Tax Audit : Detailed Analysis of Clause 39 to Clause 41 | As per ICAI Guidance Note
- Account & Audit|Blog|Tax Audit Week|
- 1435 Views
- |
- 4 Min Read
- By Taxmann
- |
- Last Updated on 31 August, 2022
Latest from Taxmann
1. Clause 39
Whether any audit was conducted under section 72A of the Finance Act,1994 in relation to valuation of taxable services, if yes, give the details, if any, of disqualification or disagreement on any matter/item/value/quantity as may be reported/identified by the auditor.
This clause requires disclosure of any disqualification or disagreement on any matter/item/value/quantity as may be reported/identified by the auditor if audit was conducted under section 72A of the Finance Act, 1994 in relation to valuation of taxable services.
Under this clause, an auditor need not report on the applicability even if the audit under section 72A of the Finance Act, 1994 is not carried out. But if audit is carried, then the details of audit conducted during the year should be obtained from the management and TY] details of disqualification or disagreement on any matter/item/value/quantity, if any, reported/identified by the auditor, shall be duly reported.
In case, where audit under section 72A is not completed, then the tax auditor shall state this fact in the report that such audit is not completed and the audit report is not available with the assessee.
The auditor should provide information only in respect of such time period that falls within the relevant previous year.
2. Clause 40
Details regarding turnover, gross profit, etc., for the previous year and preceding previous year:
For reporting under this clause, following ratios are required to be given for business as a whole and not product-wise related to the assessee engaged in manufacturing or trading activities only.
|
Particulars |
Previous Year |
% |
Preceding previous Year |
% |
|
Total turnover of the assessee |
Total Turnover (Revenue from operations) |
|||
|
Gross profit/turnover |
Total turnover – Cost of goods sold (COGS= Cost of material consumed + change in inventory + direct expenses) |
|||
|
Net profit/turnover |
Net profit ( Net profit or loss before tax) |
|||
|
Stock-in-trade/turnover |
Stock-in-trade (Closing stock of finished goods) |
|||
|
Material consumed/finished goods produced |
Material consumed (Inventory at the beginning of the year + Purchases – Inventory of Raw Material at the end of the year) (include stores, spare parts, and loose tools) Finished goods produced (Raw material and consumables consumption + Direct labour + Other manufacturing expenses excluding depreciation other than on office assets +/- change in stock of WIP) This ratio need not be given for trading concern or service provider |
For the preceding previous year, tax audit figures of that year shall be used, if no tax audit was applicable in the preceding previous year, then nothing should be mentioned in that column.
3. Clause 41
Please furnish the details of demand raised or refund issued during the previous year under any tax laws other than Income-tax Act, 1961 and Wealth tax Act, 1957 along with details of relevant proceedings.
This clause requires details of demand raised or refund issued during the previous year under any tax laws other than Income-tax Act, 1961 and Wealth tax Act, 1957 along with details of relevant proceedings in the below provided format:
|
Financial year to which demand/refund relates to |
Name of other Tax law |
State |
Other |
Type (Demand raised/Refund received) |
Date of demand raised/refund received |
Amount |
|
Mention the financial year to which refund relates Even though the demand/refund order is issued during the previous year, it may pertain to a period other than the relevant previous year. In such cases also, reporting has to be done under this clause |
Like GST/VAT refund or refund under any other tax law. However, cess or duty like Marketing Cess, Cess on Royalty, Octroi Duty, Entry Tax etc. would not be covered as other tax laws |
|
|
|
|
The auditor should obtain a copy of all the demand/refund orders issued by the governmental authorities during the previous year under any tax laws other than Income Tax Act and Wealth Tax Act and verify books of accounts for ascertaining whether any such demand has been raised or refund order has been issued under any other tax law and accordingly report the same.
The auditor should verify the details from online portals of the departments too if the details are available thereon about the refund or demand raised.
The auditor should report under this clause, if there is any adjustment of refund against any demand.
Dive Deeper:
Detailed Analysis of Clause 9 to 12
Detailed Analysis of Clause 13 and Clause 14
Detailed Analysis of Clause 15 and Clause 16
Detailed Analysis of Clause 17 to Clause 19
Detailed Analysis of Clause 20 and Clause 21
Detailed Analysis of Clause 22 to Clause 25
Detailed Analysis of Clause 26 to Clause 29
Detailed Analysis of Clause 30 to Clause 30C
Detailed Analysis of Clause 31
Detailed Analysis of Clause 32 to Clause 34
Detailed analysis of Clause 35 to Clause 38
Detailed Analysis of Clause 42 to Clause 44
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
