[Opinion] Revision of Tax Audit Report

CA Mukesh Kohli – [2023] 154 taxmann.com 259 (Article)

We all professionals sometimes face the situation that after the issuing the tax audit report, the assessee may deposit the tax deducted at source referred to in sub clauses (i) or (ia) of clause (a) of section 40 or deposit the tax, duty, cess, fee or other payments referred to in section 43B deduction of which is allowed on actual payment basis. The assessee considered the payments made u/s 40(a)(i)/40(a)(ia) and or 43B while submitting the return of income under section 139(1) as the due date of return of income of these assessees is 31st October where as the last date of tax audit is 30th September.

On the other hand the CPC while processing the return of income, disallow the expenditure indicated in the tax audit report.

Now a question arise whether the tax audit report can be revised after the deposit of TDS referred to in sub clauses (i) or (ia) of clause (a) of section 40 and or Tax, duty, cess, fee or other payments referred in section 43B.

Analysis

The Income Tax (Eighth Amendment, Rules 2021) inserted clause 3 to Rules 6G of the Income Tax Rules w.e.f. 01.04.2021 which is as under: –

The report of audit furnished under this rule may be revised by the person by getting revised report of audit from an accountant, duly signed and verified by such accountant, and furnish it before the end of the relevant assessment year for which the report pertains, if there is payment by such person after furnishing of report under sub-rule (1) and (2) which necessitates recalculation of disallowance under section 40 or section 43B.

Now the ICAI has recently released the Guidance Note on Tax Audit u/s 44AB of the Income Tax Act, 1961. The Guidance Note 2023 makes a lot of changes in recommendations vis a vis Guidance Note on Tax Audit 2022 u/s 44AB of the Income Tax Act, 1961. One of the changes made by Guidance Note 2023 relates to revision of the tax audit report also.

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