Income tax Department id issuing notice U/s 148 based on AIR

Following principles can be drawn from CIT Vs. Sun Engineering Works (P) Ltd.(1992) 198 ITR 297(SC) 64 Taxman 442(SC):

 (a)     ITO’s jurisdiction under this section is confined only to such income which had escaped tax. It does not extend to revising, re-opening or reconsidering the whole assessment.

(b)    The assessee can not re-agitate questions decided in the original assessment proceeding.

(c)     Initiation of reassessment proceedings does not set aside the entire assessment. However the assessee can claim expenses out of that escaped income.

(d)    Those claims which are disallowed can not be re-agitated again.

 

Also ensure time limit of sending notice…..reasons should be furnished within 6yrs from the relevant assessment yr.

 

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CARE 4:PREPARING & UPLOADING TAX AUDIT REPORT: HOW TO SUBMIT ONLINE “TWO TAX AUDIT REPORT” OF SAME ASSESSEE

CARE 4:PREPARING & UPLOADING TAX AUDIT REPORT: HOW TO SUBMIT ONLINE “TWO TAX AUDIT REPORT” OF SAME ASSESSES

1) COMBINES DATA OF TWO TAX AUDIT REPORT AND SUBMIT AS ONE

2) IF TAX AUDIT BY TWO CAs, ANY CA SHOULD SUBMIT.

3) IT IS ADVISED TO ATTACH PHYSICAL COPIES OF BOTH TAX AUDIT REPORT TOO, FOR DISCLOSURE OF THE FACT. 

 

 

CARE 3 : PREPARING & UPLOADING TAX AUDIT REPORT: Quantitative details of only principle items is to be given. However,IN MY OPINION , in case details 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 

 

EXAMPLE: 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 QUANTATIVE DETAILS”

 

 

CARE 2: PREPARING & UPLOADING TAX AUDIT REPORT:DO NOT SIGN TAX AUDIT REPORT ON 30TH SEPTEMBER

THE WORDS “BEFORE” USED IN SEC 44AB REQUIRES THAT TAX AUDIT MUST BE SIGNED BEFORE 30 TH SEPTEMBER. SEC 44AB IS REPRODUCED BELOW:

 ⁷²[Audit of accounts of certain persons carrying on business or profession.

 ⁷³44AB.  ⁷⁴Every person,—

          (a)  carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds  ^74a[forty lakh rupees] in any previous year  ⁷⁵[***]; or

          (b)  carrying on profession shall, if his gross receipts in profession exceed  ^75a[ten lakh rupees] in any  ⁷⁶[previous year; or

          (c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under  ⁷⁷[section 44AD or section 44AE or section 44AF]  ⁷⁸[or section 44BB or section 44BBB], as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any ⁷⁹[previous year,]]  ⁸⁰[***]

                The following clause (d) shall be inserted after clause (c) of section 44AB by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2011 :

          (d)  carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,

get his accounts of such previous year  ⁸¹[***] audited by an accountant before the specified date and  ⁸²[furnish by] that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed :

 ⁸³[Provided that this section shall not apply to the person, who derives income of the nature referred to in  ⁸⁴[***] section 44B or  ⁸⁵[section 44BBA], on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later :

Provided further that] in a case where such person is required by or under any other law to get his accounts audited  ⁸⁶[***], it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and  ⁸⁷[furnishes by] that date the report of the audit as required under such other law and a further report  ⁸⁸[by an accountant] in the form prescribed under this section.

Explanation.—For the purposes of this section,—

           (i)  “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;

       ⁸⁹[(ii)  “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the  ⁹⁰[30th day of September] of the assessment year.]]

 

CARE 1  : PREPARING & UPLOADING TAX AUDIT REPORT: 

Those ca, whose NAME OR DATE OF BIRTH as per ICAI and PAN is not matching, may not be able to register at income tax site. It is request to file form 49 amendment  and get data rectified in PAN immediately.Kindly also note that the day you receive a sms that your pan amendment has been approved, you will be able to register at site whether you actually receive PAN or not.

QUERY 1 :

Dear Nitesh Ji , Pl advise in case of partnership firm can only one partner sign all the reports

QUERY2:

In a partnership firm , the limit is 45 per partner or 45*number of partner. In other words, can one partner sign 60 audits and other 30 totalling to 90 for a partnership firm of two or they can individually sign not more than 45 audits.

 

ANSWER: 

1) Clause 12  OF PART ONE OF SCHEDULE ONE OF CHARTERED ACCOUNTANTS ACT ALLOWS A PARTNER TO SIGN ON BEHALF OF (i)OTHER PARTNER (ii) firm

2) SIGN CAN BE EITHER DIGITAL OR PHYSICAL

3) IN MY VIEW,PARTNER CAN SIGN FORM 3CD ETC. ON BEHALF OF OTHER PARTNER

” Clause 12  OF PART ONE OF SCHEDULE ONE OF CHARTERED ACCOUNTANTS ACT  STATES THAT A CA IN PRACTICE WILL BE GUILTY IF HE Allows a person not being a member of the Institute in practice, or a member not being his partner to sign on his behalf or on behalf of his firm, any balance-sheet, P&L A/C, report or financial statements”

 

LIMIT ON NO OF TAX AUDIT:

1) A CA CAN SING UP TO 45 TAX AUDIT. 

2) IN CASE OF PARTNERSHIP FIRM , LIMIT WILL BE 45 / PARTNER.

3) AUDIT U/S 44AD WILL NOT BE INCLUDED IN THE LIMIT. SUCH REPORT WILL ALSO BE SUBMITTED ONLINE. 

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DETAILS OF PENALTIES UNDER INCOME TAX ACT

SECTION	Nature of Failure/Default	Authority who can levy penalty	Quantum of Penalty
SECTION 158BFA(2)	a) Delay or failure in furnishing the return of total income including undisclosed income for the block period as required by notice u/s. 158BC(a) OR (b) Undisclosed Income determined by the Assessing Officer is in excess of the Undisclosed income shown in such return.	Assessing Officer or Commissioner (Appeals)	Minimum 100% & maximum 300%; in case (a) of the tax leviable in respect of the undisclosed income determined by the Assessing Officer and in case (b), of the tax leviable on the difference between the undisclosed income as determined by the Assessing Officer and the amount of undisclosed income shown in the return. (Not applicable w.e.f. 31/05/2003)
SECTION 221(1)	Default in making payment of tax within prescribed time; i.e., as required by notice u/s. 156 or wherever assessee is deemed to be in default in payment of tax.	Assessing Officer.	Such amount as directed by Assessing Officer but not exceeding the amount of tax in arrears.
SECTION 271(1)(b)	Failure to comply with the notice u/s. 115WD(2) or 115WE(2) or 143(2) or 142(1) or failure to comply with the direction u/s. 142(2A) to get the accounts audited	Assessing Officer or Commissioner or Commissioner (Appeals).	Rs. 10,000/- for each such failure.
SECTION 271(1)(c)	Concealment of particulars of income or furnishing of inaccurate particulars of such income.	Assessing Officer or Commissioner or Commissioner (Appeals).	Minimum 100% & maximum 300% of the tax sought to be evaded.
SECTION 271(1)(d)	Concealment of particulars of fringe benefits or inaccurate particulars of such fringe benefits,	Assessing Officer or Commissioner or Commissioner (Appeals).	Minimum 100% & Maximum 300% of the tax sought to be evaded.
SECTION 271(4)	Distribution of Profit by registered firm otherwise than in accordance with the partnership deed on the basis of which the firm has been registered and as a result of which partner has returned income below the real income (penalty leviable on the partner).	Assessing Officer or Commissioner (Appeals).	A sum not exceeding 150% of the difference between the tax on partner’s income assessed and income returned.
SECTION 271A	Failure to keep and maintain any such books of account and other documents as required under Section 44AA or rules made thereunder or to retain such books of account and other documents for the period specified under Income Tax Rules.	Assessing Officer or Commissioner (Appeals).	A sum of Rs. 25,000/­.
SECTION 271AA	Failure to keep and maintain any information or document in respect of international transaction as required by Section 92D(1) or (2).	Assessing Officer or Commissioner (Appeals).	2% of the value of each international transaction.
SECTION 271AAA	Undisclosed income found duringSearch initiated under section 132 on or after 1-6-2007 (Explanation to Section 271AAA)	Assessing Officer.	A sum computed @ 10% of the undisclosed income of the specified previous year. Penalty cannot be levied if all the following conditions stipulated in Section 271 AAA (2) are fulfilled. i) In the course of the search admits the undisclosed income in a statement recorded u/s.132(4) and specifies the manner in which such income has been derived. ii) Substantiates the manner in which the undisclosed income was derived and iii) Pays the taxes together with interest, in respect of such undisclosed income.
SECTION 271B	Failure to get the accounts audited as required u/s. 44AB or furnish report of such audit before the specified date mentioned in Explanation (ii) below Section 44AB.	Assessing Officer.	0.5% of the total sales, turnover or gross receipts Maximum Rs. 1,50,000/­
SECTION 271BA	Failure to furnish a report from an accountant in respect of international transaction as required u/s. 92E.	Assessing Officer.	A sum of Rs. 1,00,000/­
SECTION 271C	a) Failure to deduct whole or any part of tax at source (TDS) as required under the provisions of Chapter XVIIB or b) failure to pay whole or any part of tax u/s. 115-O or c)Failure to pay whole or any part of tax as par second proviso to section 194B	Joint Commissioner.	Amount of tax not deducted or amount of tax not so paid as the case may be.
SECTION 271CA	Failure to collect whole or any part of tax at source (w.e.f. 1st April, 2007) U/Chapter XVII-BB	Joint Commissioner.	A sum equal to the amount of tax failed to collect.
SECTION 271D	Failure to comply with the provisions of Section 269SS; i.e., by taking or accepting any loan or deposit of Rs. 20,000/- or more otherwise than by crossed account payee cheque/Draft	Joint Commissioner.	A sum equal to the amount of loan or deposit so taken or accepted.
SECTION 271E	Failure to comply with the provisions of Section 269T; i.e., repayment of any loan or deposit of Rs. 20,000/- or more otherwise than by crossed account payee cheque/draft in the name of the person who has made the loan or deposit.	Joint Commissioner.	A sum equal to the amount of loan or deposit repaid.
SECTION 271F	Failure to furnish return of income before the end of relevant assessment year as required u/ s. 139(1) or provisos to the said sub-Section.	Assessing Officer.	A sum of Rs 5,000/-.
SECTION 271FA	Failure to furnish annual information return required u/s. 285BA or failure to furnish such return within the time prescribed.	Prescribed Income Tax authority.	Rs. 100/- for every day during which failure continues.
SECTION 271FB	Failure to furnish fringe benefits return required u/s. 115WD (1) or failure to furnish such return within the time prescribed.	Assessing Officer.	Rs. 100/- for every day during which failure continues.
SECTION 271G	Failure to furnish any information or document as required by Section 92D(3) in respect of international transaction.	Assessing Officer or Commissioner (Appeals).	2% of the value of international transaction for each such failure.
SECTION 272A(1)	Failure to answer questions, sign statements or attend summons u/s. 131(1) to give evidence/ produce books of account or other documents.	Income Tax authority not lower in rank than a Joint Commissioner or a Joint Director.	Rs. 10,000/- for each such default or failure.
SECTION 272A(2)	Failure to: (a) comply with a notice u/s. 94(6); (b) give notice of discontinuance of business or profession u/s. 176(3); (c) furnish in due time any of the returns, statements or particulars mentioned in Section 133, 206 or 206C or 285B; (d) allow inspection of any register referred to in section 134 or of any entry therein or to allow copies of the same; (e) furnish return of income u/s. 139(4A)/ 139(4C) or furnish such returns within time allowed; (f) deliver copy of declaration as stated in Section 197A in due time; (g) furnish a certificate as required u/s. 203 or u/s. 206C; (h) deduct and pay tax as required u/s. 226(2); (i) furnish a statement required u/s. 192(2C); (j) to deliver in due time a copy of the declaration u/s. 206C(1A); (k) furnish quarterly statement of TDS as required u/s. 200(3) or TCS under proviso to Section 206C(3); (l) deliver the quarterly return in respect of payment of interest to residents without deduction of tax u/s. 206A(1).	Income Tax authority not lower in rank than a Joint Commissioner or a Joint Director except for failure under Clause (f) above w.r.t. Section 197A wherein the authority is with Chief Commissioner or Commissioner.	Rs.100/- per day during which default continues. However, penalty shall not exceed the amount of tax deductible or collectible in case of failure to deliver or pay declaration u/s. 197A, furnish a certificate u/s. 203 or annual return of tds/tcs u/ ss. 206 and 206C.
SECTION 272AA	Failure to comply with the provisions of Section 133B (a general survey meant for collection of information	Assessing Officer or Joint Commissioner or Assistant Director or Deputy Director.	Maximum Penalty up to Rs. 1,000/-.
SECTION 272B	Failure to comply with the provisions of Section 139A (i.e., failure to obtain PAN) or failure to quote PAN in documents and use of false PAN deliberately.	Assessing Officer.	A sum of Rs. 10,000/-.
SECTION 272BB	Failure to comply with the provisions of Section 203A (failure to obtain TAN including failure to quote the same) including quoting of false TAN.	Assessing Officer	A sum of Rs. 10,000/­.

Important Notes

1. No penalty can be levied u/s. 221(1), if the assessee proves that the default in making payment of tax was for good and sufficient reasons.

2. No order levying penalty can be passed for failure u/ss. 271(1)(b), 271A, 271AA, 271B, 271BA, 271BB, 271C, 271CA, 271D, 271E, 271F, 271FA, 271FB, 271G, 272A(1)(c)/(d), 272A(2), 272AA(1), 272B, 272BB(1)/(1A), 272BBB (1)(b), 273(1)(b), 273(2)(b)/(c). if the person or the assessee proves that there was a reasonable cause by virtue of Section 273B.

3. No penalty shall be imposed on any person unless he is properly heard or has been provided with reasonable opportunity of being heard by virtue of Section 274(1).

4. No order imposing penalty exceeding Rs. 10,000/- can be passed by the Income Tax Officer without previous approval of Joint Commissioner. Further, no order imposing penalty exceeding Rs. 20,000/- can be passed by the ACIT or DCIT without the previous approval of Joint Commissioner by virtue of Section 274(2).

5. Penalty proceedings have to be completed before the end of financial year in which the proceedings, in the course of which action for imposition of penalty is initiated, are complete, or within 6 months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later by virtue of Section 275.

6. While determining the amount of penalty, the law to be applied would be the law operative on the date when default was committed. In case of late filing of return, the default is said to be committed on the date when the return is to be filed and in case of non-compliance of notice, default is taken to be committed on the day when the date given in the notice expires.

7. An application can be made to Commissioner for reducing or waiving any penalty levied under the Income-tax Act, 1961 or for staying or compounding any proceeding for the recovery of any such penalty by virtue of Section 273A(4). In such situations, where the aggregate of such penalties exceed Rs. 1,00,000/-, then the Commissioner can exercise these powers with the previous approval of Chief Commissioner or Director-General as the case may be.

8. Explanation1 to Sec. 271(1)(c) specifies that assessee shall offer an explanation, and only on failure to offer any explanation or such explanation is found to be false, or assessee is not in a position to substantiate then it will be deemed that such person has concealed the income.

9. Explanation 4 to Sec. 271(1)(c) specifies that the amount of tax sought to be evaded also shall included reduction in the loss figure.

 

REQUIREMENT TO FILE REPORT MANUALLY WITHIN DUE DATE AND FILE ELECTRONICALLY WITHIN 31/10/2013

RELAXATION IN REQUIREMENT OF ELECTRONIC FURNISHING ONLY

REQUIREMENT TO FILE REPORT MANUALLY WITHIN DUE DATE

AND FILE ELECTRONICALLY WITHIN 31/10/2013

CBDT IN EXERCISE OF POWER UNDER SEC 119(2)(A)O F THE IT ACT, 1961 READ WITH SEC 139 AND RULE 12, HAS DECIDED TO RELAX THE REQUIREMENT OF FURNISHING THE REPORT OF AUDIT ELECTRONICALLY AS PRESCRIBED UNDER THE PROVISO TO SUB-RULE( 2) OF RULE 12 OF THE IT RULES FOR THE ASSESSMENT YEAR 2013-14 AS UNDER –

(A) THE ASSESSES,WHO ARE PRESENTLY FINDING IT DIFFICULT TO UPLOAD THE PRESCRIBED REPORTS OF AUDIT (AS REFERRED TO ABOVE) IN THE SYSTEM ELECTRONICALLY MAY ALSO FURNISH THE SAME MANUALLY BEFORE THE JURISDICTIONAL ASSESSING OFFICER WITHIN THE PRESCRIBED DUE DATE.

(B) THE SAID REPORT OF AUDIT SHOULD HOWEVER BE FURNISHED ELECTRONICALLY ON OR BEFORE 31. 10. 2013.

COMMENTS OF CA NITESH MORE –

THOSE ASSESSEE WHO ARE FACING DIFFICULTIES IN ELECTRONIC FILING ARE REQUIRED TO FURNISH THE AUDIT REOPRTS MANUALLY BEFORE THE JURISDICTIONAL ASSESSING OFFICER WITHIN THE PRESCRIBED DUE DATE AND THEREAFTER FURNISH ELECTRONICALLY ON OR BEFORE 31. 10. 2013.

STEP1 – FURNISH MANUAL AUDIT REPORT BEFORE THE JURISDICTIONAL ASSESSING OFFICER WITHIN THE PRESCRIBED DUE DATE

STEP2 – FURNISH ELECTRONICALLY ON OR BEFORE 31. 10. 2013.

 

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PREPARING & UPLOADING TAX AUDIT REPORT: DIFFICULTIES IN QUANTITATIVE DETAILS

PREPARING & UPLOADING TAX AUDIT REPORT: Quantitative details of only principle items is to be given. However,IN MY OPINION , in case details 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 

 

EXAMPLE: 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 QUANTATIVE DETAILS”

 

 

PREPARING & UPLOADING TAX AUDIT REPORT:DO NOT SIGN TAX AUDIT REPORT ON 30TH SEPTEMBER

THE WORDS “BEFORE” USED IN SEC 44AB REQUIRES THAT TAX AUDIT MUST BE SIGNED BEFORE 30 TH SEPTEMBER. SEC 44AB IS REPRODUCED BELOW:

 ⁷²[Audit of accounts of certain persons carrying on business or profession.

 ⁷³44AB.  ⁷⁴Every person,—

          (a)  carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds  ^74a[forty lakh rupees] in any previous year  ⁷⁵[***]; or

          (b)  carrying on profession shall, if his gross receipts in profession exceed  ^75a[ten lakh rupees] in any  ⁷⁶[previous year; or

          (c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under  ⁷⁷[section 44AD or section 44AE or section 44AF]  ⁷⁸[or section 44BB or section 44BBB], as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any ⁷⁹[previous year,]]  ⁸⁰[***]

                The following clause (d) shall be inserted after clause (c) of section 44AB by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2011 :

          (d)  carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,

get his accounts of such previous year  ⁸¹[***] audited by an accountant before the specified date and  ⁸²[furnish by] that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed :

 ⁸³[Provided that this section shall not apply to the person, who derives income of the nature referred to in  ⁸⁴[***] section 44B or  ⁸⁵[section 44BBA], on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later :

Provided further that] in a case where such person is required by or under any other law to get his accounts audited  ⁸⁶[***], it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and  ⁸⁷[furnishes by] that date the report of the audit as required under such other law and a further report  ⁸⁸[by an accountant] in the form prescribed under this section.

Explanation.—For the purposes of this section,—

           (i)  “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;

       ⁸⁹[(ii)  “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the  ⁹⁰[30th day of September] of the assessment year.]]

 

 

PREPARING & UPLOADING TAX AUDIT REPORT: 

Those ca, whose NAME OR DATE OF BIRTH as per ICAI and PAN is not matching, may not be able to register at income tax site. It is request to file form 49 amendment  and get data rectified in PAN immediately.Kindly also note that the day you receive a sms that your pan amendment has been approved, you will be able to register at site whether you actually receive PAN or not.

QUERY 1 : Dear Nitesh Ji , Pl advise in case of partnership firm can only one partner sign all the reports

QUERY2:

Dear Sir

  ,

In a partnership firm , the limit is 45 per partner or 45*number of partner. In other words, can one partner sign 60 audits and other 30 totalling to 90 for a partnership firm of two or they can individually sign not more than 45 audits.

 

ANSWER: 

1) Clause 12  OF PART ONE OF SCHEDULE ONE OF CHARTERED ACCOUNTANTS ACT ALLOWS A PARTNER TO SIGN ON BEHALF OF (i)OTHER PARTNER (ii) firm

2) SIGN CAN BE EITHER DIGITAL OR PHYSICAL

3) IN MY VIEW,PARTNER CAN SIGN FORM 3CD ETC. ON BEHALF OF OTHER PARTNER

” Clause 12  OF PART ONE OF SCHEDULE ONE OF CHARTERED ACCOUNTANTS ACT  STATES THAT A CA IN PRACTICE WILL BE GUILTY IF HE Allows a person not being a member of the Institute in practice, or a member not being his partner to sign on his behalf or on behalf of his firm, any balance-sheet, P&L A/C, report or financial statements”

 

LIMIT ON NO OF TAX AUDIT:

1) A CA CAN SING UP TO 45 TAX AUDIT. 

2) IN CASE OF PARTNERSHIP FIRM , LIMIT WILL BE 45 / PARTNER.

3) AUDIT U/S 44AD WILL NOT BE INCLUDED IN THE LIMIT. SUCH REPORT WILL ALSO BE SUBMITTED ONLINE. 

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QUESTIONS ON E-FILLING OF TAX AUDIT REPORTS

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

 

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QUERIES on IT and FEMA

QUERY:From A.Y. 13-14, Transfer Pricing is also applicable on domestic transaction.
Therefore, I want to know the exact rules & regulation of Transfer Pricing applicability in domestic transaction and what documents & which type of report to be prepared.

 

REPLY: With regard to reporting of TDS transactions, you can refer the revised guidance note issued by ICAI in August 2013. The copy of the same has been attached herewith.

 

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How Calculate Your Income from salary for Income Tax

Every Salaried person is always worried about his tax liability and one of the basic concern is what will be his taxable salary under income tax act, and for which he always need some consultation from tax advisors.

Generally salary has few basic components which one must know in order to calculate his taxable salary. Income Tax Return for AY 2013-14 for Salaried Person

These are Basic Salary, Dearness Allowance, House Rent Allowance (after deduction, if you are residing in rented house), Bonus, Salary in lieu of leave (Not taxable upto specified limits) and any other benefits or perquisite less deduction for entertainment allowance and professional tax. View Form 26AS TDS Deduction Status Online

 

Computation of salary Income

Basic Salary	×××××
Dearness Allowance	×××××
House Rent Allowance	×××××
Pension	×××××
Annuity	×××××
Bonus	×××××
Commission	×××××
Arrears of salary	×××××
Advances of salary	×××××
Allowances	×××××
Total		×××××
Add: Gratuity	×××××
Leave encashment	×××××
Value of perquisite	×××××
Gross Taxable salary		×××××
Less: deduction allowed u/s 16	×××××
Deduction allowed u/s 80C	×××××
Income chargeable under the head salary		×××××

 

REPLIES TO QUERIES ON INCOME TAX

QUERY: Please clarify whether Tax Audit is required for Trusts, Institutions and AOP. Special care may be taken wrt ICAI guidelines,2013 on Tax Audit.

REPLY:As per Guidance note issued by ICAI (Revised 2013), even though certain organisations whose income are not chargeable to tax, if their turnover exceeds the limit (presently 100 lakhs), they are required to get their accounts audited under section 44AB as the said section stipulates only turnover criteria and not income criteria.  

 

Steps to calculate taxable income by an individual

Given the different sources of income, depending upon the nature of income the tax treatment of the income of the individual varies :-​​

​

• In case of the income earned by the tax payer, all incomes shall be subject to taxation except:-

1. The incomes subject to exemption and
2. incomes to be included in the income of others.

• If individual is a part of a firm, in case of his share in the profits of the firm, his income is exempt (under section 10(2A) of the Act) from taxation. But with respect to his salary and interest from the firm, these are taxable as business income of the individual.
• If individual is a part of association of persons(AOP) or body of individuals(BOI), if the association or body is taxable at the maximum marginal rate (or at a higher rate), then the individuals share of profit is not taxable under the Act.

Steps to find out the taxable income of individuals:-​

​

Find out the income under the different ‘heads of income’, which include:-

• Salaries
• Income from House property
• Profits and gains of business or profession
• Capital Gains
• Income from other sources
• The income is subjected to ‘adjustment of losses’ of the current years and earlier years. The income after the adjustment of losses is the “gross total income”.
• From the gross total income the prescribed ‘deductions’ under the Income Tax Act are made.
• The balance so obtained is known as “Net Income” or Taxable Income.