CAN TAX AUDIT REPORT BE REVISED?

Section 44AB read with rule 6G prescribes provisions relating to revision of the tax audit report
The Income Tax (Eighth Amendment) Rules, 2021 has inserted sub-rule (3) in rule 6G that provides for reasons to revise tax audit report.

FIRST LET US TAKE NOTE OF THE DUE DATES FOR COMPLIANCES-FY 21-22

FOR NON-TRANSFER PRICING CASES
Tax audit report filing due date for FY 2021-22 - 30th September 2022, tax returns filing due date in such cases is on 7th November 2022 [recently extended from 31st October 2022]

FOR TRANSFER PRICING CASES
Tax audit report filing due date for FY 2021-22 - 31st October 2022, tax returns filing due date in such cases is on 30th November 2022

POSSIBILITY OF DIFFERENCE IN NUMBERS BETWEEN TAX AUDIT REPORT AND TAX RETURNS

Tax audit report mandates reporting TDS defaults u/s 40 and also disallowances u/s 43B. Since, assessee gets a month more after tax audit due date to file tax returns, assessee may remit TDS or pay Statutory liabilities which gives eligibility to claim expenses and deductions U/s 40 and U/s 43B that are disallowed as per Original Tax audit report

This leads to difference of disallowances disclosed in Original Tax audit report and that reported in tax returns. In order to ensure this difference is addressed and reported in a reconciled manner, tax audit report has been allowed to be revised by the tax law itself now with amendment to Rule 6G

POSITION PRIOR TO FY 21-22
Guidance note on Tax audit issued by ICAI allowed Tax audit revision for the following reasons –
(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’s circular, judgments, etc.
(iv) Any other reason like system/software error requiring change in report already uploaded.

CONCLUSION
The number of tax audit revisions is not prescribed, hence multiple revision of tax audit report is possible – however from perspective of professionalism and resulting ambiguity in multiple revisions, such multiple revisions should be discouraged voluntarily by assessee and the tax auditor.

CBDT provides for uploading Revised Tax audit report in the online portal and hence IT WAS and IS ALLOWED.