The audit report must be submitted in one of the following forms, depending on the taxpayer's specific circumstances:
Form 3CA and Form 3CB (for residents)
These forms are used for taxpayers carrying on a business or profession in India.
Form 3CA: This form is for taxpayers who are already mandated to get their accounts audited under any other law besides the Income-tax Act.
Example: A company that is compulsorily audited under the Companies Act, 2013, will furnish Form 3CA.
Key Particulars (Form 3CA):
Point 1: Name, address, PAN of the taxpayer; Name, Address, Membership Number of the Auditor; Law under which accounts are audited (e.g., Companies Act); Date of Audit Report; Period of Profit & Loss Account/Income & Expenditure Account; Date of Balance Sheet.
Point 2: Declaration of attaching Form 3CD.
Point 3: Audit observations/qualifications related to Form 3CD.
Point 4: Place & Date of signing audit report; Name, Address, Membership Number of the Auditor; Stamp/Seal of the Auditor.
Form 3CB: This form is for taxpayers carrying on a business or profession who are not required to get their accounts audited under any other law, except the Income-tax Act.
Example: A proprietorship entity or a partnership firm with a turnover exceeding ₹1 crore (and not opting for a presumptive income scheme) that isn't required to be audited under any other law will furnish Form 3CB.
Key Particulars (Form 3CB):
Point 1: Date of Balance Sheet; Period of Profit & Loss Account/Income & Expenditure Account; Name, address, PAN of the taxpayer.
Point 2: Address where books of accounts are kept (including branches).
Point 3(a): Audit observations/qualifications/comments/discrepancies.
Point 3(b): Auditor's declaration confirming receipt of necessary information/explanations, proper maintenance of books of accounts, and true and fair view presented by financial statements.
Point 4: Declaration of attaching Form 3CD.
Point 5: Audit observations/discrepancies related to Form 3CD.
Point 6: Place & Date of signing audit report; Name, Address, Membership Number of the Auditor; Stamp/Seal of the Auditor.
Form 3CD: The Detailed Statement
Along with either Form 3CA or Form 3CB, the tax auditor must also furnish Form 3CD. This form is an integral part of the audit report and comprises 41 detailed points covering various aspects of the business and its transactions. It provides a comprehensive breakdown of financial and other relevant particulars required by tax authorities.
Form 3CE: For Non-Residents and Foreign Companies
Form 3CE is specifically for non-residents and foreign companies receiving royalty or fees for technical services from the Indian government or an Indian concern, where such income is taxable under Section 44DA of the Income-tax Act.
Key Particulars (Form 3CE):
Point 1: Name, address, PAN of the non-resident; Financial year of the audit.
Point 2: Declaration regarding obtaining all necessary information and explanations for the audit.
Point 3: Certification regarding the existence of a permanent establishment/fixed place of profession in India.
Point 4: Declaration of income from royalty/fees for technical services under Section 44DA for the relevant assessment year.
Point 5: Signature and name of the Auditor along with stamp/seal.
Annexures: Detailed information regarding income from royalty or fees for technical services.
Due Date and Penalties
Due Date for Obtaining Audit Report
A taxpayer is required to obtain the audit report on or before 30th September of the relevant assessment year. However, these deadlines can be extended by the tax authorities under specific circumstances (e.g., due to the pandemic, the due date for AY 2021-22 was extended to 15th January 2022).
Penalty for non-filing
Failure to get accounts audited or to furnish the audit report can lead to a penalty imposed by the Assessing Officer under Section 271B of the Income-tax Act.
The minimum penalty can be 0.5% of the total sales, turnover, or gross receipts, up to a maximum of ₹1,50,000.
However, if the taxpayer can demonstrate a reasonable cause for the non-compliance, no penalty will be imposed.
