From time to time ICAI has issued the updated version of Guidance Note on Tax Audit after incorporating the changes/ amendments in applicable laws for information and support of the Members.
In view of substantial changes made by CBDT in 2014 in the formats of tax audit report, the ICAI has last issued the Revised edition 2014 of Guidance Note on Tax Audit, which has not been substituted with any subsequent edition so far and is applicable for AY 2021-22 also, as under:
First edition of the Guidance Note on Tax Audit was published by the ICAI in 1985 after the introduction of tax audit provisions. In order to incorporate changes made by the amendments to the Finance Acts, as well as judicial pronouncements, circulars etc., the ICAI has revised its Guidance Note on Tax Audit from time to time, i.e. in the years 1989, 1998, 1999, 2005 and 2014. The revisions in Guidance Note on Tax Audit of ICAI were mainly triggered by certain significant amendments as follows:
(a) Introduction of Forms 3CA, 3CB and 3CD in 1999 while omitting Form 3CC and 3CE.
(b) Revision of Forms 3CA, 3CB and 3CD in 2004.
(c) Revision of Form 3CD in 2006
(d) Revision of Form 3CD again in 2014 vide Notification No. 33/2014 dt 25 July, 2014.
The ICAI’s Guidance Note on Tax Audit Report comprehensively covers items of Form 3CD in specific for reporting under S.44AB and items of Form 6B in general for reporting under S.142(2A). Besides, the ICAI has published separate Guidance Notes for audit of Public Charitable Institutions under S.12A(b), Report under S.92E of the Act, Report under S.115JB of the Act and Report under S.115JC of the Income Tax Act.
In view of no further amendments in the guidance note on tax audit report, after last revision by ICAI in 2014, the same is to be used as guidance note for tax audits pertaining to AY 2021-22 also till any changes are notified therein by the ICAI.
It may however be noted that on 20/07/2018, CBDT has further notified another set of significant changes in Form 3CD applicable from 20/08/2018 for which ICAI has released ‘Implementation Guide’ for ‘Revised Tax audit Report (Form 3CD)’. This guide is meant to supplement the ICAI’s ‘Guidance Note on Tax Audit (2014)’ and provide clause-wise analysis of amendments in reporting requirements of Form 3CD notified by CBDT, for guidance of Members/ Taxpayers. Further, that CBDT has deferred implementation of Clauses 30C (GAAR) and 44 (GST) of the revised Form 3CD upto 31/03/2022, based on representations received from stakeholders, like ICAI, etc.
ICAI has advised that the existing ‘Guidance Note of ICAI on Tax Audit under section 44AB’ of the Income-tax Act, 1961 (last revised in 2014) is required to be referred to in respect of the clause where no change/ amendment has been notified by CBDT in Form 3CD, as applicable from 20/08/2018. However this Implementation Guide of ICAI needs to be referred to for changes/ amendments in Form 3CD notified by CBDT applicable from 20/08/2018.