ICAI’s implementation guide
on Tax Audit Report covers amendment to Tax Audit Report (Form 3CD) which are
effective from August 20, 2018 and thus, does not discuss GAAR and GST
reporting (under clause 44); Clarifying on reporting relating to secondary adjustments,
Guidance states that in cases where amount of imputed interest income
on the excess money not repatriated to India relates to more than one
year, “Prima-facie, it appears that reporting of such interest is not
required to be reported under clause 30A(b)(v) since Clause 30A requires
reporting only in relation to primary adjustment made during the relevant
previous year”; However, ICAI Guidance also stresses that “it may be advisable
for the taxpayer to furnish and tax auditor to verify and report the
information pertaining to such primary adjustments in respect of interest
income which is chargeable u/s. 92CE(2)” as the return filing utility may
synchronize the parameters of imputed interest u/s 92CE(2) as offered in the
return of income with the parameters stated in the Tax Audit Report; With
respect to reporting of interest limitation u/s 94B, ICAI Guidance clarifies
that “The computation of “excess interest” as per section 94B(2) should be
within the boundaries of interest referred to in s.94B(1), which is NR AE
interest”; Regarding disclosure of CbCR information, the Guidance clarifies
that “the tax auditor is not required to comment upon correctness or
completeness of the report filed under section 286(2)”; Further, apart from
highlighting the widened scope of reporting requirements in respect to TDS/TCS
returns, the Guidance clarifies on applicability of Sec. 269ST reporting (for
cash transactions exceeding Rs. 2 lakh threshold) to Govt. companies and to
capital and revenue payment / receipts; Regarding reporting of
deemed dividend u/s. 2(22)(e), the Guidance suggests that the tax auditor may
arrive at the accumulated profits by appropriating the profit for the year on
time basis, where he may not have access to the records of a closely held company
making payment during relevant financial year.
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