Stock value correction

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If an error is found in the closing stock value after financial statements and the Tax Audit Report (TAR) have been finalised and uploaded, it's possible to revise these documents. The accounts should be disclosed as 'revised accounts' and the TAR as a 'revised tax audit report'. It's advisable to accept the already filed TAR so the revision is considered, and there's a good chance any penalty under section 271B might be waived, especially if the auditee hasn't yet approved the original report.

PARAS CHHAJED

PARAS CHHAJED

(Querist)

17 January 2021 Financial statements were finalised and uploaded with Tax Audit Report. There has been an error in the value of closing stock. What recourse is available for correction of the same. Can one revise the profit and loss account and balance sheet and tax audit report ? Please guide. Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

17 January 2021 Yes revise accounts and tax audit.

PARAS CHHAJED

PARAS CHHAJED

(Querist)

17 January 2021 How to disclose revision in accounts and tax audit report ? What reason to be cited for such a revision of Financial Statements and Tax Audit Report ? How to make proper disclosure in this regard in statements and report ? What are the Tax Implications ? What about penalty u/s 271B. The TAR was uploaded on 15th January 2021 and has not been approved by the auditee. Kindly advise. Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

18 January 2021 In the accounts disclose it as revised accounts.
In tax audit report disclose it as revised tax audit report consequent on revision of accounts.
Accept already filled tax audit report, so that revision will be considered.
Expect penalty will be waived.

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