ICAI seeks to defer Implementation of Revised Form 3CD [Read Letter]

The Institute of Chartered Accountants of India ( ICAI ) had requested the Central Government to postpone the newly revised Form 3CD in the next Financial year i.e., 2019-20.

Tax Auditors of a certain class of Assessees shall file Form 3CD in the prescribed format. Presently, the companies that are not subjected to tax audits are required to furnish GST details.

The Central Government, on 20th July, has revised Form No. 3CD and extended the scope of tax audit cases.

Form 3CD is a Form in accordance with Rule 6G(2) and Section 44AB of the Indian Income Tax Act, 1961. The Form is a part of the process of filing Income Tax Returns in India and is an Annexure to the Audit Report. Form 3CD contains 32 Clauses. It is required to be attached with Forms 3CA or 3CB, as applicable.

In a representation made to the Central Board of Direct Taxes (CBDT), the ICAI said that due to the revisions made in Form No. 3CD vide the aforesaid notification, various new clauses/ sub clauses have been inserted, major amendments have been made and some additional disclosures are to be reported.

“Moreover, the Direct ‘Faxes Committee of KAI will have to revise its ‘Guidance Note on ‘Tax Audit under section 44AB of the Income-tax Act, 1961’ with regard to changes made in Form No. 3CD and for providing guidance to members. Therefore, we fervently request your good self to kindly implement the new forms from Assessment Year 2019-20 to ensure smooth operations & also for timely compliance,” ICAI said.

The applicability date specified in the Notification is 20^th August 2018. As per the representation, it will cause discrimination between two sets of assessees, those who could file Form 3CD before the cut- off date and those who will file after the cut- off date. Many audits have started and it’s not possible to complete it by19th August 2018 and moreover, the time given to implement new forms is very less which will make it difficult for the taxpayers to comply their statutory obligations in a timely and effective manner.

The ICAI has suggested that changes made in Form No. 3CD be implemented from AY 2019-20 for smooth implementation and compliance. It is further suggested that the new clauses may be reconsidered and appropriately modified preferably after due consultation with the stakeholders.