopen the form; only one stock figure is displayed.

Ans. It is the inherent problem of the software but your xml file contains the correct data. Open the xml file in Internet Explorer and check it. You can edit xml file, however you have to adopt unceremonious way to edit the xml file for the necessary correction for the item in subsequent rows of point 28A. Therefore it is advised to fill up point 28A before filling any other point from point 7 onwards.

 

8. PROBLEM OF DEPRECIATION IN WEBTEL SOFTWARE

Q8.  We have received demand relating to AY 2012-13, for almost for all companies for which income tax return were filled using Webtel software. The demand pertains to non-deduction of deprecation u/s32 in the return processed u/s 143(1) by CPC Bangalore, as claim by us in ITR 6. I just want to know if any other user of Webtel are also facing same problem.

Ans: The Problem Was Faced Many CA Using Webtel Software Due To Non Updation. I Suggest Submitting Revised Return or Making Rectification U/S 154.

 

9. PROBLEM OF NO SPACE FOR COMMODITY

Q9. In online Form 3CD, nature of business is to be mentioned i.e. Trading/Manufacturing & Retailer/ Wholesaler, but there is no space given for a particular commodity, say, cloth/ medicine/ cement. What should we do?

Ans. You can select, say, retailers & thereafter choose others (i.e. 104, 204, etc as applicable).

 

 

10. PROBLEM IN CALCULATION OF NP RATIO

Q10. If any businessman having a cloth business & also keeps photocopy machine/ agent of LIC, the income from photocopy machine / commission received from LIC is used for calculating the NP ratio. If so, then in this case GP ratio is less then NP ratio. So what to do about it?

Ans. You have to calculate NP ratio as a whole of the business for which tax audit was conducted.

 

11. PROBLEM OF BLANK FIELDS IN SAVED DRAFT XML FILE

Q11. When we reopen draft saved xml file, many fields which we had already entered is showing blank.

Ans. The software has some inherent errors as a result when we reopen draft saved xml file, it shows blank i.e. we have to re-enter the fields again. These fields are 7(B), 8(B), 9(A), 10, 11(D), 12(B), 21(Notes), 22(A), 22 AND 23.

 

12. PROBLEM OF VIEWING DATA OF XML BEFORE UPLOADING

Q12. How we can view data of XML before uploading?

Ans. You can view the xml file of tax audit report prepared in e utility of department. CA P.K. Agarwalla has prepared the screen shots of the process to view the same. The process is as follows:

Go to Programme à Microsoft Office àMicrosoft Office Access 2003/2007 à New blank data base àClick blank data base à A window with file name database1.accdb will appear on the right hand side pane. à Click on create. Your new date base is saved by default in my Documents. (You may save the same to your choice folder)

A new data base is opened. Go to and click External data à Click XML file>Browse the xml file for which you want to create/view or save the data àClick OKàImport XMLàClick OKàCheck the box “Save import steps”à Close.

Your data base is ready, on the left hand side pane the indexes for “All Tables” do appear. By clicking any Table/ any point you can easily view and save its contents presently appearing in the XML file. Once the xml file is saved and the data base is reopened it will show the updated entries lying in the XML file. If some member finds any error in the tables he can easily make corrections opening the utility.

 

13. PROBLEM OF PRINTING/SAVING UPLOADED XML FILE

Q13. There is no provision for saving or printing downloaded Forms 3CB-3CD, or XML file.

Ans.  U can save the work in middle by using “Save Draft” Button. To view the print option opens the xml file in Microsoft Access 2007 using new projects. U can find the Data in tabular form.

 

14. PROBLEM OF FAKEPATH

Q14. When we are uploading the 3CA and 3CD online one error is coming cannot read fake path file. I have placed the XML file in c drive fakepath folder and using Google chrome for that. Please help on the issue.

Ans. Kindly check the name of folder is “fakepath” and not as fake path, in C drive.

 

15. PROBLEM IN VIEWING XML FILE FROM CLIENT’S LOGIN

Q15. We uploaded form 3CD of a client. When it is viewed from the client’s login (i.e. for approving or rejecting), the dates in point no. 16(b) of form 3CD is getting interchanged (i.e. in the due dates column actual dates are seen and vice versa). But there is no mistake at our end. We have filled in the data in the income tax offline utility correctly and generated xml.

Ans. Your XML File contains the right data. Do not worry, upload it.

 

16. HOW TO PRINT UPLOADED XML FILES

Q16. CA has no option to print uploaded xml files. How to print?

Ans. CA has no option to print uploaded xml files. However, it can be printed from assessee’s login id, even before approval by assessee as the said xml file can be downloaded, from assessee’s login id, in the pdf format by default.

 

17. PROBLEM IN GETTING ACTIVATION LINK/SMS FOR COMPLETING REGISTRATION

Q17. A Chartered Accountant in practice registered himself with his DSC in the e-filing website. But he neither received any sms nor any activation link in his e-mail. When he tried again to register himself, the message was that he is already registered. But when he tried to log in, it was informed that the link is not activated. What should he do now?

Ans. Go to login page and enter your User ID i.e.  ARCA(Mem. No.) e.g. ARCA300700 and enter your Password as given then click on “Resend Activation Link”. You will get a mail from the site. If it does not work then reset your Password by sending mail at validate@incometaxindia.gov.in.

 

18. UNABLE TO SEE XML IN ASSESSEE’S LOGIN

18. I had uploaded one Form 3CD, 10 days back and same was reflecting in my log in and I also received message for uploading. Now when I go to assessee log, same form is not available for validation. When I try to re-file from my log in I am getting massage that you are already submitted and assessee has not rejected/accepted.

Ans. Kindly Go to Work lists and approve it.

 

19. NON ACCEPTANCE OF NEGATIVE FIGURES IN FORM 29B

Q19. In the department utility, the point no.9 of Annexure A of Form 29B is not accepting negative figures.

Ans. Kindly Type 0, Until Such Inherent Error in Software Is Rectified By Department

 

20. USE OF SPECIAL CHARACTERS

Q20. Can we use special characters while typing address in different places of online form 3CD?

Ans. No, special characters are not allowed while typing address.

 

21. PROBLEM OF NON GENERATION OF XML

Q21. The department utility is opening the saved data and saving draft successfully but it does not generate XML file when we click generate XML file

Ans. First validate it and generate

 

22. PROBLEM OF SWAPPING OF DUE DATE AND ACTUAL DATE

Q22. I have noticed that under the Clause No. 16(b) there is an error in the utility. The columns of due date and actual date for payments as show in the utility have been reversed against the actual data being generated in the XML file. The column headers should be swapped. The same is also evident from the form being generated at the time of approval.

Ans. This is the inherent problem. Kindly do not swap the dates at the time of data entry. IT department had been communicated with such problems.

 

23. TAR REJECTED BY ASSESSEE IF UPLOADED AGAIN

Q23. If a TAR is rejected by assessee and uploaded again, then an error message comes.

Ans. This is the inherent problem. Kindly download and fill up fresh form.

OTHER ISSUES – FAQ BY ICAI

 

1. SCHEDULES AND NOTES REQUIRED TO BE UPLOADED?

Q1. Whether Schedules and Notes to Accounts are also required to be uploaded with Balance Sheet and P&L?

Form No. 3CA requires the tax auditor to annex a copy of the Statutory Audit Report along with the copy of audited Profit and Loss Account/ Income & Expenditure Account, audited Balance Sheet and documents declared by the said Act to be a part of / or annexed to the Balance Sheet and Profit and loss Account/ Income & Expenditure Account. Accordingly, the same are required to be uploaded.

With regard to Form No.3CB, the tax auditor is required to annex the audited Balance Sheet, Profit and loss account /Income & Expenditure Account along with notes to accounts and schedules, if any, forming part of Balance Sheet, Profit and loss account /Income & Expenditure Account.

 

2. SCANNED COPY OF SIGNED BS, P&L MANDATORY?

Q2. Whether it is mandatory to upload a scanned copy of signed Balance Sheet, P&L and other documents?

Balance Sheet, Profit and Loss Account in Word, Excel Format, etc signed as “sd/-” can be converted in to ‘.pdf’ file and uploaded on the portal. However, the auditor should maintain the physically signed Audited Report in his records and ensure from that there is no difference between physical report and PDF file uploaded.

 

3. AUDIT U/S 44AD, 44BB, 44BBB & 44AE REQUIRED TO BE FILED ELECTRONICALLY?

Q3. Whether audit conducted under section 44AD, 44BB, 44BBB & 44AE are required to be filed electronically?

Sections 44AD, 44BB, 44BBB & 44AE provide that in specified cases the assessee is required to get his accounts audited and furnish the report of such audit as required under section 44AB. Therefore, e-filing is applicable to such audits also.

 

4. FRN MANDATORY IN THE E-FORMS?

Q4. Where the Firm Registration No. (FRN) should be mentioned in the e-forms?

The present E-filing portal does not provide field to mention FRN, however, the department is in the process of enabling this facility. Till the utility is configured to allow entering of FRN, members need not mention their FRN.

 

5. WHERE SHOULD THE COMMENTS OF ANY CLAUSE OF FORM NO.3CD IS TO BE MENTIONED IN THE E-FORM?

Q5. Where should the comments/observations in respect of a particular clause of Form No.3CD is to be mentioned in the e-form?

Comments / observations, if any relating to the clauses may be given in Form 3CA/3CB subject to space provided therein. Alternatively, they can be uploaded as PDF file in the field ‘Upload other report’ of the portal.

 

 

6. PROCEDURE TO UPLOAD TAR ELECTRONICALLY IN CASE OF JOINT AUDITORS? 

Q6. In case tax audit is conducted by joint auditors, what is the procedure to upload tax audit report electronically?

The e-filing portal allows the report to be uploaded by a single auditor. Therefore, the joint auditors may mutually agree and decide the auditor who shall upload the report. However, all the joint auditors should sign the hard copies.

As per the ICAI’s “Guidance Note on Tax Audit u/s 44AB of the Income-tax Act, 1961”, it is possible for the assessee to appoint two or more chartered accountants as joint auditors for carrying out the tax audit, in which case, the audit report will have to signed by all the chartered accountants. As per Standards on Auditing 299 (Responsibility of Joint Auditors) issued by ICAI, normally, the joint auditors are able to arrive at an agreed report. In such case, the physical copy should be signed by all the auditors. Thereafter, any one of them may upload the report.

However, where the joint auditors are in disagreement with regard to any matters to be covered by the report, each one of them should express his own opinion through a separate report. A joint auditor is not bound by the views of the majority of the joint auditors regarding matters to be covered in the report and is required to express his opinion in a separate report in case of a disagreement. Such separate reports are also to be uploaded on the portal.

Comment of CA Nitesh More – You have to follow the below mentioned steps:

a) Combine data of two B/S, P/L, tax audit report and submit as one

b) If tax audit conducted by two CAs, any CA can submit.

c) It is advised to attach physical copies of both Tax Audit Reports too, for disclosure of the fact that (i) two CAs have done Tax audit and (ii) that CA who is filling had relied on the work of other CA

 

7. HOW TO FURNISH REVISED AUDIT REPORT ELECTRONICALLY?

Q7. What is the procedure to furnish revised audit report electronically?

In case of revision, the audit report should be given in the manner suggested by the Institute in SA-560 (Revised) “Subsequent Events”. It may be pointed out that report under section 44AB should not normally be revised. However, sometimes a member may be required to revise his tax audit report on grounds such as:

(i) Revision of accounts of a company after its adoption in annual general meeting.

(ii) Change of law e.g., retrospective amendment.

(iii) Change in interpretation, e.g. CBDT’s circular, judgments, etc.

(iv) Any other reason like system/software error requiring change in report already uploaded.

In case, where a member is called upon to report on the revised accounts, then he must mention in the revised report that the said report is a revised report and a reference should be made to the earlier report also. In the revised report, reasons for revising the report should also be mentioned.

The e-filing portal allows uploading such Revised Audit Report by the CA for the same PAN and Assessment Year.

 

8. IS THERE ANY UPPER LIMIT ON THE NO. OF AUDIT REPORTS WHICH CAN BE UPLOADED BY A CA ON E-FILING PORTAL?

Q8. Is there any upper limit on the no. of audit reports which can be uploaded by a Chartered Accountant on e-filing portal?

As per ICAI Council Guidelines No.1-CA(7)/02/2008, dated 8th August,2008, a member of the Institute in practice shall not accept, in a financial year, more than the 45 tax audit assignments under Section 44AB of the Income-tax Act, 1961. However, audits conducted under sections 44AD and 44AE shall not be included in this limit.

Since, the Income-tax Act, 1961 does not provide any limit on number of tax audits assignments which can be undertaken by a Chartered Accountant the e-filing portal does not provide any restriction. However, members are required to comply with the prescribed ceiling limits.

 

9. IF THERE ARE 10 PARTNERS IN A CA FIRM, THEN HOW MANY TARS CAN EACH PARTNER SIGN IN A FY?

Q9. If there are 10 partners in a firm of Chartered Accountants, then how many tax audits reports can each partner sign in a financial year?

As per Chapter VI of Council General Guidelines, 2008 (Tax Audit Assignments under Section 44AB of the Income Tax Act, 1961), a member of the Institute in practice shall not accept, in a financial year, more than the specified number of tax audit assignments as prescribed under Section 44AB of the Income Tax Act, 1961. The specified number of tax audit assignments under Section 44AB of the Income Tax Act, 1961 is 45.

It is further provided in Chapter VI of Council General Guidelines, 2008 that in case of firm of Chartered Accountants in practice, specified number of tax audit assignments means 45 tax audit assignments per partner of the firm, in a financial year.

Therefore, if there are 10 partners in a firm of Chartered Accountants in practice, then all the partners of the firm can collectively sign 450 tax audit reports. This maximum limit of 450 tax audit assignments may be distributed between the partners in any manner whatsoever. For instance, 1 partner can individually sign 450 tax audit reports in case remaining 9 partners are not signing any tax audit report.

It is needless to say that the tax audit assignment should be in accordance with the Standard on Quality Control (SQC) 1: Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements

 

10. IF TAR IS ISSUED & ITR IS FILED PRIOR TO ISSUANCE OF NOTIFICATION WHICH MANDATES E-FILING OF TAR, THEN E-FILING OF AUDIT REPORTS IS REQUIRED?

Q10. If tax audit report is issued and the ITR is filed prior to issuance of the Notification No. 34/2013, dated 01-05-2013 which mandates e-filing of audit reports. In such cases whether e-filing of audit reports is required?

CBDT Notification No. 34/2013 dated 1-05-2013 provides that the rules prescribed therein shall be deemed to have come into force with effect from the 1st day of April, 2013. Accordingly, even if ITR has been filed prior to issuance of said Notification, Tax Audit report is required to be e-filed separately.

11. IN CASE OF E-FILING OF AUDIT REPORTS, WHAT IS THE DATE OF AUDIT REPORT?

Q11. In case of e-filing of audit reports what is the date of audit report?

Date on which the report is physically signed by the Auditor shall be the date of audit report.

 

12. IS IT POSSIBLE TO E-FILE THE ITR FIRST AND THEN E-FILE THE AUDIT REPORT?

Q12. Is it possible to e-file the ITR first and then e-file the audit report?

E-filing of ITR and Tax Audit report are independent actions. However, it is advisable to first upload tax audit report and then file IT return.

Comment of CA Nitesh More – In my view, Date of furnishing TAR to department is to be mentioned in ITR. So TAR is to be filed first.

OTHER ISSUES- FAQ BY CA NITESH MORE

 

1. NO. OF TAX AUDIT

Q1. Whether Tax Audit Report u/s 44AD etc will be counted in the specified limits of 45 Tax Audits?

Ans. As per Council Guidelines No.1-CA(7)/02/2008, dated 8th August,2008, these will not be included and you can file unlimited such Tax Audit Reports

 

Q2. What are the limits on signing of Tax Audit Report?

Ans. As per Council Guidelines No.1-CA(7)/02/2008, dated 8th August,2008,

a) A CA can sign up to 45 Tax Audit.

b) In case of Partnership Firm, limit will be 45 / Partner.

c) Audit U/S 44AD, 44AE, 44AF will not be included in the limit. (FROM FY 2012-13, SEC 44AF ISNOT APPLICABLE)

 

2. ONLINE FILLING, DATE OF SIGNING AND DATE OF FILLING

Q3. What are the Tax Audit Reports which are to be compulsorily filed online?

Ans. As per Notification No. 34/2013 dated 01/05/2013, & Notification No. 42/2013 dated 11/06/2013, Audit reports under Sections 10 (23C) (iv), (v), (vi) or (via), 10A, 12A (1)(b), 44AB, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E or 115JB are to be filed electronically. (It covers audit report u/s 44AD, 44AE, 44AF also) (FROM FY 2012-13, SEC 44AF is not applicable)

 

Q4. Should we sign Tax Audit Report on 30th September?

Ans. As the word “before” has been used in sec. 44AB, we should not sign Tax Audit Report on 30th September. You should sign Tax Audit Report before 30th September, since the assessee is required to “obtain” Tax Audit Report before the due date i.e. 30th September.

 

Q5. Where audit is to be conducted u/s 92E, what is the last date of filling online Tax Audit Report?

Ans.  Normally, Tax Audit Report is to be submitted by 30th September. However, for these assesses Report u/s 92E as well as Tax Audit Report can be filled by 30th November.

 

 

QUESTIONS ON E-FILLING OF TAX AUDIT REPORTS

Posted on by Finhealth

Q1. What are the steps to be followed for E-filling of Tax Audit Report?

 

Ans. Step 1- One Time Registration of Chartered Accountant at E-filling website

Step 2 – Login to Assessee account at e-filling website and Add CA

Step 3 – Downloading, Preparing Tax Audit Report Utility & Generating XML file.

Step 4 – Uploading XML file at E-filling website from CA’s Login Id

Step 5 – Approval of form uploaded by CA at E-filling website from Assessee’s Login Id

Step 6 – Do not forget to file Income Tax Return in Relevant ITR separately

 

Query on Tax Audit Assignments to be Signed by CA

Posted on by Finhealth

Question: If there are 10 partners in a firm of Chartered
Accountants, then how many tax audits reports can each partner sign in
a financial year?

Answer: As per Chapter VI of Council General Guidelines, 2008
(Tax Audit Assignments under Section 44AB of the Income Tax Act,
1961), a member of the Institute in practice shall not accept, in a
financial year, more than the specified number of tax audit
assignments as prescribed under Section 44AB of the Income Tax Act,
1961. The specified number of tax audit assignments under Section 44AB
of the Income Tax Act, 1961 is 45.

It is further provided in Chapter VI of Council General Guidelines,
2008 that in case of firm of Chartered Accountants in practice,
specified number of tax audit assignments means 45 tax audit
assignments per partner of the firm, in a financial year.

Therefore, if there are 10 partners in a firm of Chartered Accountants
in practice, then all the partners of the firm can collectively sign
450 tax audit reports. This maximum limit of 450 tax audit assignments
may be distributed between the partners in any manner whatsoever. For
instance, 1 partner can individually sign 450 tax audit reports in
case remaining 9 partners are not signing any tax audit report.
It is needless to say that the tax audit assignment should be in
accordance with the Standard on Quality Control (SQC) 1: Quality
Control for Firms that Perform Audits and Reviews of Historical
Financial Information, and Other Assurance and Related Services
Engagements.

 

REPLIES TO QUERIES ON INCOME TAX

Posted on by Finhealth

QUERY: I am A Salary Person and also Buying and selling Shares on delivery
basis as well as intraday trading.Please tell me whether I am required to get my books audited by Chartered Accountant u/s 44AB of Income Tax Act, 1961, if the actual profit is less then 8% of total sales. Whether this provision is applicable to me since I am in Share Trading Transaction

REPLY: Dear Sir,If your turnover of Share transaction exceeds 100 lakhs including the profit or loss on speculation business, then your accounts should be audited u/s 44AB and in case the turnover as stated above is below the limit and vis-a- vis, the net profit from the said transaction is also less than 8% of the turnover, the you have to get the same audited u/s 44AD. This is irrespective of the fact that you are a salaried employee, this transaction fall within the definition of Business.

 

REPLIES TO QUERIES ON INCOME TAX

Posted on by Finhealth

QUERY: I am A Salary Person and also Buying and selling Shares on delivery
basis as well as intraday trading.Please tell me whether I am required to get my books audited by Chartered Accountant u/s 44AB of Income Tax Act, 1961, if the actual profit is less then 8% of total sales. Whether this provision is applicable to me since I am in Share Trading Transaction

 

REPLY: If your turnover of Share transaction exceeds 100 lakhs including the profit or loss on speculation business, then your accounts should be audited u/s 44AB and in case the turnover as stated above is below the limit and vis-a- vis, the net profit from the said transaction is also less than 8% of the turnover, the you have to get the same audited u/s 44AD. This is irrespective of the fact that you are a salaried employee, this transaction fall within the definition of Business.

 

Mandatory E filling of Tax Audit Report us 44AB

Posted on by Finhealth

​​An Assessee is liable to get his Tax Audit done by a Chartered Accountant mandatorily, if in the previous year, Person carrying on business and his total sales/ turnover exceeds Rs.1 crore. Person carrying on profession and his Gross Receipts exceed Rs.25 lakhs. Person covered under the provision of Section 44AD, 44AF, 44BB, 44BBB and claims profit lower than deemed profit.

As per Notification No.34 dated 1st May 2013, efilling of Tax Audit is mandatory from the A.Y.2013-14 onwards. As per Rule 6G, tax audit report is to be furnished in Form 3CA & Form 3CB and the particulars required to be furnished along with these tax reports should be in Form 3CD.