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Furnishing of report in form 3ca and 3cd - in the case of comp

A CHENCHUMOHAN (CHARTERED ACCOUNTANT) (48 Points)

24 August 2011

I have a company. There is NO TURNOVER - NO INCOME. Only Revenue Exps. RESULTING IN LOSS.

In such case, SEC 44AB is not attracted. Then is it required to furnish (or get) the CA report in Form 3CA & 3CD. Since, there id no turnover/gross receipts and the assessee being company is not covered by 44AD (New). Even if we consider 8% of 0 turnover = 0 and Loss claimed will be less than this, THEN is it required to furnish the FORM 3CA & 3CD.

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11 Replies

CA Mukul Mittal (CA in practice) (384 Points)
Replied 24 August 2011

as the company has no turnover, the company is neither covered under the purview of section 44AB nor under 44AD. therefore, no requirement of audit under income tax.................

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 24 August 2011

corporate identity is under compulsary audit.

N GANESHAN. (CA FINAL STUDENT - PRACTITIONER) (921 Points)
Replied 24 August 2011

Sirs-The Form 3CB & CD are prescribed in IT Rules. As per the Income Tax Act IT Act no audit is required upto 60 Lakhs for the asst year 2011-12 Once thre is no audit there is no 3CB & CD forms. Your co. reported a Sales Turnover / Receipts of less than 60 lakhs Hence no forms are to be filed with ITDept But you have to file your return under appropriate ITR Hope you got the answer

N GANESHAN CA FINAL

Regd IT pracitioner

CA Tarun Jagdish (8893495263) (153 Points)
Replied 24 August 2011

Hey .. But IT ACt says tht for Firms and Companies irrespective of their Turnover .. Tax Audit is required . Its only for Individual and HUF that such a limit of 60 lac is prescribed right

A CHENCHUMOHAN (CHARTERED ACCOUNTANT) (48 Points)
Replied 24 August 2011

My query seems to have been miss-read.

AUDIT is compulsory under the Companies Act.

IT Act says, if Audit is done under any other Act, then there is no need to AUDIT it again under Section 44AB. Hence the Query is not about getting AUDIT under IT Act or Not?. BUT WHETHER the REPORTS under FORM 3CA and 3CD are to be furnished Or Not WHEN THERE IS NO INCOME? Hope, you all study the above point.

The querry arises, since the Section 44AB starts with the words "any person" AND Clause (d) says if the income under 44AD is lower than the DEEMED PROFIT (8%) (get his accounts audited ..)and the report in prescribed form ... (3CA and 3CD) shall be furnished. My query relates to -- IN LOSS CASE technically the Sales/Receipts are below 60 lakhs, the LOSS will be below the DEEMED INCOME. IN SUCH CASE form 3cA and 3CD or to be FURNISHED or NOT?

ASHU SHARMA (CA STUDENT) (194 Points)
Replied 24 August 2011

The Form 3CB & CD are prescribed in Income tax rules. As per the U/S 44AB Of the Income Tax Act no audit is required upto 60 Lakhs for the asst year 2011-12 hence there is no audit there is no need to furnish form 3CB & CD . Your co. reported a Sales Turnover / Receipts of less than 60 lakhs. but company audit are mandatory for everey corporate assessee even there is loss in company instead of income. Hence no forms are to be filed with ITDept without tax audit.

CA Tarun Jagdish (8893495263) (153 Points)
Replied 24 August 2011

Oh k .. Sorry i misread your question.. Form 3CA and 3CD is not required..

Section 44AB has to get attracted in order to go For 3CA.. In your case turnover is less than 60 lacs. More over Section 44AD says "Assessee carrying on business referred in 44AD having income exceeding the basic exemption and declaring income lower than prescribed u/s 44AD. So in your case, Tax Audit is not required..

D.K. Agarwal ( ) (22 Points)
Replied 31 August 2011

As per the Companies Act the Audit is compulsory

Under Section 44AB of the IT Act 1961 as the turnover is nil hence the provision of this section is not applicable.

Shah Tarun (Student) (800 Points)
Replied 08 September 2011

Audit is mandatory under companies act and not under income tax act. . In this case report will contain AR,PL,BS.Schedules,Notes and GBP only. . Form 3ca and 3cd are part of tax audit and not of audit under companies act. .

CA Jay Khetan (Senior Audit Manager) (68 Points)
Replied 05 July 2012

since section 44AB prescribes the threshold limit for audit, any person below the thresold limit is not required by the Income tax act to get themselves TAX audit. BUt since comapanies are registered under comapnies act, they have to get themselves compulsorily audited under Companies Act. Audiors Report, Balance sheet, Statement of Profit and loss, and notes to account would suffice. IF your company is having losses, then you will have to file the IT return which would enable you to carry forward the Business losses. you will have to consider all the taxation laws while computing the business loss to be filed, but this is again not a tax audit. Audit under companied act requires an auditor to verify whether relevant statutes are adhered to or not...... So all u have to do is get audited, and file the return...... Further, you wont require any sort of form prescribed under INcome Tax Act, since you are not required to get audited as per INcome TAx act..... i hope this would further clarify your query..... Kindly correct me..... It would further enhance my understanding