Utility of Tax Audit Form as applicable under section 44AB for AY 2022-23 have been made available as Form 3CA-3CD and 3CB-3CD.
In the Tax Audit Forms there are nearly 44 clauses in number wherein applicable details needs to be filed.
Now from those 44 clauses there have been 2 clauses which have been kept in abeyance for past 3 years and in this post we shall talk about clause 44.
Applicability of Clause 44 of Tax audit report in 3CD for FY 2021-22 or AY 2022-23:
The amendment and insertion of clause 44 in Tax Audit report was first introduced in 3CD in 2018. The existing Form No. 3CD was amended vide Notification No. GSR 666(E) dated 20th July, 2018 with effect from 20th August, 2018. However, the reporting under clause 30C and clause 44 of the Tax Audit Report was kept in abeyance till 31st March, 2019 vide Circular No. 6/2018 dated 17-8-2018, which was subsequently extended to 31st March, 2020 vide Circular No. 9/2019. Vide circular no. 10/2020, dated 24-4-2020, it was further extended to 31st March, 2021. In view of the prevailing situation due to COVID-19 pandemic across the country, it has been decided by the Board that the reporting under clause 30C and clause 44 of the Tax Audit Report shall be kept in abeyance till 31st March, 2022 vide circular no. 05/2021.
Now if we look at the kind of notification issued to kept the clause in abeyance it can be seen that the abeyance has started in 2018 wherein it was mentioned that the clause will be kept in abeyance for all Tax audit report filed till 31.03.2019 and from then the same notification is getting amended to increase the date of applicability.
To read the circular No. 6/2018 Dt. 17.08.2018 CLICK HERE: circular6-2018.pdf (incometaxindia.gov.in)
To read latest circular No. 05/2021 Dt. 25.03.2021 CLICK HERE circular_no_5_2021.pdf (incometaxindia.gov.in)
Thus, reading the above circular it can be said that the abeyance of clause 44 announced in the above mentioned circulars is only applicable for Tax Audit report in Form 3CD filed till 31.03.2022 and since the Tax audit report for FY 2021-22 shall be filed after 31.03.2022, this clause will be applicable in all the Tax Audit report filed for AY 2022-23.
Now, let’s see what does clause 44 of the Tax Audit report deals with:
Break-up of total expenditure of entities registered or not registered under the GST (This Clause was kept in abeyance till 31st March, 2022): As the name suggest this table will ask for break up of all expenditure as per the nature into various parts whether the expenditure is incurred in relation to registered or unregistered entity.
| Total Amount of expenditure incurred during the year | Expenditure in respect of entities registered under the GST | ||||
| Relating to the goods or services exempt from GST | Relating to the entities falling under composition scheme | Relating to the other registered entities | Total Payment to Registered entities | Expenditure relating to entities not registered under GST | |
Thus, considering the above provision it can be said that this clause will be applicable from AY 2022-23, however professionals are finding it difficult to implement and collate this data in Tax Audit report as the list would be long and it is not possible to list this details for each nature of expense.
However, till we don’t get any further extension notification from CBDT, this clause is applicable and people filing Tax Audit report have to fill this clause.
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