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

drindani@rindani.in

(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?

54

Thank you!

CA Deepak M. Rindanidrindani@rindani.in