Tax Publishers Handling Tax Audit by CA. Satyadev Purohit & CS. Pradeep Vyas Edition 2026

Handling Tax Audit by CA. Satyadev Purohit & CS. Pradeep Vyas Edition 2026

Handling Tax Audit by CA. Satyadev Purohit & CS. Pradeep Vyas Edition 2026

Description

Audit under section 44AB of the Income Tax Act, 1961, commonly known as Tax Audit, is one of the most sought assignments so far as income tax practice is concerned. In case of assessees not liable to audit under any other law, it is fusion of financial as well as tax audit. So in those cases the tax audit does not remain only examination of books of accounts to find out particulars to be reported in Form No. 3CD, it also involves the financial audit of the accounts of the assessee and expression of true and fair view thereon. Many professionals remain under misconception that in case of tax audits their liability is limited to reporting under Form No. 3CD. But, legally speaking it is not so. While in cases where the accounts are audited under any other law the auditor needs to report about particulars in Form No. 3CD and also has to attach the audit report issued under that other law. But in cases where the audit is not done under any other law then the auditor has to audit the financial statements and issue report in Form No. 3CB alongwith statement of particulars in Form No. 3CD.

So in most of the cases, where tax audit is to be done, the auditor is not only required to fill statement of particulars in Form No. 3CD but also has to opine about the true and fair view of the financial statements. Though, Tax Audit under section 44AB of the Income Tax Act, 1961 is a privilege conferred upon Chartered Accountants, yet, it casts a greater degree of responsibility on them. This is so because on one side under the Income Tax Act, only a Chartered Accountant is entitled to perform the function of Tax Audit but on the other hand he is responsible for true and fair view of the financial statements including the certification of particulars specified in Form No. 3CD. Responsibility regarding the matters relating to signing of Form No. 3CD becomes all the more important because in that case they have to certify that particulars stated therein are true and correct.

Coming to reporting of specified particulars in Form No. 3CD, it needs to be stated that scope of reporting under some of them is factual only, under some of them legal only and while in others it involves both factual as well as legal. Wherever the inquiry is legal in nature then to report about the same, the Chartered Accountant is required to sit in the chair of the assessing officer and decide the allowability or otherwise of the various deductions/allowances claimed in the profit and loss account. The Chartered Accountant is required not only to make a thorough checking of the books of account as well as of the supporting documents and vouchers, but has also to identify the incidents of non-compliances of the related statutory provisions, if any and also to carefully report them in the prescribed Form No. 3CD.

So in nutshell the tax audit is not a cakewalk rather it is an onerous responsibility on the shoulders of Chartered Accountants and they need to ensure that they rise to the occasion to accept the challenge and discharge their duty to the satisfaction of the Stakeholders.

To assist the Chartered Accountants in discharging this onerous task, we have decided to bring out this publication titled Handling Tax Audit. Contents have devised in a manner that all practical aspects of Tax Audit are presented in a single manageable treatise to the readers.

This book caters to each and every requirement of Tax Auditor. To begin with, Accounting and Auditing aspects have been discussed so as to provide the auditor with an overview of the regulatory environment in which he has to operate. Accounting standard applicable as on first day of accounting year is to be followed in the preparation and presentation of financial statements, therefore, the status and applicability as of 1-4-2025 has been given. Similarly, Auditing Standards have been identified and listed which are applicable as of now and also the Auditing Standards which may find their applicability in the context of tax audits have been discussed. Readers are well aware of the current regulatory environment in which we are operating and the need for compliance with these Accounting and Auditing standards cannot be over-emphasized.

We anticipate that this handy information will be welcomed by one and all. The new code of ethics has also been implemented and relevant aspects have been included in the book and a separate chapter titled Code of Ethics and Tax Audit has been devoted to this effect.

Aspects relevant to tax audits are taken care of in greater detail in the Part IVAspects Basic to Tax Audit.

Inclusion of exhaustive check lists to various clauses of Form No. 3CD enable the busy auditor to ensure that all relevant informations are gathered and analysed before putting his hands on signing of the Audit report. This will prove to be a good tool while discharging the function of reporting in Form No. 3CD.

Icing on the cake is that common errors in reporting by auditors have been identified and discussed upon at one place. This will help auditors in ensuring error free reporting.

Responsibilities of auditor under each clause have been incorporated in headings like Reporting Requirements, What the Auditor Shall Do and Auditor to Check.

The avowed objective of this book is not only to acquaint readers about the provisions relating to Tax Audit, but also to provide them with the best of advice and guidance for carrying out the Audit. Thus it is more a practice guide authored with keeping all practical aspects of Tax Audit in mind and this book will prove to be a handy tool in carrying out Tax Audits, it is believed. It, accordingly, comprises a host of Check Lists, Case law, Circulars, Safeguards, Reporting requirements, What is expected from auditors, Auditor to take care, etc.

Needless to say that the text of this book stands fully updated with the law as in the wake of the Finance Act, 2026.

The contents of the book have been enriched with the knowledge gained by the Author while attending various Seminars/Webinars on the topic of Tax Audit and other income tax related issues and also from the queries received on Whatsapp on a daily basis. The experience so gained has been incorporated in the contents so as to make them more practice oriented.