Tax audit report can be revised !

All about revision of tax audit report

Revised tax audit report. Revision of tax audit report

Every stakeholder is aware of applicability of tax audit and provisions of Section 44AB. Now we will discuss in the form of FAQs about revision of tax audit and related provisions of Income tax act, ICAI, UDIN etc. Kindly note this FAQs are prepared based on practical experience by members, discussion with seniors and discussion in the webinars. 

1. First and most important question is , can Tax Audit Report be revised? 

Answer is YES!. You can revise tax audit report.

2. How many times tax audit can be revised?

Straightforward answer to the question is there is no limit prescribed for revision ! However, do not take it liberally and wisely use opportunity. Don't file TAR in hurry thinking it can be revised later on!

3. Is there any reference in the Guidance Note on Tax Audit by ICAI w.r.t. revision of tax audit report?

There is no direct reference in "Yes" or "No" format given w.r.t. revision of tax audit report in the guidance note by ICAI. However Para 13.11 talks about revision of books and consequent reporting.  In case of revision, the audit report should be given in the manner as required by the Institute in SA-560 (Revised), Subsequent Events. 

As per Para No. of Guidance Note on Tax Audit:

13.11: It may be pointed out that report under section 44AB should not normally be revised.  However, sometimes a member may be required to revise his tax audit report on certain grounds (not an exclusive list).

13.12 In case where a member is called upon to report on the revised accounts, then he must mention in the revised report that the said report is a revised report and a reference should be made to the earlier report also. In the revised report, reasons for revising the report should also be mentioned

4.  What are the provisions related to revised tax audit report in the Income tax act?

CBDT has vide Notification No. 28/2021-Income Tax dated 1st April, 2021 notified that tax audit report can be revised to recalculate disallowances u/s 40 & 43B.

Notification No 28/2021 inserted sub rule 3 in the Income Tax rules:

(a) in rule 6G, after sub-rule (2), the following sub-rule shall be inserted, namely:-

"(3) 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."

5. Whether income tax portal allows filing revised tax audit report?

Yes. Income tax portal also permits filing of revised tax audit report. i.e. there is no technical issue w.r.t. filling revised tax audit report. It accepts tax audit report for same pan & same assessment year.

6. Is there any time limit provided for revision of tax audit in the Income tax act?

Notification No. 28/2021 says that for certain reason notified in this notification , before the end of the relevant assessment year for which the report pertains. However, for any reason as given in ICAI guidance notes no time limit mentioned for revision. 

7. Is UDIN required for revised tax audit report?

It is mandatory to obtain UDIN for all Certificates/reports issued by the members in practice. In case of revised tax audit report member should obtain fresh UDIN.

8. What all other precautions should be taken while furnishing revised tax audit report?

a) If tax audit report need to revise don't panic at all, first consult with senior members for inputs. It really helps!

b) At the time of submitting revised TAR if possible attach detailed note of reason to revise TAR. 

c) Member must mention "Revised Report" on each copy of revised report and reference should be given to the original TAR.

d) Submit revised copy of TAR to every stakeholders whom earlier original report was submitted. E.g. Bank etc.

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