This form is needed when the taxpayer who is working as a professional or a business does not need to get the book of accounts audited by law. When an individual, partnership firm or proprietorship entity has a turnover of over Rs. 1 crore and has not opting for the presumptive taxation scheme, there is no audit of books of account needed under any law apart from the Income Tax Act. For this, they have to furnish Form 3CB. In addition to Form 3CB, the tax auditor can furnish the Form 3CD as well.
Components of Form 3CB
The chartered accountant is required to specify the following components in the forms after conducting the audit under Section 44AB:
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Personal details of the taxpayer.
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Observations and comments of the audit, including any discrepancies or consistencies.
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A declaration specifying that the statement of accounts such as Balance Sheet, Profit and Loss Account and Income and Expenditure Statement are in accordance with the books of accounts maintained at the head office of the entity.
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A declaration stating that the furnished information depicts a fair and accurate outline of the balance sheet and other aspects of the entity.
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A declaration stating that the details specified in the audited report are included in Form 3CB.
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Declarations of the chartered account stating that the balance sheet, profit and loss account or income and the expenditure account has been examined.
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Chartered Accountant’s declaration on the proper maintenance of the books of accounts.
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Annexure of Form 3CD.
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Name, address and signature of the chartered accountant.
Who Files Form 3CB and when is its Submission Due?
Form 3CB is an audit report that is furnished by a professional CA on the behalf of the tax assessee who is working as a self-employed professional or carrying out a business. The assessee undergoing audit has to obtain the report in Form 3CB on or before September 30 of the applicable assessment year. For instance, if the relevant assessment year or financial year is 2017-18, then the audit report must be obtained by them until September 30, 2020.
Key Fields in Form 3CB
Key fields in Form 3CB that must be filled out by the auditor after conducting the audit of the books of account under section 44AB are as follows:
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Personal details of the assessee.
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Observations and comments of the auditor along with the consistencies or discrepancies, if any.
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A declaration stating the Books of Accounts such as Profit and Loss Account, Balance Sheet, Income and Expenditure Statements along with the Book of Accounts maintained at the entity’s head office
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A declaration specifying that the information provided is accurate and provides a fair outline of the major financial aspects of the entity
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A declaration saying that the details mentioned in audited report are also included in Form 3CB
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Declaration(s) of the CA stating that the profit and loss account, income and expenditure account and the balance sheet have been properly examined
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Annexure of Form 3CD
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Details of the CA i.e., name, address and signature
Sections in Form 3CB
The following are the key sections present in Form 3CB and key fields in each section:
Section 1
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Date of the balance sheet
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Duration of the Income and Expenditure Account/Profit and Loss Account (beginning and end date)
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Taxpayer’s name and address along with Permanent Account Number details
Section 2
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Address details where the books of accounts are kept
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Address details of the branches, in case the books are kept in branches as well
Section 3 (a)
This section contains various observations, qualifications, comments and discrepancies observed during the audit.
Section 3 (b)
This section features the declaration provided by the auditor
Section 4
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Declaration of Form 3CD and audit report
Section 5
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Observations and discrepancies found, if any, including applicable details
Section 6
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Date and place of signing the audit report
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Auditor’s details such as name, address and membership number
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Seal or stamp of the auditor
DISCLAIMER-These materials are public information and have been prepared solely for educational purposes. These materials reflect only the personal views of the author and are not individual legal advice.
It is understood that each case is fact specific and that the appropriate solution in any case will vary. Finally, the owner will not be accountable for any loses injuries or damages from the exposures or usage of this information.
