Analysis of Tax Audit-3CA, 3CB, 3CD & 3CE Forms

Last Updated On: Dec. 29, 2021, 10:21 p.m.
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ANALYSIS OF TAX AUDIT- 3CA, 3CB,3CD & 3CE FORMS

 

What is the meaning of Tax Audit?

Tax audit is a cross-examination of the books of accounts of the taxpayer by a Chartered Accountant (holding full-time Certificate of Practice) under the Income Tax Act 1961.

Section 44AB deals with the conditions under which Tax audit becomes mandatory for some taxpayers.

The main purpose of a tax audit is to verify the accuracy of the financial records and avoid any fraud or tax evasion.

 

The audit report has to be furnished in either of the following forms:
(i) Form 3CA and (ii) Form 3CB

Form 3CA

In respect of a taxpayer carrying on a business or profession and who is already mandated to get his accounts audited under any other law (i.e. law other than income tax law).
For instance, A company is required to get its accounts audited compulsorily under the Companies Act 2013. So, it will furnish Form 3CA.

 

Form 3CB

In respect of a taxpayer carrying on a business or profession but who is not required to get his accounts audited under any other law.
A proprietorship entity or partnership firm, having a turnover of more than 1 crore and not opting for presumptive income scheme, is not required to get its accounts audited under any other law except income tax. So, it will furnish Form 3CB.  

Along with either of the forms mentioned above, the tax auditor shall also furnish Form 3CD which forms part of the audit report and contains the prescribed particulars.

I. Particulars of Form 3CA

  • Name and address of the taxpayer along with Permanent Account Number.
  • Name of the Auditor (Individual/ Firm as the case may be).
  • Law under which accounts have been audited (eg: Companies Act).
  • Date of Audit Report.
  • Period of Profit & Loss Account/ Income & Expenditure Account. (Beginning Date & End Date)
  • Date of Balance Sheet.

 

II. Declaring by attaching Form 3CD along with the audit report.

 

III. Audit Observations/ Qualifications found in the details related to Form 3CD.

 

IV. Place & Date of signing audit report.

  • Name, Address, and Membership Number of the Auditor.
  • Stamp/ Seal of the Auditor.
  • Particulars of Form 3CB

 

V. Date of Balance Sheet.

  • Period of Profit & Loss Account/ Income & Expenditure Account. (Beginning Date & End Date).
  • Name and address of the taxpayer along with Permanent Account Number.

 

VI. Address, where the books of accounts are kept

Address of branches (if books are kept at branches also).

 

VII. Audit Observations/ Qualifications/ Comments/ Discrepancies.

 

VIII. Declaration by the auditor regarding –

  • Obtaining all the information and explanations necessary for the audit.
  • Assurance that the organization (including branches) maintains proper books of accounts.
  • Balance sheet and Profit & Loss Account gives a true and fair view.

 

 

Steps for uploading 3CA / 3CB – 3CD

STEP 1:- Client’s Login- ADD CA +ASSIGN FORM 3CB 3CD + ATTACH DSC –

( All step -1 activities , you can Do these for ALL TAR clients in one single day for all )( tell your staff to this in advance)

 

1.1 GO TO Authorized partner. FOR ADD CA

ADD CA ( NOT REQUIRED TO DO IF YOU HAVE FILED ‘TAR’ FOR SAME CLIENT LAST YEAR)

(The option to assign ALL OTHER FORMS are given in above step BUT here is Infosys wonder->

assigning Forms 3CA-3CD, 3CB-3CD to CA, Go to e-File -> Income Tax Forms -> File Income Tax Forms -> Select Form 3CA-3CD, 3CB-3CD (available under ‘Persons with Business/Professional Income’…. Don’t know if this is blunder or intentionally done or just a mistake )

1.2 Click for E-file FOR ASSIGN FORM ( This is tricky , they have kept specifically this option in Diff. Path)

  • Income tax forms
  • File IT Forms
  • Press- View 30 items
  • Select 3CB -3CD- Press file (3CA-3CD if it is)
  • Select year & CA – Press Continue

 

1.3 Click on my profile FOR ADDING SIGNING PARTNER.

This require to be done only in case of P.FIRM / LLP / COMPANY

Press key person

(Again this is tricky , they have kept this in “Key person” not in “Authorized Signatory”)

 

1.4 Click on my profile FOR REGISTRATION OF DSC.

 

in case of P.FIRM / LLP /COMPANY, You have to login to Authorized Signatory’s Login to perform below steps for Registration of DSC

 

Also, before registering DSC , Attach client DSC in PC & change user PIN in E-pass manager (PIN can be same as old)

 

  • Register DSC

 

  • Sign (This process needs to be done for every client afresh on New portal)

 

 

STEP 2:- make 3CA/3CB-3CD JSON

Fill up All 43 clauses & make 3CA/3CB-3CD from software/ utility the way you used to do earlier

 

STEP 3:- CA’s login– FOR UPLOADING the form

  • GO TO Pending Action
  • Worklist
  • For your Action – Select same assessee- Press Accept- Press Back to Worklist-
  • (Then you will be again directed to Same earlier screen )
  • You have to Press “File Form”
  • Press Continue & Upload 3CB -3CD Json and BS PL scanned
  • (UDIN need to be updated in future, as currently this functionality is not working)
  • Sign with CA DSC

 

STEP 4:- Client’s Login- FOR ACCEPT THE form

  • Pending Action
  • Worklist
  • ACCEPT the Form with attaching DSC
  • Go to “E-file” – Press View E-filed forms
  • Download ACKNOWLEDGEMENT RECEIPT

 

STEP 5:- DOWNLOAD , SAVE AND PRINT

  • Generate PDF of 3CB-3CD from Software and Save in Client Folder – PRINT 3 COPIES
  • Save ACKNOWLEDGEMENT RECEIPT of upload in same folder – PRINT 3 COPIES

 

 

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