Clause 44 of Form 3CD

Clause 44 of Form 3CD

The Incomes Act established two types of tax audit forms:



Report on Audit:



The audit report would be in either Form 3CA or Form 3CB format. Form 3CA is for people whose accounts have been audited under laws other than the Income Tax Act. Form 3CB is intended for individuals whose accounts have not been audited under any other law. As a result, we can say that this is for people who are being audited under the Income Tax Act.


Particulars Statement:



The particulars statement would be in accordance with Form 3CD, and it is also the focus of our article. This Form contains 44 clauses in which the auditor must report on the various matters contained therein.


These clauses are divided into two parts: Part A covers the basic factual information about the assessee, and Part B contains the specifics of various income tax compliances that must be provided.

Part A contains the basic factual information about the assessee, and Part B contains the specifics of various income tax compliances that must be provided.

Key notes



(a)    As informed by the assessee, the information reported in clause 44 of form 3CD is based ondata extracted from accounting software (GST report)


(b)  However, this may not be 100% accurate because the assessee’s accounting software is notconfigured to generate the report required under clause 44 in the absence of prevailing statutory requirements under the Income Tax Act, 1961, GST, 2017 or any other law + software (system) is not capturing information against entity as falling under composition scheme (supply) with ineligible credit.


(ii) (a) We have verified the statement as prepared by the assessee in accordance with Auditing Standards generally accepted in India + test checked based on materiality and reasonable assurance concepts.


(b)  However, based on the accounting entries passed through accounting software, it is notpossible to extract the desired details to be reported under clause 44 of 3CD.


(c)  As a result, we are unable to comment on the accuracy of the information provided by theassessee.

(iii)  The assessee has informed that “Expenditure relating to entities not registered under GST”includes imports of goods, imports of services, and services from unregistered suppliers where GST liability has been discharged under RCM.


(iv) The assessee has informed that the difference between Clause 2 (Total expenditure) andthe sum of Clauses 6 and 7 due to depreciation, bad debt, and expenditure, such as salary, is not supply in accordance with GST, 2017, and that total expenditure as per column 2 includes capital expenditure.


(v)   The details as communicated by the assessee in accordance with CGST Rule 56 Ifrequested, rules must be provided during assessment proceedings before the AO.




It is the taxpayer’s responsibility to have their accounts audited. A Chartered Accountant is required to cross-examine the taxpayer’s books of accounts and report the findings in the tax audit report.


To avoid any proceedings, it is critical to submit details with accuracy.