RECTIFIED
- 50 TAX AUDIT PROBLEMS AND SOLUTIONS
BY
CA NITESH MORE, KOLKATA
INDEX
NOTE
– THE QUESTIONNAIRE HAS BEEN HYPERLINKED.
PRESS
CONTROL (CTRL) AND CLICK ON ANY ISSUE IN INDEX TO GO TO THE RELEVANT ANSWER
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OTHER ISSUES
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5. Attachments
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FREQUENTLY ASKED QUESTIONS ON E-FILLING
OF TAX AUDIT REPORTS - TECHNICAL ISSUES
Q1. What are the steps to be followed for E-filling of Tax Audit
Report?
Ans. Step
1- One Time Registration of Chartered Accountant at E-filling website
Step 2 – Login to Assessee account at
e-filling website and Add CA
Step 3 – Downloading, Preparing Tax
Audit Report Utility & Generating XML file.
Step 4 – Uploading XML file at
E-filling website from CA’s Login Id
Step 5 – Approval of form uploaded by
CA at E-filling website from Assessee’s Login Id
Step 6 – Do not forget to file Income
Tax Return in Relevant ITR separately
Q2. What are operating system and runtime environment requirement
for E-filling of Tax Audit Report?
Ans. Operating
System – Windows XP with Service Pack 3/ Windows 7/ Windows 8.
Runtime Environment – JRE 1.7 Update 6
and above, 32 Bit is required to run applets for offline forms to work.
Q3. Our system becomes very slow during working on e-utility. What
should we do?
Ans. Remove
all old versions of Java to improve performance. Better use Google chrome. Can also use Mozilla Firefox.
Q4. I am unable to register as CA
as there is difference in name/date of birth as per ICAI and PAN data. What to
do?
Ans. It is requested to file form
49 amendment and get data rectified in PAN immediately. Kindly also note that
the day you receive a SMS that your pan amendment has been approved, you will
be able to register at site whether you actually receive PAN or not.
Q5. What are the documents to be attached to Tax Audit Report?
Ans. B/S,
P&L, Schedules, Annexures, Notes, Cost Audit Report and Excise Audit and
Other Report, if any, scanned in pdf format
after being duly signed by Assessee and
CA, whether digital or physical. Kindly note that word/excel file can also be
digitally signed.
Q6. System is not accepting negative figures in brackets i.e. “()”.
What should we do?
Ans. Use
negative sign. i.e. minus “-“
Q7. Due to nature and complexity of the business of the assessee, we
do not have quantitative information about the stock. The software is not
accepting any comment and it is accepting only numeric value. What should we
do?
Ans. Kindly
note that Quantitative details of only principle items is to
be given. However, in my opinion, if details are not available,
a)
Write nil in online form 3CD &
b)
Report why quantitative details is not provided in the following two places:
i)
In paper form 3CD &
ii)
Notes to accounts
c)
The Following Statement Should Be Written In Paper Form 3CD As Well As Notes:
"Due To Nature & Complexity of Business of Assessee, It Is Not
Possible To Provide Quantitative Details"
Q8. An assessee had purchased, say 5000 assets. His details of purchase
are there in schedule. Online form 3CD again requires filling each purchase. It
is a huge task resulting duplicity of work.
Ans. In view of our time constraint, such fixed assets may be grouped
into different blocks of assets and each
of these groups can be further divided into 2 parts.
i. Assets put to use on or before 2nd October:
For ease of entry in online form 3CD, we will argue that all assets were put to
use on 2nd October, wherever possible.
ii. Assets put to use after 2nd October
(eligible for half of depreciation): For ease of entry in online form 3CD, we
will argue that all assets were put to use on 31st March, wherever
possible.
It is also advised to attach the working of calculation of
depreciation under the Income Tax act, 1961 as a schedule so that breakup of
each group is easily visible to the IT department.
The above can be summarized in the following steps:
Step 1 - All fixed assets may be grouped into different blocks of
assets.
Step 2 - Each of these groups can
be further divided into 2 parts. (i)
Assets put to use on or before 2nd October (ii) assets put to use
after 2nd October (eligible for half of depreciation)
Step 3 - For assets brought on or before 2nd October, we can
argue that those assets were put to use
on 2nd October and accordingly relevant entries can be made in the
online form 3CD.
Step 4 - For assets brought after 2nd October, we can argue
that those assets were put to use on
31st March and accordingly relevant entries can be made in the
online form 3CD.
Step 5 – Sale of assets for each of group should be entered
in a separate row while filling online form 3CD.
Step 6 - It is also advised to attach the
working of calculation of depreciation under the Income Tax act, 1961, as a
schedule, so that breakup of each group is easily visible to the IT department.
Q9. I filled stock details in point 28A.
When after validating and saving, I reopen the form; only one stock figure is
displayed.
Ans. It is the
inherent problem of the software but your xml file contains the correct data.
Open the xml file in Internet Explorer and check it. You can edit xml file,
however you have to adopt unceremonious way to edit the xml file for the
necessary correction for the item in subsequent rows of point 28A. Therefore it
is advised to fill up point 28A before filling any other point from point 7
onwards.
Q10. We have received demand
relating to AY 2012-13, for almost for all companies for which income tax
return were filled using Webtel software. The demand pertains to non-deduction
of deprecation u/s32 in the return processed u/s 143(1) by CPC Bangalore, as
claim by us in ITR 6. I just want to know if any other user of Webtel are also
facing same problem.
Ans: The
Problem Was Faced Many CA Using Webtel Software Due To Non Updation. I Suggest
Submitting Revised Return or Making Rectification U/S 154.
Q11. In online Form 3CD, nature of business is to be mentioned i.e.
Trading/Manufacturing & Retailer/ Wholesaler, but there is no space given
for a particular commodity, say, cloth/ medicine/ cement. What should we do?
Ans. You can
select, say, retailers & thereafter choose others (i.e. 104, 204, etc as
applicable).
Q12. If any businessman having a cloth business & also keeps
photocopy machine/ agent of LIC, the income from photocopy machine / commission
received from LIC is used for calculating the NP ratio. If so, then in this
case GP ratio is less then NP ratio. So what to do about it?
Ans. You have
to calculate NP ratio as a whole of the business for which tax audit was
conducted.
Q13. When we reopen draft saved xml file, many fields which we had
already entered is showing blank.
Ans. The
software has some inherent errors as a result when we reopen draft saved xml
file, it shows blank i.e. we have to re-enter the fields again. These fields
are 7(B), 8(B), 9(A), 10, 11(D), 12(B), 21(Notes), 22(A), 22 AND 23.
Q14. How we can view data of XML before
uploading?
Ans. You can view the xml file of tax audit report prepared in e
utility of department. CA P.K. Agarwalla has prepared the screen shots of the
process to view the same. The process is as follows:
Go to Programme à Microsoft Office à Microsoft Office Access 2003/2007 à New blank data
base à Click blank data base à A window with file name database1.accdb
will appear on the right hand side pane. Ã Click on create. Your new date base is saved by default in my
Documents. (You may save the same to your choice folder)
A new data base is opened. Go to and click External data à Click XML
file>Browse the xml file for which you want to create/view or save the data à Click OKà Import XMLà Click OKà Check the box
"Save import steps"Ã Close.
Your data base is ready, on the left hand side pane the indexes
for “All Tables” do appear. By clicking any Table/ any point you can easily
view and save its contents presently appearing in the XML file. Once the xml
file is saved and the data base is reopened it will show the updated entries
lying in the XML file. If some member finds any error in the tables he can
easily make corrections opening the utility.
Detailed procedural step for Microsoft Access Office 2007 as
well as Microsoft Office 2003 is attached
(2 files attached – namely “Importing
XML in MS Office 2003 version” & “Importing XML in MS Office 2007 version” herewith for ready
understanding.
Q15. There is no provision for saving or
printing downloaded Forms 3CB-3CD, or XML file.
Ans. U can save
the work in middle by using “Save Draft” Button. To view the print option opens
the xml file in Microsoft Access 2007 using new projects. U can find the Data
in tabular form.
Q16. When we are uploading
the 3CA and 3CD online one error is coming cannot read fake path file. I have
placed the XML file in c drive fakepath folder and using Google chrome for
that. Please help on the issue.
Ans. Kindly check the name of folder is “fakepath” and not as fake path, in C
drive.
Q17. We uploaded form 3CD of a client.
When it is viewed from the client’s login (i.e. for approving or rejecting),
the dates in point no. 16(b) of form 3CD is getting interchanged (i.e. in the
due dates column actual dates are seen and vice versa). But there is no mistake
at our end. We have filled in the data in the income tax offline utility
correctly and generated xml.
Ans. Your XML
File contains the right data. Do not worry, upload it.
Q18. CA has no option to print uploaded xml files. How to print?
Ans. CA
has no option to print uploaded xml files. However, it can be printed from
assessee’s login id, even before approval by assessee as the said xml file can
be downloaded, from assessee’s login id, in the pdf format by default.
Q19. A Chartered Accountant in practice
registered himself with his DSC in the e-filing website. But he neither
received any sms nor any activation link in his e-mail. When he tried again to
register himself, the message was that he is already registered. But when he
tried to log in, it was informed that the link is not activated. What should he
do now?
Ans. Go to login page
and enter your User ID i.e. ARCA(Mem.
No.) e.g. ARCA300700 and enter your Password as given then click on
"Resend Activation Link". You will get a mail from the site. If it
does not work then reset your Password by sending mail at validate@incometaxindia.gov.in.
20. I had uploaded
one Form 3CD, 10 days back and same was reflecting in my log in and I also
received message for uploading. Now when I go to assessee log, same form is not
available for validation. When I try to re-file from my log in I am getting
massage that you are already submitted and assessee has not rejected/accepted.
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