Tax Audit Report - Form 3CA, 3CB, 3CD

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Sakshi Shah

Form 3CA
Form 3CB
Form 3CD
Tax Audit
Tax Audit Report

Index

What is a Tax Audit Report?

As per the Income Tax Act, Tax Audit as per Sec 44AB of the Income Tax Act is applicable to a business or profession in certain specified situations. Tax Audit Report is the report prepared by a Chartered Accountant in practice after auditing the books of accounts of a business. Under Tax Audit, the CA ensures whether the books of accounts are correctly prepared and the taxable income is accurately calculated as per the provisions of the Income Tax Act.

Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
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Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
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In the case of an assessee to whom Tax Audit as per Section 44AB of the Income Tax Act is applicable, here are the next steps:

Tax Audit Report – Form 3CA, 3CB, 3CD, 3CE

The format of the Audit Report is specified by the Income Tax Department with specified particulars. Form 3CA and 3CB is the statement with auditors’ information while form 3CD is the statement with details of the tax audit.

Form Name Description
Form 3CA-3CD Tax Audit Report in the case of a taxpayer having business or profession income who is mandatorily required to get accounts audited under any other Act (other than Income Tax Act)
Form 3CB-3CD Tax Audit Report in the case of a taxpayer having business or profession income who is not required to get accounts audited under any other Act (other than Income Tax Act)
Form 3CE A Tax Audit Report in the case of a taxpayer who is a Non-Resident or Foreign Company receiving a royalty or fee for technical services

Due Date to Upload Tax Audit Report

The appointed Chartered Accountant should file the Tax Audit Report in Form 3CB-3CD or Form 3CA-3CD on the Income Tax Website on or before 30th September of the Assessment Year. In the case of Form 3CE, due to file audit report is 30th November of the Assessment Year. Once the assessee approves the report, it is considered to be final.

Eg: If Tax Audit is applicable, the Report for FY 2019-20 (AY 2020-21) should be filed on or before 30th September extended to 31st October due to COVID-19.

Income Tax Audit Due Date
Find out all the important due dates related to the tax audit in this article
Read More
Income Tax Audit Due Date
Find out all the important due dates related to the tax audit in this article
Read More

Due Date for Tax Audit

Once the Chartered Accountant files the Audit Report, the assessee should approve it and file the Income Tax Return i.e. Form ITR 3 on the Income Tax Website within the prescribed due date as per the Income Tax Act.

For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 30th November 2020 for all taxpayer.
Tip
For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 30th November 2020 for all taxpayer.

 

Assessment Year Due Date
Up to AY 2019-20 30th September of Assessment Year
AY 2020-21 onwards 31st October of Assessment Year
ITR for Proprietors with Business Income
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ITR for Proprietors with Business Income
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Guidance Note on Tax Audit

The Tax Audit Report has 2 parts – Form 3CA/3CB and Form 3CD. While Form 3CA/3CB is the statement with details of auditor, Form 3CD is the Statement with particulars required to be reported as per Sec 44AB of the Income Tax Act.

Form 3CA

Clause Information
Point no.1 Name, Address & PAN of taxpayer
Name of Auditor
Law under which accounts are audited
Date of Audit Report
Period of P&L Account
Date of the Balance Sheet
Point no.2 A declaration that the Audit Report Form 3CD is attached
Point no.3 Audit Observations or Qualifications as per Form 3CD
Point no.4

Name, Address, Membership Number of Auditor
Place & Date of Sign
Stamp & Seal of Auditor

Form 3CB

Clause Information
Point no.1 Date of Balance Sheet and P&L Statement
Name, Address, and PAN of Taxpayer
Point no.2 Address where books of accounts are kept
Address of branches (if books of accounts are kept at branches)
Point no.3 Observations, Comments, Discrepancies, and Inconsistencies reported by the auditor
Declaration by the auditor of:
* Obtaining all information required for audit
* Confirming that the business has maintained proper books of accounts
* Reporting that Balance Sheet and P&L Account reflects a true and fair view of the business
Point no.4 Declaration of attaching Form 3CD along with the Audit Report Form 3CB
Point no.5 Details of the Auditor – Name, Address, Membership Number, Firm Registration Number, Date, and Place

Form 3CD

It is a detailed statement with 44 different clauses filed by the auditor reporting information related to the business and its transactions for the relevant financial year. The IT Department has prescribed Form 3CD format and utility that a CA can use for filing the audit report.

Form 3CE

Clause Information
Point no.1 Name, Address & PAN of Non-Resident
Financial Year
Point no.2 Declaration of obtaining all information and explanations for audit
Point no.3 Certification on Permanent Establishment or Fixed Place of a profession in India
Point no.4 Declaration of income from royalty or fees for technical services under Section 44DA
Point no.5 Signature and Name of Auditor with stamp and seal

In addition to Form 3CE, details of income from royalty or fees for technical services should be mentioned in an Annexure.

Penalty for not filing Form 3CD

An assessee who is liable to get books of accounts audited as per Section 44AB fails to do so, the Assessing Officer i.e. A.O. may impose a penalty under Section 271B. The penalty shall be lower of the following:

However, if the assessee can prove a reasonable cause for failure to get a tax audit done, the A.O. may not impose the penalty.

FAQs

If a taxpayer is required to do an audit under any other law, is it mandatory to do Tax Audit as per Income Tax?

Taxpayers like Company or Cooperative Society are required to do audits under their respective laws. The audit conducted under any other law may not provide a confirmation that the requirements of the Income Tax Act have been complied with. In such cases, if Tax Audit as per Section 44AB is mandatory, the audit report should be filed by the Chartered Accountant in prescribed form i.e. Form 3CA-3CD.

Is it possible to revise Tax Audit Report?

Yes. Tax Audit Report already filed can be revised. However, a valid reason for revising the audit report must be specified by the auditor. It must have a reference to the old Audit Report and must be signed in the current date. Generally, an audit report can be revised due to the following reasons:
1. Revision of accounts of the taxpayer
2. Change of law with a retrospective amendment
3. Change in the interpretation of provisions, CBDT circular, CBDT judgment, etc
4. Technical change in system or software

  • MPS RAMANI says:

    Form 3CBCD is to be file by the auditor. It is to be signed by the Auditor. Has the assesse also to sign form 3CBCD? I am asking this question because Form 3CBCD has to be digitally signed. Assessee may not have registered for digital signature. Verification of ITR can be done even through internet banking or other means without digital signature.

    • Anushka Shah says:

      Hey,
      Form 3CB-3CD is the Tax Audit Report filed by the appointed tax auditor. The auditor uploads the Tax Audit Report from their account on the IT website. It is digitally signed by the auditor, However, the audit report is considered to be final only once the taxpayer approves it from his/her account on the IT website.
      If the digital signature of taxpayer is registered on the IT website, he/she can approve the audit report using digital signature file only.
      Further, in the case of a taxpayer to whom tax audit is applicable, it is mandatory to file the ITR using digital signature (DSC).

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