Understanding Form 3CD amendments [vide notification No. 33/ 2018 dt. 20 th July, 2018] Understanding Form 3CD amendments [vide notification No. 33/ 2018 dt. 20 th July, 2018] CA. Deepak M. Rindani [email protected] (assisted by Raivat Shah)
Mar 25, 2020
Understanding Form 3CD amendments
[vide notification No. 33/ 2018 dt. 20th July, 2018]
Understanding Form 3CD amendments
[vide notification No. 33/ 2018 dt. 20th July, 2018]
CA. Deepak M. Rindani
(assisted by Raivat Shah)
Effect of Notification
▸ Effective Date is 20th August 2018
▸ Hence, applies to 3CD issued/ filed from this date
▸ Thus, reports issued and filed up to 19th August could be in present form
▸ Some changes are late; some are premature
2
▸ Effective Date is 20th August 2018
▸ Hence, applies to 3CD issued/ filed from this date
▸ Thus, reports issued and filed up to 19th August could be in present form
▸ Some changes are late; some are premature
Effect of amendments
▸ Is one month notice sufficient?
▸ Mid-year, sudden changes
▸ Sound advice of Delhi High Court to Govt., in Avinash Gupta v. UOI [2015] 378 ITR 137
▸ Revised Utility yet to be available for uploading
3
▸ Is one month notice sufficient?
▸ Mid-year, sudden changes
▸ Sound advice of Delhi High Court to Govt., in Avinash Gupta v. UOI [2015] 378 ITR 137
▸ Revised Utility yet to be available for uploading
Basic objective of 3CD reporting is changing? Amended
“true and correct” facts and figures
To enable proper computation of income with ready
figures for the assessing officer
“Opinion” element is increasing
Reporting originally meant to be based only on entries in
books
4
“true and correct” facts and figures
To enable proper computation of income with ready
figures for the assessing officer
“Opinion” element is increasing
Reporting originally meant to be based only on entries in
books
Clause 4 – Indirect Tax Registrations Amended
“Whether the assessee is liable to pay indirect tax like excise
duty, service tax, sales tax, goods and service tax, customs
duty, etc. if yes, please furnish the registration number or
GST number or any other identification number allotted for
the same.”
5
“Whether the assessee is liable to pay indirect tax like excise
duty, service tax, sales tax, goods and service tax, customs
duty, etc. if yes, please furnish the registration number or
GST number or any other identification number allotted for
the same.”
Clause 4 – Indirect Tax Registrations 6
Clause 4 –Auditors’ Responsibilities
Assess the applicable indirect taxes applicable to the assessee.
Obtain representations from the management regarding the registrations taken.
Obtain registration certificates under each law.
Mention each registration number taken for separate places under same law.
Mention GST registration number for the Head Office and all the Branches
7
Assess the applicable indirect taxes applicable to the assessee.
Obtain representations from the management regarding the registrations taken.
Obtain registration certificates under each law.
Mention each registration number taken for separate places under same law.
Mention GST registration number for the Head Office and all the Branches
Clause 4 –Reporting Format 8
Relevant Indirect Tax law which requires registration
Registration/ Identification Number
Clause 19 –Certain admissible deductions
“Amounts admissible under sections:-
32AC, 32AD, 33AB, 33ABA, 35(1)(i), 35(1)(ii), 35(1)(iia),
35(1)(iii), 35(1)(iv), 35(2AA), 35(2AB),35ABA. 35ABB, 35AC,
35AD, 35CCA, 35CCB, 35CCC, 35CCD, 35D, 35DD, 35DDA,
35E,
9
Amended
“Amounts admissible under sections:-
32AC, 32AD, 33AB, 33ABA, 35(1)(i), 35(1)(ii), 35(1)(iia),
35(1)(iii), 35(1)(iv), 35(2AA), 35(2AB),35ABA. 35ABB, 35AC,
35AD, 35CCA, 35CCB, 35CCC, 35CCD, 35D, 35DD, 35DDA,
35E,
Clause 19 - Certain admissible deductions 10
32AC Not relevant as per provisions of sec. 32AC(1B)
32AD New asset for undertaking or enterprise for manufacture orproduction in states of Telangana, Bihar, Andhra Pradesh, WestBengal – Deduction of 15% of cost of asset. [from A. Y. 16-17]
33AB Amount deposited in bank account by assessee engaged in businessof tea, coffee or rubber.
33AB Amount deposited in bank account by assessee engaged in businessof tea, coffee or rubber.
33ABA Deduction for deposit in Site Restoration Account in case of assesseeengaged in business of prospection, extraction or production ofpetroleum or natural gas
35(1)(i) Revenue expenditure for scientific research related to business
35(1)(ii) Amount paid to scientific research institution, university or college
35(1)(iia) Amount paid to company for scientific research
Clause 19 –Certain admissible deductions 11
35(1)(iii) Sum paid to institution, university, college or undertaking of researchin social science or statistical research
35(1)(iv) Capital expenditure for scientific research related to business
35(2AA) Sum paid to National Laboratory or Indian Institute of technologywith specific direction for use towards scientific research
35(2AB)35(2AB) Assessee being company engaged in business of bio-technology incursexpenditure on scientific research
35ABA Expenditure for obtaining right to use spectrum fortelecommunication services
35ABB Expenditure for obtaining license to operate telecommunicationservices
35AC Sum paid to public sector company, local authority, institution orassociation for carrying our eligible project or scheme
Clause 19 –Certain admissible deductions 12
35AD Deduction for capital expenditure for specified business
35CCA Payment to association or institution for rural development programme
35CCB Payment to association or institution for conservation of natural resourcesor afforestation
35CCC Expenditure on agricultural extension project35CCC Expenditure on agricultural extension project
35CCD Expenditure on skill development project
35D Amortization of preliminary expenses
35DD Amortization of expenses in case of amalgamation or demerger
35DDA Amortization of expenditure for Voluntary Retirement Scheme
35E Expenses towards prospecting, extraction or production of minerals, etc.
Clause 19 –Reporting Format 13
Section under which such amount is
deductible
Amount of such nature debited to profit and loss
account
Actual amount admissible as deduction as per provisions of the
Act and Rules
Actual amount admissible as deduction as per provisions of the
Act and Rules
Clause 24 –Deemed profits in certain cases 14
“Amounts deemed to be profits and
gains under section 32AC or 32AD
or 33AB or 33ABA or 33AC”
Amended
“Amounts deemed to be profits and
gains under section 32AC or 32AD
or 33AB or 33ABA or 33AC”
Clause 24 –Deemed profits in certain cases 15
32AC As per Sec. 32AC(2) – If the asset is sold or transferred except foramalgamation or demerger within five years, deduction claimed u/s 32ACshall be deemed profits under business
32AD As per Sec. 32AD(2) – If the asset is sold or transferred except foramalgamation or demerger within five years, deduction claimed u/s32AD shall be deemed profits under business
32AD As per Sec. 32AD(2) – If the asset is sold or transferred except foramalgamation or demerger within five years, deduction claimed u/s32AD shall be deemed profits under business
33AB Deductions claimed u/s 33AB deemed to be profits as per Sec.33AB(4),(5),(7),(8)
33ABA Deductions claimed u/s 33ABA deemed to be profits as per Sec.33ABA(5),(7),(8)
33AC Deductions claimed u/s 33AC deemed to be profits as per Sec. 33AC(2).
Clause 24 –Reporting Format 16
Section under which such amount is deemed
to be profit
Description of the transaction
Amount deemed to be profit under such
section
Clause 2617
In respect of any sum referred to in clauses (a),(b), (c), (d), (e), (f) or (g) of section
43B, the liability for which:—
(A) Pre-existed on the first day of the previous year and was not allowed in the assessment of any
previous year and was
(a) Paid during the previous year
(b) Not paid during the previous year
(B) Was incurred during the previous year
(a) was paid on or before due date of furnishing of return of income
(b) not paid on or before aforesaid date
Whether any indirect tax is passed through profit or loss account
Amended
In respect of any sum referred to in clauses (a),(b), (c), (d), (e), (f) or (g) of section
43B, the liability for which:—
(A) Pre-existed on the first day of the previous year and was not allowed in the assessment of any
previous year and was
(a) Paid during the previous year
(b) Not paid during the previous year
(B) Was incurred during the previous year
(a) was paid on or before due date of furnishing of return of income
(b) not paid on or before aforesaid date
Whether any indirect tax is passed through profit or loss account
Clause 2618
Clause (g) of Sec. 43B inserted from AY 17-18
reads as under :
“any sum payable by the assessee to the Indian
Railways for the use of railway assets”
[Does this disallowance cover railway freight?
s.194C does not apply to railway freight
payments]
Clause (g) of Sec. 43B inserted from AY 17-18
reads as under :
“any sum payable by the assessee to the Indian
Railways for the use of railway assets”
[Does this disallowance cover railway freight?
s.194C does not apply to railway freight
payments]
Clause 29A 19
Whether any sum of money was received by the assessee as an advance or
otherwise in course of negotiations for transfer of a capital asset, and that sum
was forfeited and the negotiations did not result into transfer of capital asset?
[Sec. 56(2)(ix)] - s. is affective from AY 15-16
If yes, details of the same:
–Nature of income
–Amount of income
New
Clause
Whether any sum of money was received by the assessee as an advance or
otherwise in course of negotiations for transfer of a capital asset, and that sum
was forfeited and the negotiations did not result into transfer of capital asset?
[Sec. 56(2)(ix)] - s. is affective from AY 15-16
If yes, details of the same:
–Nature of income
–Amount of income
Clause 29A –Auditor’s Responsibilities 20
Imp. Words: ‘capital asset’ ; ‘forfeiture’
Management representation reg. any agreement/advances received for transfer of any capital
asset
Scrutiny of outstanding Liabilities in books
Check for the forfeiture clause in the agreement of transfer entered into
Verify the document raised for receipt of such advance and forfeiture of such advance
Imp. Words: ‘capital asset’ ; ‘forfeiture’
Management representation reg. any agreement/advances received for transfer of any capital
asset
Scrutiny of outstanding Liabilities in books
Check for the forfeiture clause in the agreement of transfer entered into
Verify the document raised for receipt of such advance and forfeiture of such advance
Clause 29A –Auditor’s Concerns 21
Auditor may or may not be given information reg. existing agreements/MOU etc.
Amounts shown in books under audit to be seen; not beyond that?
Auditor has not power to verify the forfeiture with the third party, by summoning them
or requiring them to produce any document.
The transaction advance may have been forfeited mutually, but may be disclosed in the
books as not forfeited.
Auditor may or may not be given information reg. existing agreements/MOU etc.
Amounts shown in books under audit to be seen; not beyond that?
Auditor has not power to verify the forfeiture with the third party, by summoning them
or requiring them to produce any document.
The transaction advance may have been forfeited mutually, but may be disclosed in the
books as not forfeited.
Clause 29B 22
“Whether any amount is to be included as income
chargeable under the head “income from other sources”
as referred to in clause (x) of sub-section (2) of section
56? (Yes/No)”
If yes, Please furnish the following details:
(i) Nature of income
(ii) Amount (in Rs.) thereof
New
Clause
“Whether any amount is to be included as income
chargeable under the head “income from other sources”
as referred to in clause (x) of sub-section (2) of section
56? (Yes/No)”
If yes, Please furnish the following details:
(i) Nature of income
(ii) Amount (in Rs.) thereof
Clause 29B reg. sec. 56(2)(x) 23
– section applies to sums received on or after 1-4-2017 by any person exceeding the
value of Rs. 50000/-
– “immovable property” or “property” received by any person-
- without consideration, stamp value or FMV of which exceeds Rs. 50000/-
- for a consideration which is less than the stamp duty value or FMV, and such
difference exceeds Rs. 50000/-
– section applies to sums received on or after 1-4-2017 by any person exceeding the
value of Rs. 50000/-
– “immovable property” or “property” received by any person-
- without consideration, stamp value or FMV of which exceeds Rs. 50000/-
- for a consideration which is less than the stamp duty value or FMV, and such
difference exceeds Rs. 50000/-
Clause 29B–Auditor’s Responsibilities 24
scrutiny of books under audit and entries found therein
such entries may be in personal books; not business books
meaning of ‘immovable property’ and ‘property’ as defined in clause (x)
stamp duty jantri values determination
determination of FMV – new Rules 11U and UA - very significant changes from 1-7-2017
scrutiny of books under audit and entries found therein
such entries may be in personal books; not business books
meaning of ‘immovable property’ and ‘property’ as defined in clause (x)
stamp duty jantri values determination
determination of FMV – new Rules 11U and UA - very significant changes from 1-7-2017
Clause 30A –Details about primary adjustment u/ s 92CE 25
(a) Whether primary adjustment to transfer price u/s 92CE(1) has been made during
the previous year? (Yes/No)
(b) If yes, furnish the following details:
– Under which clause of sec. 92CE(1) primary adjustment is made?
– Amount (in Rs.) of such primary adjustment
– Whether excess money with associate enterprise is to be repatriated to India?
– If yes, whether the excess money has been repatriated within time period?
– If No, Amount of imputed interest income on such excess money.
New
Clause
(a) Whether primary adjustment to transfer price u/s 92CE(1) has been made during
the previous year? (Yes/No)
(b) If yes, furnish the following details:
– Under which clause of sec. 92CE(1) primary adjustment is made?
– Amount (in Rs.) of such primary adjustment
– Whether excess money with associate enterprise is to be repatriated to India?
– If yes, whether the excess money has been repatriated within time period?
– If No, Amount of imputed interest income on such excess money.
Clause 30A –Auditor’s Responsibilities26
Obtain a the details of international transactions as per sec. 92B
Identify the transactions for which a primary adjustment has been
made as per the provisions of sec. 92CE(1).
Check whether the excess funds are required to be repatriated to
India?
Obtain details of such repatriation of such funds.
Interest to be imputed as per Rule 10CB
Obtain a the details of international transactions as per sec. 92B
Identify the transactions for which a primary adjustment has been
made as per the provisions of sec. 92CE(1).
Check whether the excess funds are required to be repatriated to
India?
Obtain details of such repatriation of such funds.
Interest to be imputed as per Rule 10CB
Clause 30A –Auditor’s Concerns27
The due date of repatriation of funds as per Rule 10CB of Income-tax
Rules, 1962 is within 90 days of due date of filing of return or within
the date of order if such adjustment has been made as per sec.
92CE(1)(ii).
Hence, for the relevant assessment year, there would have been no
repatriation of funds to the assessee, thus making the reporting
ineffective.
The due date of repatriation of funds as per Rule 10CB of Income-tax
Rules, 1962 is within 90 days of due date of filing of return or within
the date of order if such adjustment has been made as per sec.
92CE(1)(ii).
Hence, for the relevant assessment year, there would have been no
repatriation of funds to the assessee, thus making the reporting
ineffective.
Clause 30B 28
Whether assessee has incurred expenditure during the previous year by way of interestor of similar nature exceeding 1 crore rupees as referred to in sec. 94B(1)? (Yes/No)
If yes, following details are to be furnished:i. Amount of expenditure by way of interest or similar nature
ii. Amount of EBITDA during previous year
iii. Amount of expenditure as per i which exceeds 30% of EBITDA as per ii above
iv. Amount of interest expenditure brought forward u/s 94B(4)
v. Amount of interest expenditure carried forward u/s 94B(4)
New
Clause
Whether assessee has incurred expenditure during the previous year by way of interestor of similar nature exceeding 1 crore rupees as referred to in sec. 94B(1)? (Yes/No)
If yes, following details are to be furnished:i. Amount of expenditure by way of interest or similar nature
ii. Amount of EBITDA during previous year
iii. Amount of expenditure as per i which exceeds 30% of EBITDA as per ii above
iv. Amount of interest expenditure brought forward u/s 94B(4)
v. Amount of interest expenditure carried forward u/s 94B(4)
A.Y. Amount
A.Y. Amount
Clause 30B - Remarks29
Section 94B is not applicable for A.Y. 2018-19.
Clause 30B(b)(i) requires reporting of total expenditure
towards interest. Clarification required as to whether
total interest expenditure is to be reported or only
which is paid to non-resident associated enterprise.
Section 94B is not applicable for A.Y. 2018-19.
Clause 30B(b)(i) requires reporting of total expenditure
towards interest. Clarification required as to whether
total interest expenditure is to be reported or only
which is paid to non-resident associated enterprise.
Clause 30C 30
Whether the assessee has entered into an impermissible avoidance
agreement, as referred to in sec. 96, during the previous year? (Yes/No)
If yes, please furnish the following:–Nature of the impermissible avoidance agreement
–Amount of tax benefit arising in aggregate to all the parties to the
arrangement, in the previous year.
New
Clause
Whether the assessee has entered into an impermissible avoidance
agreement, as referred to in sec. 96, during the previous year? (Yes/No)
If yes, please furnish the following:–Nature of the impermissible avoidance agreement
–Amount of tax benefit arising in aggregate to all the parties to the
arrangement, in the previous year.
Clause 31 31
Existing clause:
(a) Particulars of loan or deposit exceeding limit specified in
Sec. 269SS taken or accepted during the year
(b) Particulars of specified sum exceeding limit specified in
Sec. 269SS taken or accepted during the year.
Existing clause:
(a) Particulars of loan or deposit exceeding limit specified in
Sec. 269SS taken or accepted during the year
(b) Particulars of specified sum exceeding limit specified in
Sec. 269SS taken or accepted during the year.
Clause 31 32
(ba) Particulars of each receipt in an amount exceeding the limit specified in Sec. 269ST,
aggregate from a person in a day or in respect of a single transaction or in respect of
transactions relating to one event or occasion from a person, during the previous year,
where such receipt is otherwise then by a cheque, or bank draft or use of electronic
clearing system through bank account:-
(i) Name, address and PAN (if available) of the payer
(ii) nature of transaction
(iii) Amount of receipt
(iv) Date of receipt
New
Clause
(ba) Particulars of each receipt in an amount exceeding the limit specified in Sec. 269ST,
aggregate from a person in a day or in respect of a single transaction or in respect of
transactions relating to one event or occasion from a person, during the previous year,
where such receipt is otherwise then by a cheque, or bank draft or use of electronic
clearing system through bank account:-
(i) Name, address and PAN (if available) of the payer
(ii) nature of transaction
(iii) Amount of receipt
(iv) Date of receipt
Clause 31 33
(bb) Particulars of each receipt in an amount exceeding the limit specified in Sec. 269ST,
aggregate from a person in a day or in respect of a single transaction or in respect of
transactions relating to one event or occasion from a person, received by cheque or bank
draft, not being an account payee cheque or account payee bank draft, during the
previous year:-
(i) Name, address and PAN (if available) of the payer
(ii) Amount of receipt
New
Clause
(bb) Particulars of each receipt in an amount exceeding the limit specified in Sec. 269ST,
aggregate from a person in a day or in respect of a single transaction or in respect of
transactions relating to one event or occasion from a person, received by cheque or bank
draft, not being an account payee cheque or account payee bank draft, during the
previous year:-
(i) Name, address and PAN (if available) of the payer
(ii) Amount of receipt
Clause 31 34
(bc) Particulars of each payment in an amount exceeding the limit specified in Sec. 269ST,
aggregate from a person in a day or in respect of a single transaction or in respect of
transactions relating to one event or occasion from a person, where such receipt is
otherwise then by a cheque, or bank draft or use of electronic clearing system through
bank account: during the previous year-
(i) Name, address and PAN (if available) of the payer
(ii) nature of transaction
(iii) Amount of payment
(iv) Date of payment
New
Clause
(bc) Particulars of each payment in an amount exceeding the limit specified in Sec. 269ST,
aggregate from a person in a day or in respect of a single transaction or in respect of
transactions relating to one event or occasion from a person, where such receipt is
otherwise then by a cheque, or bank draft or use of electronic clearing system through
bank account: during the previous year-
(i) Name, address and PAN (if available) of the payer
(ii) nature of transaction
(iii) Amount of payment
(iv) Date of payment
Clause 31 35
(bd) Particulars of each payment in an amount exceeding the limit specified in Sec. 269ST,
aggregate from a person in a day or in respect of a single transaction or in respect of
transactions relating to one event or occasion from a person, made by a cheque or bank
draft, not being an account payee cheque or account payee bank draft during the
previous year-
(i) Name, address and PAN (if available) of the payer
(iii) Amount of payment
(iv) Date of payment
New
Clause
(bd) Particulars of each payment in an amount exceeding the limit specified in Sec. 269ST,
aggregate from a person in a day or in respect of a single transaction or in respect of
transactions relating to one event or occasion from a person, made by a cheque or bank
draft, not being an account payee cheque or account payee bank draft during the
previous year-
(i) Name, address and PAN (if available) of the payer
(iii) Amount of payment
(iv) Date of payment
Clause 31 36
(c) Particulars of each repayment of loan or deposit or any specified advance in an amount
exceeding the limit specified in Sec. 269T made during the previous year:-
(i) Name, address and PAN (if available) of the payee
(ii) Amount of repayment
(iii) Maximum amount outstanding in the account at any time during the previous year
(iv) Whether the repayment was made by cheque or bank draft or use of electronic clearing
system through a bank account
(v) in case the repayment was made by cheque or bank draft , whether the same was repaid
by an account payee cheque or account payee bank draft. (Earlier it was “taken or accepted”)
Amended
(c) Particulars of each repayment of loan or deposit or any specified advance in an amount
exceeding the limit specified in Sec. 269T made during the previous year:-
(i) Name, address and PAN (if available) of the payee
(ii) Amount of repayment
(iii) Maximum amount outstanding in the account at any time during the previous year
(iv) Whether the repayment was made by cheque or bank draft or use of electronic clearing
system through a bank account
(v) in case the repayment was made by cheque or bank draft , whether the same was repaid
by an account payee cheque or account payee bank draft. (Earlier it was “taken or accepted”)
Clause 31 37
(d) Particulars of repayment of loan or deposit or any specified advance in an amount exceeding
the limit specified in Sec. 269T received otherwise than by a cheque or bank draft or use of
electronic clearing system through bank account during the previous year:-
(i) Name, address and PAN (if available) of the payer
(ii) Repayment of loan or deposit or any specified advance otherwise than by a cheque or
bank draft or use of electronic clearing system through bank account. (earlier it was
“Amount of”)
Amended
(d) Particulars of repayment of loan or deposit or any specified advance in an amount exceeding
the limit specified in Sec. 269T received otherwise than by a cheque or bank draft or use of
electronic clearing system through bank account during the previous year:-
(i) Name, address and PAN (if available) of the payer
(ii) Repayment of loan or deposit or any specified advance otherwise than by a cheque or
bank draft or use of electronic clearing system through bank account. (earlier it was
“Amount of”)
Clause 31 38
(e) Particulars of repayment of loan or deposit or any specified advance in an amount exceeding
the limit specified in Sec. 269T received by a cheque or bank draft which is not an account
payee cheque or account payee draft during the previous year:-
(i) Name, address and PAN (if available) of the payer
(ii) Repayment of loan or deposit or any specified advance received by a cheque or bank
draft which is not an account payee cheque or account payee draft during the previous
year. (earlier it was “Amount of”)
Amended
(e) Particulars of repayment of loan or deposit or any specified advance in an amount exceeding
the limit specified in Sec. 269T received by a cheque or bank draft which is not an account
payee cheque or account payee draft during the previous year:-
(i) Name, address and PAN (if available) of the payer
(ii) Repayment of loan or deposit or any specified advance received by a cheque or bank
draft which is not an account payee cheque or account payee draft during the previous
year. (earlier it was “Amount of”)
Clause 34(b)39
Whether the assessee is required to furnish statement of tax deducted or tax collected. If
yes, furnish the following details:TAN
NumberType of Form
Due date of furnishing of
return
Actual date of furnishing, if
furnished
Whether the Form contains information about all details/ transactions which are
required to be reported. If not, furnish a list of the details/
transactions which are not reported
Amended
Whether the assessee is required to furnish statement of tax deducted or tax collected. If
yes, furnish the following details:Due date of
furnishing of return
Actual date of furnishing, if
furnished
Whether the Form contains information about all details/ transactions which are
required to be reported. If not, furnish a list of the details/
transactions which are not reported
Clause 34(b) –Auditor’ Responsibilities40
Obtain the copies of Forms filed by the assessee.
Match the same with the books of accounts.
Indentify the expenses on which TDS was liable to be deducted but was not
deducted.
Ascertain the legal position of certain disputes issues regarding applicability of
TDS provisions.
Obtain the copies of Forms filed by the assessee.
Match the same with the books of accounts.
Indentify the expenses on which TDS was liable to be deducted but was not
deducted.
Ascertain the legal position of certain disputes issues regarding applicability of
TDS provisions.
Clause 34(b) –Auditor’s Concerns41
It is not possible or practicable for the auditor to check whether each and every
transaction has been reported in the TDS forms
There could be difference of opinion regarding applicability of TDS provisions to
certain transactions – this is a widely worded clause
Format of reporting of unreported transaction not given in 3CD
It is not possible or practicable for the auditor to check whether each and every
transaction has been reported in the TDS forms
There could be difference of opinion regarding applicability of TDS provisions to
certain transactions – this is a widely worded clause
Format of reporting of unreported transaction not given in 3CD
Clause 36A42
Whether the assessee has received any amount in the nature of dividend as referred to in
Sec. 2(22)(e) ?
If yes, furnish the following details:
New
Clause
Whether the assessee has received any amount in the nature of dividend as referred to in
Sec. 2(22)(e) ?
If yes, furnish the following details:
Amount Received Date of Receipt
Clause 4243
Whether the assessee is required to furnish statement in Form 61 or Form 61A or Form
61B? (Yes/No)
If yes, furnish the following details:
New
Clause
Whether the assessee is required to furnish statement in Form 61 or Form 61A or Form
61B? (Yes/No)
If yes, furnish the following details:
ITDREIN Type of Form
Due date of furnishing
Actual date of furnishing
Whether the form contains all the information about all details/
transactions which are required to be reported. If not, please furnish a list of the details/ transactions which are not
reported
Clause 4344
Whether the assessee or its parent entity or alternate reporting entity is liable tofurnish the report as referred to in Sec. 286(2)? (Yes/No)
If yes, furnish the following details:– Whether a report has been furnished by the assessee or its parent entity or
alternate reporting entity?
– Name of the parent entity
– Name of the reporting entity
– Date of furnishing of report
New
Clause
Whether the assessee or its parent entity or alternate reporting entity is liable tofurnish the report as referred to in Sec. 286(2)? (Yes/No)
If yes, furnish the following details:– Whether a report has been furnished by the assessee or its parent entity or
alternate reporting entity?
– Name of the parent entity
– Name of the reporting entity
– Date of furnishing of report
Clause 43 –Auditor’s Concerns45
The limit for furnishing report in respect of international group has been extended
upto 12 months from the end of reporting year.
Hence the due date would not have ended by the time limit of furnishing of audit
report.
The limit for furnishing report in respect of international group has been extended
upto 12 months from the end of reporting year.
Hence the due date would not have ended by the time limit of furnishing of audit
report.
Clause 44 –Breakup of Expenditure incurred 46
“Breakup of total expenditure of entities registered
or not registered under GST”
- Should this be “of” or “on”? Is this information relevant
if the auditee-entity doesn’t require registration?
New
Clause
“Breakup of total expenditure of entities registered
or not registered under GST”
- Should this be “of” or “on”? Is this information relevant
if the auditee-entity doesn’t require registration?
Clause 44 –Reporting Format47
Sr. No.
Total Expenditure Incurred during
the year
Expenditure in respect of entities registered underGST
Expenditurerelating to entities not registered under GST
Relating to Goods or services exempt
under GST
Relating to entities
falling under composition
scheme
Relatingto Entities registered under GST
Total payment
toregistered
entities(3+4+5)
Relating to Goods or services exempt
under GST
Relating to entities
falling under composition
scheme
Relatingto Entities registered under GST
Total payment
toregistered
entities(3+4+5)
(1) (2) (3) (4) (5) (6) (7)
Clause 44 –Auditors Responsibilities48
Check Accounts and GSTR forms filed by the assessee to verify the
expenditure relating to other registered entities as well as exempt goods and
services
Obtain bifurcation of expenditure incurred
Verify the ledgers of CGST and SGST Credit availed during the year and
claimed during the year
Check Accounts and GSTR forms filed by the assessee to verify the
expenditure relating to other registered entities as well as exempt goods and
services
Obtain bifurcation of expenditure incurred
Verify the ledgers of CGST and SGST Credit availed during the year and
claimed during the year
Clause 44 – Issues and Concerns 49
No clarification regarding classification of pre-GST period expenditure (presumably pre-
GST period to be ignored)
No clarification as to what items are included and excluded for reporting under the term
‘total amount of expenditure incurred during the year.’
No clarification as to inclusion or exclusion of capital expenditure
Is this clause relevant to compute ‘total income’ under I-tax Act?
No clarification regarding classification of pre-GST period expenditure (presumably pre-
GST period to be ignored)
No clarification as to what items are included and excluded for reporting under the term
‘total amount of expenditure incurred during the year.’
No clarification as to inclusion or exclusion of capital expenditure
Is this clause relevant to compute ‘total income’ under I-tax Act?
Clause 44 – Issues and Concerns 50
Such requirement cannot be complied with in the given time frame
Shift of role of auditor to GST Audit
Isn’t this a duplication with audit under GST law?
GSTR annual return last date is Dec. end
GST audit format not yet notified
It will provide for reconciliation between books and GSTR
Such requirement cannot be complied with in the given time frame
Shift of role of auditor to GST Audit
Isn’t this a duplication with audit under GST law?
GSTR annual return last date is Dec. end
GST audit format not yet notified
It will provide for reconciliation between books and GSTR
Tax Audit approach 51
Many existing clauses require tax auditor to arrive at an ‘opinion’
(e.g. capital vs. revenue expenditure; meaning of income; date of use of asset; block of
asset classification; computation of chapter vi-a deduction etc. )
Basis of auditor’s view should be stated clearly with reliance on asseessee’s explanations,
third party opinion, evidence etc.
Need for clarificatory notes to 3CB and 3CD to be appended and uploaded to clarify
auditor’s view
Many existing clauses require tax auditor to arrive at an ‘opinion’
(e.g. capital vs. revenue expenditure; meaning of income; date of use of asset; block of
asset classification; computation of chapter vi-a deduction etc. )
Basis of auditor’s view should be stated clearly with reliance on asseessee’s explanations,
third party opinion, evidence etc.
Need for clarificatory notes to 3CB and 3CD to be appended and uploaded to clarify
auditor’s view
Tax Auditor’s ‘e-Role’ - trends 52
Forms and Filings will get wider and deeper
Increasing role in certification
Auditor in first line of fire
Importance of audit documentation and working papers
Distinction between tax auditor and assessing officer is blurring
Forms and Filings will get wider and deeper
Increasing role in certification
Auditor in first line of fire
Importance of audit documentation and working papers
Distinction between tax auditor and assessing officer is blurring
53
Interaction?Interaction?