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SIGNING OF ATTACHMENTS TO BE UPLOADED ALONGWITH TAX AUDIT REPORTS IN ELECTRONIC FORM 3CA AND FORM 3CD  | 30-07-2013 | CA Ashutosh Lohani |

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As we all are aware that for Assessment Year 2013-14 and onwards various audit reports under section 10(23C), section 10, section 10A, section 12A, section 44AB, section 80-IA, section 80-IB, section 80-IC, section 80-ID, section 80JJA, section 80LA, section 92E or section 115JB of Income Tax Act, 1961 are required to be filed electronically.

However, Income tax Department is still busy with developing a correct version of an offline audit reports filing-utility, called CA Utility. Till now many versions have been launched withdrawing each time the previous ones. As of now PR-7 is the latest available version.

What are the attachments required to be submitted?
The following attachments are required for each of the form:
(a)   As per Form 3CA, 3CB
       Audited Profit and Loss Account
       Audit Balance sheet 
All annexures which required under Income Tax Act, 1961 to form part of the audited profit and loss account and balance      sheet .  (Notes to the Account will come under this purview).
(b)   As per Form 3CD
      
Report of Cost Auditor (Clause 30)
      
Audit Report under Central Excise Act, 1944 (Clause 31)  

Instructions given for attachments:
There seems to be some ambiguity in specifying the format and size limit of attachments.  A s per the CA Utility download page the attachment requirements suggests the following:
1.    Attachment can not exceed 50 MB
2.    Attachment must be in pdf or zip format
3.    Attachment should be scanned with minimum 300 dpi
4.    Wherever there is a requirement in the form to submit a signed copy of document by an assessee/CA as an attachment,
       upload the scanned copy of the same document.

Whereas, the attachment panel that appear at the Uploading window requires:
1.    20 MB limit for attachment
2.    Attachment to be in pdf format or ttf image file

Now, the point of ambiguity is with respect of:
(a)   Size of the attachment:
       Let’s keep it up to 20MB being the lower of the two
(b)   Format of attachment:
      
This is again cause of confusion and contradiction
       Should attachment be in:
      
(i)    Pdf  (ii)   Ttf, or   (iii)  Zip (meaning any file format including MS Word , MS Excel, PDF or TTF which is zipped)
      
Further which utility should be used to zip has also not been specified.
(c)   Scanned Copies:
       Should scanned copies of physically signed documents must be attached with minimum 300dpi.

What is the right format for a valid attachment?
Till the time a clarification is made by the Income Tax Department  , the following formats could qualify to be used for attachments: 

Let us remember that as per Information Technology Act, 2000, any document which has been digitally signed has the same legal validity as physically signed document, provided it has been signed via a Digital Signature Certificate issued by a licensed Certifying Authority. The very preamble of the Act together with section together with its sections makes it very clear.

1. Attachment in MS Word or MS Excel formats signed digitally and zipped
Microsoft Word 2007 and Microsoft Excel 2007 both do have abilities to add digital signatures to it. However the zip format as   prescribed in instructions should be interpreted as referring to compressed pdf or ttf files. Therefore digitally signed MS Word or MS Excel files are not suggested for uploading attachment. How to add signature to MS Word MS Excel >>

2. Attachment in PDF formats signed digitally.
In view of the provisions of Information Technology Act as described above and acceptability of pdf format as per instructions give, a pdf file that is digitally signed should qualify for a valid attachment.

Note that one should not attempt to convert digitally signed MS Word 2007 or MS Excel 2007 into pdf formats. The converted pdf documents shall not be considered as digitally signed as in case of the original documents.

Instead, Adobe Acrobat software should be used to edit any converted pdf files to add signature to it. It should be noted that that the documents should contain the digital signature of both, the assessee and the auditor.

Adobe Acrobat Standard XI software which is priced at Rs. 20638/- can be used to add digital signatures to any pdf file. The price it very much justified in view of the ease and divided cost per report would be just Rs. 458.22 (for 45 Tax audit reports). 

Learn how to add digital signature to pdf files. See the Tutorial Video as under:


3. Attachment of scanned documents not signed digitally
This is another but cumbersome method that can be used to scan the images of the physically sign documents with minimum 300    dpi and:
(a)   Convert into pdf, or

(b) Save them into ttf format

The attachments can be zipped or simply uploaded. To many, this is the only valid way for uploading the attachments which is incorrect.

 

4. Attachment of unsigned PDF documents with Sd/- marking
We have an example of MCA allowing Sd/ written unsigned copies of the documents including financial statements. The ground and rationale behind is that each MCA form is required to be digitally signed both by the company and counter certified by a pofessional.

However for Form 3CA or 3CD, since the counter digital signature of the assessee authenticating the attachments is not required, at the point of uploading, this method could not get acceptance subject to approval by Income Tax Department.

Conclusion !!

Therefore pending any clarification by Income tax Department, I would suggest the second and third methods out of four listed above for uploading attachments to Form 3CA or Form 3CD.  

A request for clarification has already been filed with Dirctor I. Tax (Systems) under RTI Act.   Application filed under RTI and replies received so far Click to read RTI >>   

ICAI FAQ on e-filing of Tax Audit Report

ICAI has come up with a  FAQ on efiling of Tax Audit Report  .It is a welcome step. However as per FAQ it has been stated that it has been  developed  by Direct Taxes Committee of ICAI in consultation with the Officials of Directorate of Income-Tax (Systems). Para 3 of the FAQ states that Balance Sheet, Profit and Loss Account in Word, Excel Format, etc signed as "sd/-" can be converted in to pdf file and uploaded on the portal.

It is notable that Directorate of Income-Tax (Systems) replying under RTI has expressed as having no information with resepect to many questions on e-filing of Tax Audit report.

Further, the FAQ hosted by ICAI is not appearing at Income Tax Website. Under these circumstances who would take the responsibility if an Income tax official later on issues notice of penalty treating such sd/ wriiten financial statements as non furnishing of audit report as required under section 44AB?

Therefore, I would still stick to my earlier conclusion and advise the same until the said FAQ is adopted and hosted by Income Tax also.

3CA 3CB 3CD Attachment Format
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