After hectic Tax Audit times, for AY 2022-23, now it’s time for some Tax Audit Fun Moments. So, in this Blog I am presenting some hilarious Tax Audit QAs/visualisations conceived and visualised by me, which will help You in understanding all important reporting clauses in the Form 3CD Annexure in the Tax Audit Report (TAR), in a funny yet purposeful and useful manner.

1. Clause 44 of TAR

Tax Auditor to an ‘Expense’ head: Why are you so upset & angry?

Expense head: I am upset as earlier we all were united under one head. Now you are trying to break us & divide into GST registered/unregistered/composite dealer/ exempt heads, knowing fully that my breakup will not determine my allowability in ITR.

Clause 44 of TAR requires Reporting in the below format:

S.No. Total amount of Expenditure incurred during the year Expenditure in respect of entities registered under GST Expenditure relating to Entities not registered under GST
Relating to goods or services exempt from GST Relating to entities falling under Composition Scheme Relating to Other Registered Entities Total Payment to Registered Entities
(1) (2) (3) (4) (5) (6) (7)

2. Clause 8 of TAR

Que: Why did detective Byomkesh Bakshi get a notice from Income Tax Department?

Ans. Because he has not got his books of accounts tax audited for his consultancy receipts. [Section 271B of Income Tax Act & Clause 8 of TAR].

3. Clause 8a of TAR

Que: Why did Iron Man get a ‘New-Pinch’ from his Tax Auditor?

Ans: Because he has opted for the New Tax Regime [Clause 8a of TAR].

Clause 8 & 8a of TAR requires reporting in below manner: 

08 Indicate the relevant clause of section 44AB under which the audit has been conducted Relevant clause of section 44AB under which the audit has been conducted
08a Whether the assessee has opted for taxation under section 115BA/115BAA/115BAB/115BAC/115BAD? No

 4. Clause 21(b) & 34 of TAR

Que: Why did “Daya-bhav” Foundation, get a qualification in its Tax Audit Report?

Ans: Because guided by its ‘daya-bhav’ philosophy, it didn’t deduct TDS on salary of its employees & other payments. [Clause 21(b) & 34 of TAR].

Clause 21(b) of TAR requires reporting in below manner:

21 a) Please furnish the details of amounts debited to the profit and loss account, being

 

b) Amounts inadmissible under section 40(a):
 
ii
as payment to resident referred to in sub-clause (ia)
A
B
Details of payment on which tax is not deducted:
 
Date of payment
Amou nt of paym ent
Natur e of paym ent
Name of the payee
PAN
of the payee
Aadha ar no
Coun try
Addr ess Line 1
Addre ss Line 2
Pinco de
City or Tow n or Distri
ct
Local ity or Area
Post Offic e
State
Rem arks if any:
Details of payment on which tax has been deducted but has not been paid on or before the due date specified in sub- section (1) of section 139.
 
Date of payme nt
Amo unt of pay ment
Natu re of pay ment
Nam e of the paye r
PAN
of the Paye r
Aadh aar no
Coun try
Add ress Line 1
Add ress Line 2
Pin cod e
City or Tow n or Dist rict
Local ity or Area
Post Offic e
State
Amo unt of tax dedu cted
Amo unt out of (VI)
depo
sited, if any
Rem arks if any:

 Clause 34 of TAR requires reporting in below manner:

34. (a) Whether the assessee is required to deduct or collect tax as per the provisions of Chapter XVII-B or Chapter XVII-BB, if yes please furnish:
Tax
deduction
and
collection
Account
Number
(TAN)
Section
Nature
of
payment
Total
amount
of
payment
or receipt
of the
nature specified in column
(3)
Total
amount
on which
tax was
required
to be
deducted or
collected out of (4)
Total
amount
on which
tax was
deducted
or
collected at
specified rate out of
(5)
Amount
of tax
deducted
or
collected
out of (6)
Total
amount
on which
tax was
deducted
or
collected at less than specified rate out of (7)
Amount
of tax
deducted
or
collected
on (8)
Amount of tax deducted
or collected
not deposited
to the credit
of the Central
Government out of (6) and (8)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)

(b) Whether the assessee is required to furnish the statement of tax deducted or tax collected. If yes, please furnish the details:

Tax
deduction
and
collection
Account
Number
(TAN)
Type of Form Due date for furnishing Date of
furnishing, if
furnished
Whether the statement of tax
deducted or collected contains
information about all details/
transactions which are required
to be reported. If not, please
furnish list of of details/
transactions which are not
reported.

(c) Whether the assessee is liable to pay interest under section 201(1A) or section 206C(7). If yes, please furnish:

Tax deduction and collection Account Number (TAN) Amount of interest under section 201(1A)/206C(7) is payable Amount paid out of column (2) along with date of payment.

5. Clause 29B of TAR

Que: Why did ‘Balveer’ get worried about his Tax Audit Report?

Ans: He has received a Gift from ‘Santa’, which his Tax Auditor has reported in Clause 29B in his TAR. [Section 56(2)(x)].

Clause 29B requires reporting in below manner:

29 B 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  
Nature of Income Amount Remarks if any:

6. Clause 30C of TAR

Que: Why did Shah Rukh Khan get furious with his Tax Auditor?

Ans. (strictly fictional) He has received some CCDs from Byju’s Singapore based Holding Company, as a free token of love n affection for his “YaadGAAR” contribution in Kids learning and education. [Clause 30C on GAAR].

Clause 30C of TAR requires reporting in below manner:

30 C Whether the assessee has entered into an impermissible avoidance arrangement, as referred to in section 96 during the

previous year (This Clause is kept in abeyance till 31st March,2022)

 
Nature of the impermissible avoidance arrangement Amount (in Rs) of tax benefit in the previous year arising, in aggregate, to all

parties to the arrangement

Remarks if any:

And the final one…. 

God to Tax Auditor: Dear hardworking Soul, I am happy with your devotion. Ask anything & I will grant you the same. 

my digital signature & attachments to my TAR - Image 1

my digital signature & attachments to my TAR - Image 2

Tax Auditor: Dear God, please give me the special power that my digital signature & attachments to my TAR get uploaded glitch free.

God (puzzled): Vatsa, that is not in my hands, please consult Infosys…

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Author Bio

Qualification: CA in Practice
Company: TaxAaram India Pvt Ltd & S M Mohanka & Associates
Location: New Delhi, New Delhi, IN
Member Since: 28 Jan 2018 | Total Posts: 80
Hi there!! I am Mayank Mohanka, FCA, Founder Director in TaxAaram India Pvt Ltd & Senior Partner in M/s S M Mohanka & Associates. Philosophy of Life: There is one thing which is more powerful than your Nav Grahas & that is Your Will Power.. I can be reached at mayankmohanka@gmail.com View Full Profile

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