FAQ on e-Filing of Tax Audit Reports for AY 2019-20, FY 2018-19

FAQ on e-Filing of Tax Audit Reports for AY 2019-20 FY 2018-19: This article discusses the e-Filing process in general and answers some of the Frequently Asked Questions (FAQs). Read on to know more…

Add CA- Action by Assessee 

To enable the CA, to upload the applicable forms on the assessee’ behalf, the assessee need to first ‘ADD CA’ from his account.

• Step 1: Logon to ‘e-Filing’ Portal www.incometaxindiaefiling.gov.in
• Step 2: Go to the ‘My Account’ menu located at upper-left side of the page ⇒ Select ‘My CA/ERI’ ⇒ Click ‘My Chartered Accountant’ ⇒ Click ‘Add’
• Step 3: Enter ‘Membership Number’,’Name of the CA’ ⇒ Select ‘Form Name’ and ‘Assessment Year’
• Step 4: Click ‘Submit’

After submitting, this will add the CA in assesse’ account for that particular Assessment Year selected, which enables CA to upload the forms on behalf of the Assessee.

Submit Tax Audit Report Online  – Action by CA

• Step 1: Logon to ‘e-Filing’ Portal www.incometaxindiaefiling.gov.in
• Step 2: Go to the ‘e-File’ menu located at upper-left side of the page ⇒ Click ‘Income Tax Form’
• Step 3: Select the ‘Assessment Year’, ‘Form Name’ and ‘Filing Type’ from the dropdown list
• Step 4: Select the ‘Submission Mode’ as ‘Prepare and Submit Online’ from the dropdown list.
• Step 5: Enter the following details
  • PAN of the Assessee
  • PAN of the CA
• Step 6: Click Submit -> Fill the form ⇒ Click Submit
• Step 7: Attach the DSC at the option ‘Attach the Signature file*’ -> Click ‘Submit’

Note: You must have Digital Signature Certificate (DSC) to attach.

1) While creating login as Chartered Accountant, CA is getting error for mismatch/difference in Date of Birth / Name.

In this case, members Date of Birth or his name is recorded incorrectly either with PAN Database or with ICAI records. This is because, while creating login of the Chartered Accountant, e-filing site verifies the Name of Member and Date of Birth from PAN Database with member records available with ICAI. If there is difference / mismatch, site will give an error and portal will not allow for registration. In such case, auditor can approach either ICAI or IT Dept. to correct their Date of Birth / Name.

2) System becomes very slow during e-Filing of audit reports. What can be done?

Remove all old versions of Java to improve performance. Try using ‘Google chrome’, it will give best results.‘Mozilla Firefox’ will also do.

3) Auditor intends to give certain Qualifications/Comments in Form 3CD report. However, same cannot be entered in online 3CD. Only numerical fields / look ups provided are accepted. What can be done?

This is an inherent limitation of online Form 3CD. Since online 3CD is in form of macro enabled Excel Spreadsheet, only the numerical field / look ups provided can only be entered. (Eg. Clause 10(a) asks whether there is change in nature of business. Auditor has to answer this in either ‘yes’ or ‘no’. No other details will be accepted). To overcome this, auditor can select the nearest possible look up available. In Form 3CA / 3CB, textbox is provided at the end. All other details / qualifications / remarks / comments can be mentioned in textbox given in Form 3CA.

4) Clause 21 of Form 3CD contains details of disallowances pertaining to non-deduction / non-payment of TDS. Assessee has 3500 instances of such disallowance. Is it required to enter all these details?

Clause 35 of Form 3CD requires giving item wise quantitative details of Stock traded / items manufactured. Assessee has 5000 items in stock. Is it required to enter all these details?

Yes. This will be highly time consuming/ lengthy exercise, but there is no alternative to this. Generally, the Income-tax Department will put the uploaded report for Data Analysis/ Data Mining in their internal software. Queries generated there from will be used for selecting the cases for assessment / detailed scrutiny. Since Data mining / Data Analysis requires high level of uniformity, Form 3CD contains very specific look ups to fill in.

Hence, to the extent possible, it is advisable for the auditor to give the complete details to the extent possible.

5) Auditor has uploaded the XML file. He wants to take a print out for his future record. However, there is no option for printing the uploaded XML file. What can be done?

CA has no option to print uploaded XML files. However, the assessee has an option to print the same. The assessee can print the uploaded XML file in PDF format

6) Auditor has uploaded the Tax Audit Report. Inadvertently, assessee has rejected it. Now, if CA tries to upload the same XML again, e-Filing site is not accepting the XML and giving an error. What can be done?

This is an inherent problem with e-filing site. Once the audit report is rejected by assesse, same XML file won’t be accepted by e-filing site again. CA has to fill the entire tax audit report afresh and has to upload the same. This will be accepted by e-Filing site.

7) Whether Schedules to Balance Sheet / Profit and Loss Accounts and Notes to Accounts also need to be uploaded?

Yes. Since schedules and notes to accounts forms integral part of Financial Statements, same needs to be uploaded. Uploading only Profit and Loss Account and Balance Sheet without schedules / notes to accounts may be viewed as incomplete submission

8) Is it mandatory to upload signed copy of Financial Statements? Or uploading unsigned PDF copies will suffice the purpose?

e-Filing site has nowhere specified that only signed copies must be uploaded. Thus, word document or excel spreadsheet converted into PDF (though unsigned) can be uploaded. Further, there is restriction of 20 MB / 50 MB size for uploading. If entire signed copies of Balance Sheet, Profit and Loss Account, Schedules and Notes to accounts are converted into PDF, their size may exceed the maximum permissible limits and uploading may not be possible. Hence, uploading unsigned PDF copies is a workable option.

Though unsigned copies are uploaded, it is worth noting that uploading will be done through password of the auditor and after attaching his digital signature. Hence, same can be considered as authentic and binding on Auditor for all future purposes.

Therefore, utmost care should be taken that PDF copies uploaded and printed copies signed should be same. If there is difference, it will create unnecessary difficulties

e-Filing site has nowhere specified that only signed copies must be uploaded. Thus, word document or excel spreadsheet converted into PDF (though unsigned) can be uploaded. Further, there is restriction of 20 MB / 50 MB size for uploading.

9) How the Tax Audit Report can be uploaded in case of joint audit?

e-Filing portal as of now allows the report to be uploaded by a single auditor. Therefore, if there is consensus between the auditors, they may mutually decide among themselves and any one of them can upload the audit report. However, if there is no consensus between joint auditors / they disagree on a particular point, each auditor will express his own opinion through a separate report. As of now e-Filing site does not accept two audit reports by different auditors. It is expected that the matter would be resolved in some time.

10) Is there any upper limit on the number of audit reports which can be uploaded by auditor on e-filing portal?

As per e-filing site, there is no limit. But as per ICAI regulations, CA in practice can sign maximum 60 tax audit reports under Section 44AB. Though there is no limit by IT Dept on number of audit reports filed, Members are expected to comply with the maximum number prescribed by ICAI.

11) Is it OK if ITR is filed first and Tax Audit report is filed afterwards?

Though e-filing site will allow this, it is important to remember that date of Tax Audit Report is required to be mentioned in ITR. Hence, it is advisable to upload Tax Audit Report first and ITR subsequently.

12) What will be the consequences if online Tax Audit Report is filed after due date but physical hard copies are signed before due date?

Section 44AB mandates getting accounts audited by an accountant before the specified date and furnishing the report of such audit by that date. Therefore, uploading of tax audit report before the specified date is the requirement under the Act

13) What will happen if Auditor has filed the Tax Audit Report, but assessee has not accepted it?

It will be presumed that Tax Audit Report is not filed and accordingly, penalty proceedings can be initiated

14)The assessee is dealing in two business segments but business is carried under same Name. Net Profit Ratio, other financial parameters are different for both the business segments. Method of valuation of stock is also different in each business segment. How to upload these details in online Tax Audit Report?

Online Tax Audit Report will accept only one entry against each head. (i.e. though there are two business segments, only one net profit ratio can be entered). It is advisable to take the average and upload the average figures in online report. Details of each business segments can be mentioned in word document and PDF copy thereof can be uploaded, if required.

Must –

• Procedure of e-Filing of Tax Audit Reports
• Step By Step Guide to Tax Audit

Conclusion

Every new regulation and new intricacy in the business of assessee, may result in new queries while uploading the tax audit report. This article discusses only the most common/general queries or issues that may arise while filing the tax audit report. ICAI is constantly interacting with IT Dept to make the e-filing process more convenient for its members. It may be kept in mind that e-filing of Audit Reports is a doubleedged sword. It ensures safety and security of information contained in the tax audit report. At the same time, negligence in e-filing may have undesirable effects. Members can design their entire audit procedure in such a way that e-filing will become easy at the same time ensuring effective compliance in filing tax audit report.