Article explains Why it seems impossible to report accurate / reliable details in clause no. 44 of Form No. 3CD (Tax Audit Report)
Though it’s different thing that clause no. 44 of Form No. 3CD doesn’t seem to be justified when we look it from the angle of Income Tax law, here are some concrete reasons which makes it nearly impossible to report these details under this clause.
1. At the time of account opening in the software, dealers may not have been classified as regular or composition or unregistered in 100% correct manner.
2. No such ready-made reliable report might be available from the accounting software that the assessee might be using.
3. Dealers may have opted in or opted out from the composition scheme at any point of time during the period under the audit, regarding which an assessee might not have any information.
4. Dealers may have taken GST registration or may have got unregistered itself at any point of time during the period under the audit, regarding which an assessee might not have any information.
5. The term expenditure is getting mixed with the term supply by some people / professional bodies which causes unnecessary confusions amongst the accountants and tax professionals. Expenditure is the act of spending money which has rationally nothing to do with the term supply which is defined under the GST law.
In light of the factors mentioned above which are noticed by the author and many yet unnoticed factors by the author but noticed by the other rationale people, following are some of the questions which may arise in the mind of all prudent people.
1. Is it advisable to report about this clause?
2. In absence of ability to provide 90% to 100% correct bifurcation, is there any meaning of giving a misleading bifurcation of such matters in a haphazard manner in the audit report just for a sake of reporting?
3. What is the real intention of authorities to asks for such GST related details in the Income Tax audit report?
4. Doesn’t it seem that the said clause must be scraped from initio to save the precious time of business fraternity and professionals so that it can be applied to report about other relevant points of form no. 3CD in more precise manner?
Though CBDT itself should scrap this clause, it’s even a duty of trade associations to report such matters to Finance Ministry and if the solution is not provided in time, then even reporting such matters to the PMO.
Disclaimer: This is not an opinion to anyone and author is / will not be responsible to anyone for any matter whatsoever regarding any reliance placed on this article and / or any action taken by anyone based on any matter written in this article. This is merely a genuine attempt to resolve this confusion which is of the great importance at present and wasting precious time of the assessees and consultants in this hectic schedule of statutory deadlines.
Author Bio
“….impossible to report accurate details…”<?
The write-up authored by CA in practice , displayed on the website of calbindindia Is seen to provide reasonable clarity on the above -mentioned apprehension; premised so, there appears to be no need for angst on the part of reporting CA. 😁
For that matter, as is the admitted /indisputable position, it is the auditee’s primary responsibility to keep/maintain proper records and furnish the necessary details correct and complete in all material respects . Further, the tax audit report is actually to be issued post statutory financial audit and in reference thereto; not independently. Premised so, any insufficiency of a material nature can always be covered by a suitable ‘qualificatory note’ and /or in a letter to the management < Any contrarian view or other genuine problem ?!
courtesy
IT SEEMS THAT YOU MIGHT NOT HAVE READ THE REASONS IN THIS ARTICLE AT THE TIME OF WRITING THIS COMMENT, BUT HAVE ONLY READ THE TITLE.
Income tax has nothing to do with such details, it is GST department may require it for assessment purpose.