CA Sunil Dandekar
The extension of date for obtaining and submitting the Tax Audit Report till 30th November 2014 for the Assessment Year 2014-15 without extending the due date to file the Return of Income has created many concerns in the minds of Chartered Accountants.
The Income Tax Return formats also now modified to include the new row asking “if liable for Tax Audit u/s 44AB is YES, whether the accounts have been audited by the Accountant ? If YES, furnish the following information” clearly indicating that the return of income needs to be filed before 30th September, 2014 and can be filed without filing of Audit Report.
Various concerns are raised regarding how to complete the Income Tax Return without completing the Audit Report. If we analysis the Tax Audit Report Format, we can divide the clauses under main four categories comprising of Basic Information, Information regarding Accounts and Accounting Policies, Information relating to Income Computation and Other Information.
To finalise the Income Tax Return, we need to concentrate mainly on the 3rd category which ask for information relating to Income Computation which covers the following clauses –
| Sr.No. | Clause No. | Particulars |
| 1 | 12 | Whether Profit and Loss Account includes profit assessable on presumptive basis |
| 2 | 15 | Capital Assets converted into Stock in Trade |
| 3 | 16 | Amounts not credited to Profit and Loss Account |
| 4 | 17 | Whether land and Building transferred during year |
| 5 | 18 | Depreciation allowable |
| 6 | 19 | Amounts debited to Profit and Loss and admissible under Income Tax |
| 7 | 20(a) | Sum paid to employees as bonus or commission otherwise payable as profits or dividend |
| 8 | 20(b) | Contributions received from employees under various Schemes |
| 9 | 21(a) | Details of debited to Profit and Loss such as Personal, Capital, Advertisement expenses |
| 10 | 21(b)(i) | Amounts inadmissible u/s 40(a)(i) – Payment to Non-resident |
| 11 | 21(b)(ii) | Amounts inadmissible u/s 40(a)(ia) – Payment without TDS / Late Payment |
| 12 | 21(b) Others | Amounts inadmissible u/s 40(a) – Payments towards |
| 13 | 21( c ) | Amounts debited to Profit & Loss Account & inadmissible, with computation, under section |
| 14 | 21(d) | Disallowance or Deemed Income u/s 40A(3) / (3A) |
| 15 | 21(g) | Particulars of Liability of Contingent Nature |
| 16 | 21(h) | Expenditure disallowable u/s 14A |
| 17 | 21 & 22 | Amounts inadmissible – Payments towards |
| 18 | 23 | Particulars of Payments made to related persons 40A(2)(b) |
| 19 | 24 | Deemed Profit |
| 20 | 25 | Chargable u/s 41 with computation |
| 21 | 26 | Liabilities allowable and disallowable u/s 43B |
| 22 | 27(a) | Cenvat credit summary |
| 23 | 27(b) | Prior Period Income and Expenditure credited or debited to Profit and Loss |
| 24 | 28 | Income u/s 56(2)(viia) – Receipt of Shares without adequate consideration |
| 25 | 29 | Income u/s 56(2)(viib) – Consideration Recd in excess of FMV for issue of Shares |
| 26 | 32 | B/f Lossses |
| 27 | 33 | Deduction under Chapter III or VI-A |
Once the information on above clauses are confirmed and audited, there will be no need to revise the return after finalizing of the Audit Report. We should concentrate on compilation of the information required by these clauses and need not waste time in filling up the actual report. A Sample format of the details required for each clause is made available on http://www.meraconsultant.com
Everybody is required to suggest ways and methodology to complete the filing of income tax return without completing Audit Report which will help all to do work efficiently as well as smoothly and will not put us in a panic situation.
Section (2) (2) of The Chartered Accountant Act, 1949 says,
A member of the Institute shall be deemed “to be in practice”,
When individually or in partnership with chartered accountants [in practice], he, in consideration of remuneration received or to be received—
(i) engages himself in the practice of accountancy; or
(ii) offers to perform or performs services involving the auditing or verification of financial transactions, books, accounts or records, or the preparation, verification or certification of financial accounting and related statements or holds himself out to the public as an accountant; or
(iii) renders professional services or assistance in or about matters of principle or detail relating to accounting procedure or the recording, presentation or certification of financial facts or data; or]
(iv) renders such other services as, in the opinion of the Council, are or may be rendered by a chartered accountant [in practice]; and the words “to be in practice” with their grammatical variations and cognate expressions shall be construed accordingly.
IT IS VERY MUCH CLEAR FROM THE ABOVE INTERPRETATION ITSELF MENTIONED IN Chartered Accountant Act, 1949 that,
Practice of Chartered Accountants is restricted to “Financial Accounting” matters only… than why they are illegally involving themselves in the “Practice of Law” which is not allowed in the Act passed by the Parliament of India itself…
All the stakeholders (Advocates & BCI) must look after this intentional wrong doings by non-Advocate Institutes in the very much interest of the Legal Fraternity…
God bless Non-Advocates for doing practice in their respected areas…
– See more at: https://taxguru.in/income-tax/ca-community-files-pil-revised-tax-audit-report-delhi-hcs.html#comment-1123636
Sir, As the requirement to mention the audit date, report filing date etc as mentioned in earlier post, it does not restrict you from filing of the Income Tax Return.
Regarding the details in Tax Audit Report, the same details are required also in the case of non-audit cases which are not opting for presumptive taxation. In the case of such returns also we need to calculate the allowances and disallowances thus it is not the Tax Audit Report which determines the Total Income but every assessee is required to consider all these points while filing of Income Tax Return and thus without completing the Tax Audit Report, Return of Income can not be filed is not proper.
The list of clauses relating to Computation of Income is given as reference [the points covered are every assessee is required to consider while preparing the Computation of Income] to avoid the differences which may arise and requires the revision of return.
It is not practically possible to file Income Tax Return where tax audit is mandatory, because information regarding Tax Audit required in ITR to be filled and without filling required details ITR will not be accepted by the system.
Please advise how to file Income Tax Return on or before 30th September without Tax Audit Report.
Thanking you.
Dear CA Sunil Dandekar, Excellent, The compliance of the third part of TAR about information relating to income computation mentioned by you, clearly indicates that the tax audit is the essence of the income tax return to be finalized. Equal role and view can be expressed that, at present the filing of income tax returns without the details of audit report is a clear cut violation of provision 139(9)(bb)explanation.In other words, as per the existing provisions of the Act such audit report is required to be furnished either prior to the furnishing of return or should be accompanied with the return.
Overall, unless the Hon. CBDT comes out with concrete solution, we may take the benefit of doubt, under the present ambiguous scenario.
Its best advisable to file them both before the due date of ITR as extention of TAR is meaningless as to reporting of features might not go handy with the actual sometime, and perhaps possibility of tevision may arise.
Mr. Dandekar, it really worth analysis and very timely also.
The Income Tax Return Templates have added one row asking “if liable to tax audit, whether the accounts are audited by Accountant”. It seems that introduction of this row is in consideration of the extension of Audit Report date and I think wordings are misleading and it means whether the audit of accounts is completed by Accountant.
If you select NO to this question, details such as date of audit report, date of submission of audit report, auditor name, membership no, address are not required to be filled in.
I this regard i just have one question .. What will be the audit report date and date of furnishing audit report. If we think about these two dates, we have to file Audit Report before uploading the ITR
We have to fill 2 dates.
1) Date of signing report. – It is not an issue
2)Date of FURNISHING of report- How can we predict the future date of furnishing?
Nice analysis. Its true that we should concentrate and complete the necessary aspects of TAR and upload the ITRs before 30.09.2014. Further I feel that it may not be impossible to upload the TAR also before 30.09.2014
while filing itr of tax audit firm date of audit report is mandatory
where audit report is not yet prepared
in above circumstance which date to write in audit report for filing income tax return
please guide
atul
Dear Sunil Sir,
Is it possible to file Income Tax return without Audit report on or before 30th Sept 2014.
Your article says “return of income needs to be filed before 30th September, 2014 and can be filed without filing of Audit Report”
But in ITR form when option “whether the accounts have been audited by the Accountant” is set to YES then the form does not validate without the compulsory details.
Kindly advice.
Thanking you.