Tax Audit under Income tax Act – Latest amendment – Law and Practice

CA. S. K. Bhargava

Taxation is the lifeblood of any economy, providing the government with essential resources to fund public services and infrastructure development. To ensure fairness and accuracy in the tax system, the Indian Income Tax Act, 1961, includes various provisions, one of which is Section 44AB, that mandates tax audit for certain taxpayers. This article explores the intricacies of tax audit under Section 44AB and its significance in promoting tax compliance and transparency.

Introduction to Tax Audit under Section 44AB

Tax audit is a systematic review and examination of a taxpayer’s financial records, accounting practices, and compliance with tax laws. It aims to verify the correctness and accuracy of financial statements, assess the income, expenses, and deductions, and ensure adherence to statutory requirements. Section 44AB of the Income Tax Act, 1961, governs the tax audit provisions in India.

Objectives of Tax Audit

Tax audit serves several crucial objectives that contribute to a fair and efficient tax system:

1. Ensuring Accuracy: The primary goal of tax audit is to ensure the accuracy and authenticity of the financial statements and documents provided by the taxpayer. This helps in preventing misreporting and manipulation of financial records.
2. Enhancing Compliance: By making tax audit mandatory for certain taxpayers, the government aims to enhance tax compliance. Knowing that their financial records will be scrutinized, taxpayers are encouraged to maintain proper books of accounts and adhere to tax regulations.
3. Detecting Tax Evasion: Tax audit acts as a deterrent against tax evasion. It helps the tax authorities in detecting concealed income, undisclosed transactions, and unaccounted assets.
4. Expanding Tax Base: By uncovering unreported income and hidden transactions, tax audit contributes to expanding the tax base, thereby increasing the government’s revenue collection.

Applicability of Tax Audit under Section 44AB

The applicability of tax audit under Section 44AB is determined by the total income and nature of the taxpayer. It applies to the following categories:

1. Businesses: If an individual, Hindu Undivided Family (HUF), or partnership firm is engaged in business, the tax audit is mandatory if their total turnover or gross receipts in any previous year exceed ₹ 1 crore. (Provided that in case of person whose aggregate of all amounts (Revenue as well as capital nature)received including amount received for sales, turnover, gross receipts during the previous year, in cash, does not exceed five percent of the said amount and aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five percent of the said payment, then limit of one crore rupees will increase for that person to ten crore rupees)
2. Professionals: Professionals like doctors, lawyers, architects, etc., are subject to tax audit if their gross receipts exceed ₹ 50 lakhs in any previous year.
3. Presumptive Taxation Scheme: Taxpayers opting for the presumptive taxation scheme under Section 44AD (businesses), Section 44AE (goods carriage owners), or Section 44ADA (certain professionals) are required to undergo a tax audit if they declare income lower than the presumptive income and their total income exceeds the basic exemption limit.
4. Applicability of section 44AB to Non- residents: Where the non-resident assessee did not carry on any business in India nor maintained any permanent establishment in India, the provisions of section 44AB are not applicable to him [ITO v. Voest Alpine Industrieanlagenbau GMBH, Austria (1998) 67 IDT 219 (Cal)]. The non-resident is taxable only in respect of income accruing or arising or received in India. Accordingly, the audit would be confined only to the no-resident’s Indian operations.
5. A trust/association/institution carrying on activities on the object of the Trust may enjoy exemptions as the case may be under sections 10(21) or 10(23A) or 10(23B) or section 10(23BB) or section 10(23C) or section 11 of I. T. Act 1961. However If they are carrying on business activities and the Business Turnover exceeds the prescribed limits then Tax Audit Provisions very much applicable.
6. A co-operative society carrying on business may enjoy deduction under section 80P of I. T. Act 1961 but if the Turnover is exceeding the prescribed limit, then the Tax Audit is very much mandatory

Meaning of Sales, Turnover, Gross Receipts

Meaning of Sales or Turnover: As per “Guidance Note on Terms Used in the Financial Statements”, the expression “Sales Turnover” has been defined as the aggregate amount for which sales are effected or services rendered by an enterprise.

Futures & Options: Non-speculative business

• As per Guidance Note on Tax Audit issued by the ICAI, the turnover in case of futures and options is computed in the following manner if assessee opts for offering income u/s 44AD
  1. The total of favourable and unfavourable differences shall be taken as turnover (absolute values).
  2. Premium received on sale of options is also included in turnover.
  3. In respect of any reverse trades entered, the difference thereon, should also form part of the turnover.
• If there is loss in case of F&O transactions, in that case tax audit will not be applicable if the income is below exemption limit [Sec. 44AD(4)]

Issue of Interest and Remuneration in case of Profession

• Recent Bombay High Court Judgment Dated 9th March 2022 Perizad Zorabhai Irani v. PCIT & Ors. (6 NYPCTR 300) states that:
  • Assessee carrying on business as well as profession and the Income from profession consists of remuneration from firm exceeding 50 lacs. In such a case Remuneration from firm can not be called as Gross Receipts. Hence no requirement of getting the Books Audited.

Exclusions from Sale or Turnover:- Trade discount, turnover discount, return inwards, price adjustments, cancellation of bills, cash discount, receipt from sale of assets held as Investment etc.

Inclusions to Sales or Turnover:- Excise duty/sales tax/GST, if they are not recovered separately. However packing, freight and forwarding charges are to be included in sales if they are not separately shown in the invoices.

Meaning of Gross Receipts

“Gross Receipts” will include all receipts whether in cash or kind arising from carrying on of the business or profession, which will normally be assessable under the Income-tax Act:

It would cover the following:– Profit on sale of import licence, cash assistance, duty drawback, reimbursement of expenses such as packing, forwarding, freight, insurance travelling etc., hire charges of cold storage, liquidated damages, insurance claims, sale proceeds of scraps, wastage etc unless treated as part of sales turnover, advances received and forfeited from customers.

It would not cover the following items:- Sale proceeds of fixed assets including the advance forfeited, sale proceeds of assets held investments, rental income/interest unless the same is assessable as business income, dividend on shares except on case of assess dealing in the shares, reimbursement of custom duty and other charges collected by the clearing agent, write back amounts payable to creditor(s) and/ or provisions for expenses or taxes no longer required.

Due Date for Tax Audit

The tax audit report, along with the prescribed forms and documents, must be furnished on or before the due date for filing the income tax return. For Asseesses that do not require Tax Audit, the due date for ITR Filing for FY 2022- 23(AY 2023-24) is 31st July 2023. For Assessees requiring Tax Audit the due date for ITR filing for FY 2022-23 (AY 2023-24) is 31st October 2023 and the due date for Tax Audit Report filing is 30th September 2023.

The Process of Tax Audit

Tax audit is carried out by a qualified Chartered Accountant (CA) who examines the taxpayer’s books of accounts and related documents. The process involves the following key steps:

1. Review of Books of Accounts: The CA reviews the taxpayer’s books of accounts, including ledgers, cash books, purchase and sales registers, and other financial records, to ensure their accuracy and compliance with accounting standards.
2. Verification of Transactions: The CA verifies the financial transactions entered in the books of accounts to ascertain their legitimacy and correctness.
3. Assessment of Tax Liability: The tax auditor assesses the taxpayer’s tax liability, taking into account income, deductions, exemptions, and applicable tax rates.
4. Compliance Check: The auditor checks if the taxpayer has complied with various statutory requirements such as TDS (Tax Deducted at Source) provisions, advance tax payments, and other tax-related compliances.
5. Preparation of Tax Audit Report: Based on the examination, the CA prepares a tax audit report in the prescribed format, which includes findings, observations, and necessary disclosures.

Application of Mandatory Accounting Standards (I.E. AS-1 TO AS 32) to Tax Audit

The mandatory accounting standards also apply in respect of financial statements audited under section 44AB. Accordingly, it is the duty of the members of the ICAI to examine the compliance with these mandatory accounting standards while conducting such audit. It is to be noted that while conducting tax audit, the auditor is not computing the income , but reporting on the accounts and the particulars specified in Form 3CD.

In the context of tax audit under Section 44AB of the Income Tax Act, 1961, the tax auditor shall ensure the application of Accounting Standards (AS-1 to AS-32) and Income Computation and Disclosure Standards (ICDS-I to ICDS-X) while preparing the tax audit report. Both AS and ICDS play a significant role in determining the financial statements’ accuracy and proper disclosure of income and expenses. Let’s understand how AS and ICDS are relevant in the tax audit process:

1. Accounting Standards (AS):- During the tax audit, the tax auditor may review the financial statements to verify if they adhere to the relevant AS. This includes aspects like recognition of revenue, treatment of expenses, valuation of assets and liabilities, and disclosure requirements. If the financial statements deviate from the applicable AS, the auditor may make necessary adjustments and disclosures in the tax audit report to ensure that the tax assessment is based on correct financial information.
2. Income Computation and Disclosure Standards (ICDS): ICDS are a set of standards introduced by the Central Board of Direct Taxes (CBDT) to govern the computation of income and disclosure requirements for tax purposes. These standards aim to minimize disputes related to income computation and provide uniformity in the treatment of certain items for tax purposes.

Tax auditors are required to apply ICDS while computing taxable income and reporting it in the tax audit report. ICDS covers various aspects, such as Accounting policies, Revenue recognition, Inventories, Construction contracts, Tangible fixed assets, Government grants, Securities, Borrowing cost, Provisions, Contingent liabilities and Contingent Assets etc. The tax auditor must ensure that the taxpayer complies with the relevant ICDS while preparing the tax audit report.

Consequences of Non-Compliance Non-compliance with the tax audit provisions under Section 44AB can lead to severe consequences. If a taxpayer who is required to get a tax audit fails to do so or does not file the audit report by the due date, they may be liable to pay a penalty of 0.5% of the total turnover or gross receipts, subject to a maximum penalty of ₹ 1,50,000.00 u/s 271B. Additionally, the taxpayer may also be liable for interest on any tax payable. However, if there is a reasonable cause of such failure, no penalty shall be levied under section 271B.

So far, the reasonable cause that Tribunal/Courts accept are:

• Natural Calamities
• Resignation of Tax Auditor and Consequent Delay
• Delay in Statutory Audit consequently delay in Tax Audit
• Labour problems such as strikes, lock-outs for an extended period
• Loss of accounts because of situations beyond the control of Assesses
• Physical inability or death of the partner in charge of the accounts

Accounts audited under any other Law If a taxpayer is required to get his books of accounts audited under any other law, for example, a statutory audit of companies under company law provisions, the individual need not conduct his audit again for taxation purposes. The taxpayer just has to get the audit report furnished according to the income tax law before the due date of filing the return.

Critical Examination by Tax Auditor Tax audit under Section 44AB of the Income Tax Act, 1961, is a crucial compliance requirement for certain taxpayers to ensure accuracy, transparency, and adherence to tax regulations. Here are some critical areas that come under scrutiny during a tax audit:

1. Books of Accounts and Records: The tax auditor carefully examines the taxpayer’s books of accounts, including cash books, ledgers, journals, and subsidiary records. They verify whether the books are properly maintained, entries are correctly recorded, and comply with the accounting standards.
2. Income and Expenditure: The tax auditor reviews the taxpayer’s income and expenditure statements to ensure that all income earned and expenses incurred during the financial year are accurately reported. They cross-check the transactions with the supporting documents to validate the authenticity.
3. Tax Deducted at Source (TDS) Compliance: The auditor verifies whether the taxpayer has complied with TDS provisions, deducted the correct amount of tax, and remitted it to the government within the prescribed timelines. Non- compliance in this area can lead to penalties and interest.
4. Advance Tax Payments: The tax auditor checks whether the taxpayer has paid advance tax as per the applicable rules and whether the payments were made timely and correctly.
5. Presumptive Taxation Scheme: If the taxpayer has opted for the presumptive taxation scheme under Section 44AD, Section 44AE, or Section 44ADA, the tax auditor ensures that the taxpayer meets the eligibility criteria and has reported the deemed income correctly.
6. Compliance with Tax Laws: The auditor examines whether the taxpayer has complied with various provisions of the Income Tax Act, such as submission of necessary documents and information, filing of tax returns, and responding to income tax notices, if any.
7. Carry Forward of Losses and Set-off of Losses: The auditor verifies whether the taxpayer has correctly carried forward losses from previous years and set off such losses against current year income as per the provisions of the Act.
8. Tax Exemptions and Deductions: The auditor checks whether the taxpayer has claimed tax exemptions and deductions appropriately and whether the necessary documentation and proofs are available to support these claims.
9. Related Party Transactions: In the case of businesses and professionals, the auditor scrutinizes transactions with related parties to ensure they are at arm’s length and conducted as per transfer pricing regulations.
10. Goods and Services Tax (GST) Compliance: For businesses registered under GST, the auditor may review the GST returns filed, reconcile them with the financial statements, and verify the correctness of input tax credits and tax payments.
11. Disclosure of Specified Financial Transactions: The tax auditor ensures that the taxpayer has disclosed specified financial transactions, such as cash deposits, high-value transactions, etc., as required under the Income Tax Act.
12. Penalties and Interest: The auditor checks for the accuracy of penalties and interest levied, if any, and ensures they are calculated as per the provisions of the Act.

Reckoner of Notes/Disclosures/ Disclaimers to be given by Tax Auditor in Clause(3) Form No. 3CA/Clause (5) of Form No. 3CB with respect to Each Clause of Form No. 3CD

The reckoner of notes/disclosures/disclaimers to be given by TAX AUDITOR in clause (3) form no. 3CA/clause (5) of form no. 3CB with respect to each clause of form no. 3CD has been given vide Annexure I to enable the Tax Auditor to incorporate comments/observations in all clauses and for proper documentation.

Conclusion

Tax audit under Section 44AB of the Income Tax Act, 1961, is a critical tool in promoting tax compliance and transparency in India. By subjecting certain taxpayers to a thorough examination of their financial records, the government ensures that businesses and professionals are held accountable for their income and expenses. Tax audit not only helps in detecting tax evasion but also strengthens the tax base, providing the government with the necessary resources for nation-building. Taxpayers must recognize the importance of tax audit and engage with qualified professionals to ensure a smooth and error-free process of tax compliance, contributing to the nation’s economic growth and development.

ANNEXURE-1

RECKONER OF NOTES/DISCLOSURES/DISCLAIMERS TO BE GIVEN BY TAX AUDITOR IN CLAUSE (3) FORM NO.3ca/CLAUSE (5) OF FORM NO. 3CB WITH RESPECT TO EACH CLAUSE OF FORM NO. 3CD

CLAUSE OF Form No. 3CD	Notes/Disclosures/Disclaimers to be given by Tax Auditor in clause (3) of Form No. 3CA/ Clause (5) of Form No.3CB
Clause 1- Name of the assessee	Note to be given in case of change of name by assessee
Clause 2- Address	—
Clause 3- PAN/Aadhaar Number	Note to be given if PAN does not match with PAN digits on PAN-based indirect tax registration number 1.
Clause 4- Registrations under Indirect Tax Laws	Mention the Fact of reliance on list of indirect laws applicable, as provided by assessee. Note to be given if PAN does not match with PAN digits on PAN-based indirect tax registration number. Non- registration under indirect tax law which is prima facie applicable to assessee
Clause 5- Status	Any dispute regarding status of the assessee (e.g. on partition of HUF)
Clause 6- Previous Year
Clause 7- Assessment Year
Clause 8- Relevant Clause of section 44AB under which tax audit is applicable.
Clause 8A- Whether the assessee has opted for taxation under section 115BA/115BAA/115BAB /115BAC/115BAD	Mention the fact of reliance on asseessee’s MRL as to whether assessee intends to continue under the regime or whether he intends to opt from current year.
Clause 9- Regarding details regarding firm/ AOP/LLP/BPI
Clause 9 (a). If firm or Association of Persons, indicate names of partners/members and their profit sharing ratios.In case of AOP, whether shares of members are indeterminate or unknown
Clause 9 (b). If there is any change in the partners or members or in their profit sharing ratio since the last date of the preceding year, the particulars of such change
Clause 10(a)- Nature of Business or Profession (if more than one business or profession carried on during the year, nature of every business or profession)	Business added/discontinued during the previous year with respect to the preceding year of the previous year. To Correspond to Annexure – I of form 3CD Permanent Discontinuance to be stated Temporary suspension not to be reported Materiality to be seen for determination of change Also refer CBDT circular No. 04/2007 dt. 15/06/2007
Clause 10(b)- Particulars of any change in the nature of business or profession
Clause 11- Books of account
Clause 12- Whether the profit or loss account includes any profits and gains assessable on presumptive basis, if yes, indicate the amount and the relevant section (44AD, 44AE, 44AF, 44B, 44BB, 44BBA, 44BBB, Chapter XII-G, First Schedule or any other relevant section)	The amount of profit that relates to a business subject to the presumptive scheme of taxation must be reported here. In case of multiple businesses, only the amount of profit that relates to the businesses subject to the presumptive scheme of taxation will be reported section-wise
Clause 13(a)- Method of accounting employed in the previous year	Management Representation Letter on method of accounting employed by assessee.
Clause 13(b) – whether any change in the Method of accounting employed in the previous year vis a vis immediately preceding previous year	Where there is a change in method of accounting and accounts of immediately preceding previous year are unaudited.
Clause 13(c)- Details of change in the Method of accounting and effect of such change on the Profit or Loss
Clause 13(d)- Whether any adjustments required to profit/loss to comply with ICDSs	Mention the fact of reliance on draft computation of income provided by assessee for clauses 13(d) to (f)
Clause 13(e)- Give details of adjustments required	Mention the fact of reliance on draft computation of income provided by assessee for clauses 13(d) to (f)
Clause 13(f)- Give disclosures as per ICDS
Clause 14- Stock Valuation
Clause 15- Capital asset converted into stock- in-trade
Clause 16(a) – Amounts not credited to profit and loss account regarding items falling within the scope of section 28	Case law relied upon for reporting
Clause 16(b)- Refunds admitted as due by authorities concerned but not credited to profit and loss account	If assessee is following cash system, give a note that this clause not applicable.
Note on netting off against expenditure heads if amounts netted off rather than credited to income heads/accounts.
Clause 16(C)- Escalation claims accepted as due during previous year but not credited to P&L	If assessee is following cash system, give note that this clause not applicable.
Clause 16(d)- Any other item of income not credited to P&L	Mention that amounts reported here are only those not covered in adjustments reported in clause 13(e)
Clause 16(e)- Capital receipt, if any, not credited to P&L	Mention that amounts reported here are only those not covered in adjustments reported in clause 13(e)
Clause 17- Property transferred at less than value adopted or assessed or assessable by any authority of a State Government referred to in section 43CA or 50C.	Note to be given in exceptional cases where tax auditor unable to verify relevant property documents.
Clause 18- Depreciation allowable	State relevant case law relied upon in reporting under clause 18.
Clause 19- Amounts admissible as deductions under sections 32AC, 32AD, 33AB,33ABA, 35(1) (i)(ii)/(iia)/(iii)/(iv),35(2AA), 35(2AB), 35ABB, 35AC, 35AD, 35CCA, 35CCB. 35CCC, 35D, 35DD, 35DDA, 35E.	State the fact of reliance upon separate audit reports obtained by assessee under relevant sections to claim deductions.
Clause 20(a)- Bonus or commission payable to employee for services rendered not otherwise payable as profit or dividend.	State relevant case law relied upon in reporting. State fact of reliance on list of shareholder- employee (in case of LLP) furnished by management.
Clause 20(b)- Employees contribution received towards various funds such as PF/ESI etc.	State the fact of reliance on management’s list of employee welfare fund laws and due dates of payments of employees contribution received.
Clause 21- Details of amounts debited to the profit and loss account
Clause 21(a)- First item- Capital expenditure debited to P&L account	Mention reliance on draft computation of income obtained for clauses 13(d) to (f) Note about items reported as adjustments under ICDS in clause 13(e). If assessee has different view, that may also be stated with explanation and case law relied on by him.
Clause 21(a): 2nd item- Personal expenditure debited to profit and loss account	Case law relied upon for reporting against this clause. Note on reliance on statutory auditor’s report in case of company assessee.
Clause 21(a): 3rd item- Advertisement expenditure in souvenir, brochure, tract, pamphlet published by political party and debited to profit and loss account	Note regarding claim of deduction u/s 80GGB is case of company assessee
Clause 21(a): 4th item- Expenditure incurred at clubs being entrance fees and subscriptions and debited to P&L
Clause 21(a): 5th item- Expenditure incurred at clubs being cost for club facilities and services used and debited to P&L
Clause 21(a): 6th item- Penalty or fine for violation of law for the time being in force debited to P&L
Clause 21(a): 7th item- Penalty or fine other than for violation of law for the time being in force debited to P&L
Clause 21(a): 8th item- expenditure incurred for any purpose which is an offence or which is prohibited by law (including compounding fees, perquisites or benefits given here acceptance by recipient is in violation of law)
Clause 21(b): Amounts inadmissible under section 40(a) (details of payment on which tax has not been deducted)	Fact of CA certificates in Form 26A received by assessee from payees and relied upon by tax auditor
Clause 21(c): Interest, remuneration, commission or salary inadmissible u/s 40(b)/ 40(ba)	Note regarding draft computation of income from assessee relied upon to compute “book profits” in case of firms and LLPs. If case law relied on for taking the view that circular no. 739 of CBDT does not lay down the correct law, state the fact.
Clause 21(d): Disallowance/ deemed income u/s 40A(3)/40A(3A)	Disallowance/deemed income under section 40A(3) If both of these two conditions are satisfied, then the provisions of this section will be applicable. 1. The assessee incurs any expenditure exceeding Rs.10000/- which is allowable for computing income under the head business or profession. 2.The assessee has made payment or aggregate of payments in a day exceeding Rs.10000/- in cash. If the above two conditions are satisfied, then whole of the expenditure shall be disallowed under this section. In case where payment is made to the transporters for plying, hiring or leasing goods carriages, then amount of Rs.10000/- shall be increased to Rs.35000/ in the above two conditions.
Clause 21(e): Provision for gratuity not allowable u/s 40A(7)	The deduction under this section is allowed in relation to a provision created for payment of contribution to an approved gratuity fund only if such sum is actually payable during the year.
Clause 21(f): Sum payable by assessee as an employer not allowable u/s 40A(9)	Any sum paid by the assessee as an employer not allowable under section 40A(9). Any payment incurred by an employer towards setting up of any fund, trust, Company, AOP, BOI, Society, etc will not be allowed as a deduction subject to certain exceptions.
Clause 21(g): Particulars of any liability of a contingent nature	Only the expenses which are debited to P&L account but those are contingent in nature are to be reported under this clause.
Clause 21(h): Expenditure incurred for which deduction inadmissible u/s 14A
Clause 21(i): Amount inadmissible under proviso to section 36(1)(iii)
Clause 22: Amount of interest inadmissible u/s 23 of MSME Development Act, 2006	Give a note as to reliance on certificate received from assessee as regards List of Udyam registered suppliers who are micro or small enterprises as defined under MSME Development Act, 2006 and Disclosures required u/s 22 of MSMED Act. Where information cannot be given as not available from records of assessee, suitable note/disclaimer may be given.
Clause 23: Payments to persons specified u/s 40(A)(2)(b)	This section basically disallows expenditure incurred by way of payment to specified persons (relatives) if the assessing officer finds them to be excessive in nature. Only items debited to P&L account need to be reported.
Clause 24: Amounts deemed to be business income under section 32AC/32AD/33AB/33ABA/33AC	State the fact of reliance on separate audit reports obtained by assessee under relevant sections where applicable.
Clause 25: Amounts deemed to be profits and gains chargeable to tax u/s 41
Clause 26: Sums covered by section 43B	State that status of payments is as of date of signing tax audit report.
Clause 27(a): Cenvat Credit/ITC availed of/ utilised and treatment in P&L
Clause 27(b): Prior period items debited or credited to P&L
Clause 28: Gift of shares received u/s 56(2)(viia)	Any gift or property received without consideration or inadequate consideration from closely held company within the meaning of sec 56(2)(viia) during the year from any person other than relatives (More than Rs. 50000), if yes, it is required to furnish details thereon.
Clause 29: Share premium received by closely held companies in excess of FMV taxable u/s 56(2)(viib)	In case of un-listed companies premium can be considered as income in case the price charged at the time of issue of share is more than the face value (that is at premium) and is also higher than fair market value. In such a case , excess of issue price above the fair market value will be considered as income of issuing price.
Clause 29A: Amounts chargeable u/s 56(2)(ix)	State the information provided is limited to what appears in assessee’s books of account relating to his business/ profession and subjected to audit.
Clause 29B: Gifts/deemed gifts chargeable u/s 56(2)(x)	State that information provided is limited to what appears in assessee’s books of account relating to his business/profession and subjected to audit.
Clause 30: Hundi transactions	State the fact of reliance on management certificate that cheques/drafts by which payments were received/ made were account payee. Alternatively, a disclaimer can be given that it was not possible to verify whether the cheques/ drafts in transactions were account payee.
Clause 30A: Secondary Transfer Pricing Adjustments	State fact of reliance upon certificate from assessee
Clause 30B: Thin cap Adjustments	State fact of reliance upon certificate form assessee in Tabular format
Clause 30C: GAAR (Nature of the impermissible avoidance agreement)
Clause 31(a): Particulars of each loan/deposit in an amount exceeding the limit in section 269SS taken or accepted during the year	Taking a loan or advance or specified sum exceeding Rs. 20,000.00 Otherwise than by way of an account payee cheque or bank draft or use of a bank account through ECS would attract a penalty equal to the amount borrowed Details of all loans or specified sums taken exceeding Rs. 20,000.00 are provided herein Specified sum – any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place
Clause 31(b): Particulars of each specified sum in an amount exceeding the limited in section 269SS taken or accepted during the year	Cash Loan from Partner would not attract the provisions of Section 269 SS Surendra Engineering Corporation v. JCIT 180 ITD 708 Mum Cash Loans obtained from sister concerns and Cash was needed for urgent payment to labourers PCIT v. Akash Infra Com Projects Pvt Ltd 6 NYPCTR 734 Orissa High Court judgment dated 30th June 2022 Cash was deposited in Assessee’s Bank A/C by his friend for obtaining Demand Draft in favour of Excise Department .Since the nexus was proved it was considered out of the purview of Section 269SS and 269T Sunil Kumar v. Addnl CIT 33NYPTTJ 26 Jaipur Tribunal
Clause 31(ba): Particulars of each receipt in an amount exceeding the limit in section 269ST where receipt is otherwise than by cheque/ DD/ECS	Repayment of Loan by wife to husband .Since transactions in the nature of Gifts its outside the purview of Section 269T Savita S Gangadshetti v JCIT 34 NYP TTJ 107 Bangalore ITAT No penalty u/s 271 E in the absence of Regular Assessment. Vijayaben G Zalavadia v. JCIT 36 NYPTTJ 682 Ahmadabad Tribunal
Clause 31(bb): Particulars of each receipt in an amount the limit in section 269ST where receipt is by cheque or DD other than account payee	Fact of reliance on certificate form management regarding whether cheque or draft by which payment were received were account payee.
Clause 31(bc): Particulars of each receipt in an amount exceeding the limit in section 269ST otherwise than by cheque/DD/ECS
Clause 31(bd): Particulars of each receipt in an amount the limit in section 269ST where receipt is by cheque or DD other than account payee	Fact of reliance on certificate form management regarding whether cheque or draft by which payment were received were account payee.
Clause 31(c): Particulars of each repayment of loan or deposit or any specified advance in an amount exceeding the limit in section 269T	Fact of reliance on certificate form management regarding whether cheque or draft by which payment were received were account payee.
Clause 31(d): Particulars of each repayment of loan or deposit or any specified advance received in an amount exceeding the limit in section 269T
Clause 31(e): Particulars of each repayment of loan or deposit or any specified advance received in an amount exceeding the limit in section 269T	Fact of reliance on certificate form management regarding whether cheque or draft by which payment were received were account payee.
Clause 32: Unabsorbed loss or depreciation	–
Clause 33: Amounts admissible as deductions under chapter VIA or chapter III	Give a note that information is given as per books of account of assessee. State the fact of reliance on separate audit reports obtained by assessee under relevant sections. State the fact that deduction is subject to computation of GTI and assessee’s draft computation relied on.
Clause 34: Reporting on compliances with TDS/ TCS	If any difference of opinion with assessee on applicability of TDS/TCS, report it appropriately. Suitably qualified answer on opinion on applicability of TDS/TCS where Yes or no answer not possible. Mention case law relied on. Mention fact of reliance on certificates from CA in Form 26A furnished to assessee by payees.
Clause 35: Quantitative Details of principal items of goods traded	Reliance on certificate from assessee.
Clause 36: Details of Dividend received	——-
Clause 36A: Whether the assessee has received any amount in the nature of dividend as referred to in sub-clause (e) of clause (22) of section 2?	Reliance on Certificates from assessee.
Clause 37: Cost Audit Report
Clause 38: Central Excise Audit Report
Clause 39: Audit for valuation of taxable services	—–
Clause 40: Accounting Ratios such as GP Ratio, NP Ratio, Stock Turnover Ratio etc.	If consistency between numerator and denominator is not there in ratio calculated, report the same.
Clause 41: Details of demands raised or refunds issued under tax laws other than Income-Tax Act,1961 and Wealth Tax Act, 1957
Clause 42: Statement of Financial Transactions
Clause 43: Furnishing Country by Country Reporting u/s 286(2)	Fact of reliance upon certificate from assessee.
Clause 43 (a). Whether the assessee or its parent entity or alternate reporting entity is liable to furnish the report as referred to in sub-section (2) of section 286
Clause 43 (b). Please furnish the following details	Whether report has been furnished by the assessee or its parent entity or an alternate reporting entity? Name of parent entity Name of alternate reporting entity (if applicable) Date of furnishing of report
Clause 43 (‘c). Please Enter Expected date of furnishing the report
Clause 44: Break-up of total expenditure incurred as in respect of GST registered entities and in respect of unregistered entities.	Where client unable to provide details of break- up as he has not maintained it, state the fact and preferable also reason why he has not done so.