Consequences of revision of tax audit report u/s.44 ab

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Dhanunjaya (Querist)
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02 December 2014 Dear Audit Professionals,

1. Under what circumstances TAX AUDIT REPORT U/S.44 AB of a Sole Proprietorship can be revised ?

2.If after filing I.T returns & TAX AUDIT REPORT,any changes in financials (Say Sales & Purchases) was found , What is the Steps to be taken for Revision of TAX AUDIT REPORT already filed ? What is the Legal Consequences for AUDITOR ?

Thanks in Advance for your kind replies...

Amol S Joglekar

Amol S Joglekar (Expert)
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02 December 2014 Who has found it out? Auditor OR Assessee?
Make a distinction between accounts writing and auditing. If client has found out that some sales/purchases are not recorded in the books of accounts; that has been given by him to his auditor for AUDIT....Auditor has very little risk in it except of course, "mistake apparent from record"
TAX audit report is NOT supposed to be revised.

Dhanunjaya

Dhanunjaya (Querist)
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02 December 2014 Dear Amol S.Joglekar,

Thanks for your reply,

Assessee has found that some of the Purchases Bills has not been considered in Books and has not been provided for Audit.Later after filing Returns, he has informed to the Auditor.Now what are the Steps to be taken by the Auditor ?

Amol S Joglekar

Amol S Joglekar (Expert)
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02 December 2014 Take a "management letter"/ declaration from the assessee to that effect covering the entire RISK.
Make a "supplement" to the ORIGINAL audit report and send it to the jurisdictional Assessing Officer.

Dhanunjaya

Dhanunjaya (Querist)
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02 December 2014 Dear Amol S Joglekar,

As replied by you,

By taking the Management representation Letter,Can we revise the Tax Audit Report & do e-filing (3 CB & CD) enclosing the revised financials along with the MANAGEMENT REPRESENTATION LETTER?

Amol S Joglekar

Amol S Joglekar (Expert)
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02 December 2014 No, that is the problem. We can upload only once for the financial year. That is why I said, send it to Jurisdictional Assessing Officer.
This being EXCEPTIONAL case, SOP is NOT laid down. It is a judgement oriented call. We need to do such a thing which will in addition to protecting clents interest, shall NOT waive out TRUTH and FAIRNESS of audit.

Dhanunjaya

Dhanunjaya (Querist)
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02 December 2014 Dear Amol J Joglekar,

As per ICAI guidance note on Tax Audit report,
Circumstances for revision of Tax Audit Report is given as follows :

"sometimes a member may be required to revise his tax audit report ongrounds such as:
(i) revision of accounts of a company after its adoption in annual general meeting.
(ii) change of law e.g., retrospective amendment.
(iii) change in interpretation, e.g. CBDT Circular, judgements, etc"

What is the implication of the Fisrt ( (i) as above) ground on Sole Proprietorship. The Books has been revised and the Sole Proprietor has given Management Representation Letter with respect to the Changes. Can the Auditor revise on this ground?

Amol S Joglekar

Amol S Joglekar (Expert)
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02 December 2014 Please, it is a guidance.
Let us NOT stretch ourselves to compare (i) which is for company and NOT sole proprietory concerns.

The assessee has changed the books of accounts AFTER your audit is over. So let it be. No implication for the auditor.

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