e-filing of audit report under Income Tax Act, 1961 CA. Deepak Bholusaria

Transcription

1 e-filing of audit report under Income Tax Act, 1961 CA. Deepak Bholusaria

2 Background Assessee deliberately did not disclose some or all adverse remarks of Tax Audit Report. Assessee didn t disallow some expenses, even if they were disallowed by tax auditor. Since Return of Income (ROI) did not contain tax audit report, it was not possible for department to trace such instances. Many assessees used fake CA membership number, in his/its ROI. Even in many cases CA membership number of part-time COP Holder were also reported.

3 Goal and Objective Understanding key requirements for e-filing of audit reports. Understanding types of audit reports which are not available for e-filing. Discussion on flow of process and understanding each process thoroughly, along with demo on each process. Challenges and solutions. Tips and tricks.

4 Checklist Compatible operating system (XP/SP3, Win7/8 etc.) Compatible Web browser (IE/Chrome/FireFox) Internet connectivity Java Min. Ver should be JRE 1.7 update 13 Offline report preparation software to generate XML file for respective audit report Financial statements and other documents are signed and scanned Valid digital signatures of auditor and assessee Access credentials to e-filing portal

5 Type of various forms (other than ITR) available for e-filing

6 Proviso to rule 12(2)* Provided that where an assessee is required to furnish a report of audit specified under: sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10, section 10A, clause (b) of sub-section (1) of section 12A, section 44AB, section 80-IA, section 80-IB, section 80-IC, section 80-ID, section 80JJAA, section 80LA, section 92E or section 115JB of the Act he shall furnish the same electronically. No Audit report u/s 115JC is required to be e-filed

7 Total e-filing forms other than ITR - as on August 7, 2013 Total* Mandatory Optional Total* Offline Online Total* Initiated by CA Initiated by Assessee Both * Form 3CA-3CD / 3CB-3CD counted as one form

8 Mandatory e-audit reports as per proviso to rule 12(2) For AY Relevant Section / clause Specified Audit Report Form No. 44AB 12A(1)(b) 10(23C)(iv)/(v)/(vi)/(via) 10A 80-IA / 80-IC 80-IB 80-ID 80JJAA 80LA 92E 115JB 3CA-3CD or 3CB-3CD 10B 10BB 56F 10CCB 10CCBD 10CCBBA 10DA 10CCF 3CEB 29B Red coloured forms are online forms

9 What about audit reports for 44AD / 44AE / 44BB / 4BBB? Reports for audits conducted under section 44AD or 44AE or 44BB or 44BBB are mandatorily required to be furnished electronically. Audits conducted under Section 44AD & 44AE of the Income Tax Act, 1961 shall not be taken into account for the purpose of reckoning the specified number of tax audit assignments as per guidelines* of ICAI. *There is no reference to section 44BB/44BBB in ICAI guidelines

10 Report u/s section 115JC Report in form no. 29C u/s 115JC of Income Tax Act, 1961 is not at all available for e-filing either under online format or offline format.

11 Trusts required to obtain report in 10B/10BB Reports in form no. 10B/10BB are mandatorily required to be furnished electronically.

12 Process Flow (for forms initiated by CA)

13 Process flow 1. Register as Tax Professional Chartered Accountant 2. Auditor ask assessee to add him/her using Add CA option. 3. Auditor has to Download offline utility and prepare XML file. Filling Complete 5. Assessee login to portal accept filing. In case of rejection, auditor to repeat step Auditor login to portal and upload digitally signed XML file and attachments.

14 Registration of Auditor

15 Registration Tax professional Only Chartered Accountants holding full time active COP can register. No firm can be registered as Tax Professional. Only an Individual CA can register. All signing partners from a firm of Chartered accountants have to separately take registration.

16 Registration Tax professional Basic info required for registration of CA: a. Six digit membership number b. Date of Enrolment as member of ICAI c. PAN d. Name e. DoB (as per PAN data) (should be same as per ICAI and ITD) f. PAN Based digital signature

17 Registration Tax professional User id will be like this: ARCA First 4 alphabets are fixed ARCA Next 6 digits Your ICAI MRN In case you forget your password it can be retrieved using forgot password option.

18 Registration screen

20 Adding CA

21 Adding CA Akin to appointment of auditor (This will not replace standard procedure of obtaining formal appointment letter from assessee). Before any auditor can upload digitally signed XML file of audit report, he has to seek authorisation from assessee. Assessee logins to portal using his PAN based access credentials and authorise CA for a particular form and assessment year. This is a one time exercise to be done by assessee every year.

22 Adding CA Before an assessee can exercise Add CA option, an auditor (as Individual, not as firm) must be already registered on E-filing portal as Tax Professional Auditor s Tax Professional user id must be active. Assessee may authorise one CA for more than 1 form for a particular assessment year in one go, if that CA has been appointed for all such audits (Eg., 3CB+3CEB+29B etc.) Only one CA can be added for a particular form and assessment year.

23 Adding CA Multiple Auditors Q: What if an assessee has multiple divisions/businesses and has appointed multiple tax auditors for different divisions/businesses? A: In opinion of presenter/speaker, assessee shall have to appoint one tax auditor for the purpose of consolidated tax audit report. Such an auditor can either be from the pool of auditors already appointed for various divisions or additional auditor may be appointed. In opinion of presenter/speaker, in case of joint auditors also, assessee may nominate one of the joint auditors for the purpose of e-filing of audit report.

24 Adding CA Signing Member Assessee has to add membership number of that particular Tax Auditor, who has signed/will sign its financial statements. Even in cases where a firm of CA has been appointed as tax auditor, only the CA who has signed audit report on behalf of firm of CA has to be added. One member can not upload report on behalf of another member, even if another member is his partner. Only the signing member can upload report, since XML files have to digitally signed.

25 Can CA be changed? Yes! To change CA, either of two options are available to assessee: a. He can simply use Add CA option and add membership number of new CA and select Yes when portal ask for replacement; or b. First go to Dis-engage CA sub-menu option in My Account menu, select CA to be removed and press Dis-engage button. Post that, use Add CA option to add new CA.

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31 Login and Upload

32 Technical requirements (offline mode) Balance Sheet (or Statement of Affairs) and profit & loss account (or Income & Expenditure account) to be mandatorily attached with form 3CA/3CB or form 10BB, as the case may be. Cost audit report / excise report will also be a mandatory attachment depending upon tax auditors answer in form 3CD. No option for multiple attachments of a single set of document. All attachments to be signed and scanned Attachments to be in pdf/tiff format

33 Technical requirements (offline mode) Total of all 4 attachments can not exceed 20MB Fair Size (there is a conflict on this at various sections of portal) There is no option to upload and store attachments on portal. If due to any reason (connectivity etc.) link to portal is disconnected entire attachments to be uploaded again. XML file has to comply with latest Schema notified by ITD irrespective of preparation utility used. Only CA who has signed audit report has to login and upload User ID of the CA must be active at the time of upload

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38 General FAQs

39 Will portal accept more than 45 Tax Audit reports? The limit of 45 has been prescribed by ICAI not Income Tax Department Yes, you can upload more than 45 audit reports, portal will happily accept more than 45 tax audit reports in form 3CA/3CB (with 3CD of course) Peer review by ICAI

40 If portal can accept more than 45 reports, how will ICAI know? As per arrangement between ICAI and ITD, ITD will provide will provide periodic member wise upload position to ICAI. How will be 44AD/44AE reports identified? The MIS provided by ITD will segregate 44AD/AE and other reports.

41 If portal can accept more than 45 reports, how will ICAI know? As per arrangement between ICAI and ITD, ITD will provide will provide periodic member wise upload position to ICAI. How will be 44AD/44AE reports identified? The MIS provided by ITD will segregate 44AD/AE and other reports.

42 Do I need to file Director s report? NO I am branch auditor. Do I need to e-file TAR? NO. Branch audit report will be consolidated with HO audit report and HO audit report need to be e-filed.

43 Can any information like Quantitative Details be attached as annexure along with financial statements? NO, all quantitative details need to be filled in XML format itself. I find filling details of additions/sale of Fixed Assets very cumbersome. Can I attach an annexure with financial statement? NO, all line items related to additions/sale of fixed assets needs to be filled in XML format itself.

44 If an assessee has voluntarily got his account audited and obtained 3CB, then is it necessary to upload the audit report? No Do I need to upload statutory audit report and financial statements, of a company not subjected to tax audit? Only ITR needs to be filed in this case.

45 Within how much period the assessee has to accept the audit report after being e-filed by auditor? No time limit per se. But it may be accepted before expiry of due date u/s 44AB to avoid penalty proceedings u/s 271B, since the day on which assessee accepts TAR filing, shall be considered as date of furnishing.

46 Questions please?

47 Thank you! CA. Deepak Bholusaria