Disclosure in Tax Audit Clause 44



Quick Summary
Clause 44 of the Tax Audit requires a breakdown of total expenditure, including purchases. Auditors must verify these details on a test basis. If an assessee cannot provide the required information, the auditor should make an appropriate disclosure or disclaimer, noting that such details might not be maintained if not statutorily required by GST or supported by accounting software.

In this article author has shared the matter for qualification regarding clause 44 of the Tax audit

In this clause heading of the table which starts with the words "Breakup of total expenditure" and hence the total expenditure including purchases as per the above format may be given. It could also be noted that if the department wanted Head-wise bifurcation, “Nature of Expenditure” would have been given in the utility or the department would have given the space to provide for the same. Hence, head-wise / nature wise expenditure details is not envisaged in this clause.

Clause 44 Tax Audit: Understanding Expenditure Breakdowns

(a) If assesssee provide every details required under clause 44 of Tax Audit then we should thoroughly check and verify the details. The Tax Auditor should verify the details on a test check basis and retain the same as part of his working papers.

(b) If the assessee is not in a position to give the details as required in clause 44, an appropriate disclosure/disclaimer may be made by the auditor in Form 3CA/3CB.

As informed by the assessee, the information required under Clause No. 44 of Form 3CD has not been maintained in absence of any disclosure requirement thereof under the Goods and Service Tax Act. Further the standard accounting software used by Assessee is not configured to generate reports as required under this clause in absence of any prevailing statutory requirement. Therefore, it is not possible to determine the break-up of total expenditure of entities registered or not registered under the GST. In view of the above, we are unable to verify and report the desired information in this clause.

 

For any inquiry you may write us on: ramanujan.ca@gmail.com

Disclaimer: The information provided by the author in the article is for general informational purposes only. All information provided is in the good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information in the article.

 

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About the Author

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I am a practicing Chartered Accountant working in the field of GST, Income Tax, In banks particularly Concurrent Audit, Revenue Leakage Audit, Stock Audit, Statutory Branch Audits, Statutory Audits of various corporates, Tax Audit , Corporate Laws Compliances, Advisory of Listed and unlisted companies and related matte ... Read more

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