CA SUDHIR HALAKHANDI
(PRACTICING CHARTERED ACCOUNTANT)
20 August 2014
Central Board of Direct Taxes,
Re:-DEFERMENT OF NEW AUDIT REPORT TO ASSESSMENT YEAR 2015-16.
Sir, the new format of tax audit report in Form No. 3CA, No. 3CB and No. 3CD through Notification No. 33/2014 dated 25/07/2014 were introduced on 25th July 2014 and is made applicable on the same day. In this respect we want to state some of the facts as under:-
1 AUDIT ALREADY COMPLETED BUT NOT UPLOADED:-.
The financial yearpreceding to the assessment year 2014-15 was ended on 31/03/2014 and audits for this year were started at any time after that date and completed before 25/07/2014 but the audit report are not uploaded on the IT site. Banks, Insurance Companies, PSUs and other assesses are included in this list. Now the auditors have to revisit them and collect the fresh information as incorporated in the new format.
2. FORMATS SHOULD BE INTRODUCED ON OR BEFRORE 31/03/2014
For assessment year2014-15 the formats should be introduced before 31/03/2014 so that auditors can plan their work in advance and if there is an urgency and need to incorporate more information in the Format then the same should be planned in advance and if there is a delay in drafting, formation and introduction of the same then the very simple and reasonable solution is to make these formats applicable from the next assesseement year which in this case is Assessment year 2015-16.
3. ICAI HAS ALSO REQUESTED POSTPONEMENT
The Institute of chartered Accountants of India (ICAI) , established by an Act in Parliament , is the regulatory body for matters concerning the Audits in our Country and it appears from the representation moved by ICAI to the Hon. Finance Minister, Revenue Secretary andyour good self , as mentioned on the website of ICAI www.icai.org that this apex body was not even consulted before midyear introduction of these formats since ICAI has also requested all the concerned authorities including your good selfto postpone these formats for one year. Since the matter is connected with Audits hence the views of the ICAI should be given proper attention and respected.
4. NO SCHEMA SINCE LAST 23 DAYS
There are clear indications that the Midyear introduction of formats of audit report is not based on proper and basic preparation which is required and essential in this respect. The introduction was suddenbut it is not explained anywhere that what is the urgency of such “sudden and midyear” introduction of these formats.
Sir since last 23 days there is no schema on the Income tax website with respect to thesenew formats of the audit report and this is the clear indication of the fact that it was introduced suddenly and without proper preparation. We are considered as the leading “Information Technology Nation” in the world and it is unbelievable for anybody to imagine that 23 days are not enough to prepare, test and introduce the schema for these formats. This is clear indication that there are “bottlenecks” in the system which has to be removed first and for this purpose planning and time is needed.
5. PLEASE REMEMBER 2013 CONFUSING EXPERIENCE
Sir, please take your time to prepare a proper schema and with proper schema introduce these formats and certainly this will take some more time. We have experience of changing and amending schema on weekly basis and sir this is not proper for the prestigious institution like CBDT. Here is the solution , please postpone these forms, consult ICAI for better and more practical format, prepare the schema , test it for bugs and debug it and make it foolproof and then make it applicable from assessment year 2015-16.
6. WHY TWO FORMATS FOR SAME ASSESSMENT YEAR
Since Some of the audit reports are already uploaded on the site of Income tax department before25th July 2014 hence now there are two types of assessees during the assessment year 2014-15 and the second set of assessees are those whose audit reports were not uploaded before 25th July 2014 and here what is the logic to have two types of audit reports from different types of assessees in the same assessment year. The only reason of this “inequality” is that there are there are two sets of formats of audit reports in this particularassessment year 2014-15 due to this midyear introduction of Formats. The simple solution is that to postpone the New formats to assessment year 2015-16 and continue with the same(existed up to 25/07/2014) formats for all the assessees for the assessment year 2014-15.
7. GUIDANCE NOTE FROM ICAI- WILL TAKE its OWN REQUIRED TIME
Sir, the audit work is not a “Mechanical work” and it requires expert knowledge, study and proper guidance from the ICAI (the apex body of auditors in India) and still “Guidance note” for the new formats for the audit report is not issued by the ICAI. Certainly this will require the consultation from the experts and it is also a task which will take its own time. The situation is created due to “sudden and midyear” introduction of the New formats and should certainly be avoided.
8. EXTEND THE TIME WITH EXISITING FORMATS- 2 MONTHS
Sir, the demand to defer the new formats to assessment year 2015-16 is a reasonable demand hence it is to be accepted by your good self as also demanded by ICAI but sir the whole exercise of this “midyear introduction” has created one more very serious problem which requires your immediate attention.
There is a confusion about applicability of the new formats because there is no schema on the web site of IT department since last 23 days and ICAI has also requested for its postponement to the assessment year 2015-16 hence the audit work and uploading the reports for assessment year 2014-15 has suffered seriously in all these 23 days and due to this loss of 23 days , more time is required to complete the audit in the existing formats (existed up to 25/07/2014) also hence your good self is requested to please extend the time up for uploading the audit report in existing formats (existed up to 25/07/2014) to 30/11/2014.