Amendment of Form 3CD – why from 20th August 2018 and not for particular assessment year? Forms specific to assessment year may be provided as in case of year specific ITR forms

[CA DEV KUMAR KOTHARI]

Links and references and applicable  provisions:

Section 44AB , section 295 of the Income-tax Act, 1961 (43 of 1961)  

 Income-tax Rules, 1962 -  Appendix II,  and  Form No. 3CD.

For relevant provisions links of Sections and Rules, as available in  forms available on the website can be used.

Form 3CD – annexure to Form 3CA or 3CB (TAR):

The readers are generally aware about Tax Audit Report in form 3CA, and 3CB to which form 3CD and audited accounts are annexed.

Form 3CD is for compilation of information:

Form 3CD is an important compilation form for various details relevant to assesse which are useful for ascertaining amounts allowable and disallowable in computing income, compliance and defaults of certain important provisions affecting determination of income and indicating defaults which can attract penal provisions.

Provisions may have some differences from year to year:

As we are aware every year there are lot of amendments in the Income-tax  Act and Income-tax Rules. Such amendment affect relevant provisions about which reporting is to be made in TAR.

Therefore, we find several clauses of Form 3CD which are applicable to many of past years and current years, whereas many clauses are not applicable in some of years.   

Recent amendment:

Vide NOTIFICATION NO. 33/2018 dt. 20th July, 2018 form 3CD is amended and amendments shall come into force from the 20th day of August, 2018.

The amendments are to take care of some new provisions requiring reporting by tax auditors.

As per general understanding , published material , group discussions, it is understood that the amended form will have to be used when tax auditor  renders his report on or after 20.08.2018 it may be for any year – AY 2018-19 or even for earlier years ( in case of belated reporting or revised reporting).

Suppose a report for AY 2017-18 or earlier year is to be filed / uploaded, and it is after 20.08.18, then it should be as per revised form as it stands as on the date of reporting. Suppose TAR is rendered /uploaded before 20.08.18 it has to  be in pre-amended form even for AY 2018-19. This is not proper, and is not in sync with provisions applicable or not applicable for reporting year.

From 3CD should be specific for each year:

As different provisions may prevail or applicable in different years, it is advisable that for each assessment year tailor made forms can be provided to take care of applicable provisions.

It is worth to mention that for each assessment year , separate  different  ITR forms are being prescribed to take care of applicable provisions to the year and to the type fo assesse. The same practice should be applied for Forms like Form 3CD

Amendment should have been timely:

For AY 2018-19, on can file ROI even on 1st April, 2018. In case of TAR, due date for filing of  ROI and TAR is 30th September.

Applicable provisions and desirable amendment in Form 3CD for AY 2018-19 were well known much earlier. Therefore, it was desirable for CBDT to have notified amendments well in advance. On the date of notification that is 20.07.18 about four months have lapsed during which assesse could have obtained,  filed or uploaded  TAR for AY 2018-19.

Amendment has been notified on 20.07.18 and it will take considerable time to concerned people to be aware about it and also in understanding the same.

Time left for last date to file TAR (due date 30.09.18) is short. Therefore, it is desirable that due date in case TAR is applicable be extended well in advance.

NOTIFICATION NO. 33/2018 Dated 20/07/2018