From time to time ICAI has issued the updated version of Guidance Note on Tax Audit u/s 44AB after incorporating the changes/ amendments in provisions relating to tax audit and reporting requirements for the relevant assessment year, for information and support of the Members.
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, 2014 and 2022. 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. 25/07/2014.
The ICAI’s Revised Guidance Note on Tax Audit (2022) is the latest edition on the subject and is applicable from AY 2022-23 and onwards. This Guidance Note provides requisite guidelines and clarity on various issues to members for conducting tax audit u/s 44AB of the Income Tax Act, 1961 and making of the tax audit report in due course. This Guidance Note was last revised in 2014. Thereafter, in 2018, ICAI had issued ‘Implementation Guide w.r.t. Notification No. 33/2018 dated 20/07/2018 effective from 20/08/2018’ and this current version of Guidance Note incorporates all substantial changes in provisions of income tax aw and clauses included in the particulars to be furnished in the Form No. 3CD since the last publication.
The ICAI’s Guidance Note on Tax Audit Report comprehensively covers items of Form 3CD in specific for reporting u/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 u/s 12A(b), Report u/s 92E of the Act, Report u/s 115JB of the Act and Report u/s 115JC of the Income Tax Act.
This new publication of the ICAI, i.e. ‘Revised 2022 Edition of Guidance Note on Tax Audit‘, is meant to facilitate compilation of data as per reporting requirements, smooth conduct of tax audit and issuance of the report in due course, for the Assessment Year 2022-23 and onwards, as under:
Further, it is mentioned in the this Guidance note that DTC of ICAI has decided to issue revised and updated version of the Tax Audit Guidance Note at annual intervals, to specifically offer guidance for each
Tax Audit u/s 44AB of the Income Tax Act, 1961 is mandatory for certain specified assessees based on their gross turnover/ receipts from business/ profession during any financial year. ICAI’s publication ‘Guidance Note on Tax Audit (2022 Edition) u/s 44AB‘ includes detailed commentary (i.e. nature, import, requirements, verifications, disclosures, etc.) on all relevant IT Sections/ Rules governing each and every clause in Form 3CD.
Implementation of 3CD Clauses: 30C (GAAR) and 44 (GST)
It may be noted that the 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.