Disclosure of details pertaining to demand raised or refund issued under any tax laws other than Income Tax Act, 1961 & Wealth Tax Act, 1957 along with details of relevant proceedings. What is the scope of reporting, how to ensure completeness and implication:

This clause has been inserted from Assessment Year: 2014-15

Following taxes are covered under this clause :

1. Central Excise Duty

2. Service Tax

3. Customs Duty

4. Value Added Tax

5. Central Sales Tax

6. Professional Tax

The above list is just illustrative in nature.

Disclosure which are to be reported under this clause:

a) Demand/Refund order issued during the previous year.

It may be noted that demand/refund which may pertain to a period other than the relevant previous year also to be included.

b) Any adjustment of the refund against demand raised, such instances are also to be reported under this clause.

Tax Auditor’s responsibility:

a) The Tax Auditor should obtain a copy from the client of all the demand/ refund orders issued by the Governmental authorities during the previous year.

b) Following Information along with their supporting documents should be kept in the working file in the following format so as to discharge his duty properly : 

Sr. No.	Financial Year to Which Demand / Refund relates	Name of Other Tax Law	Type (Demand Raised/ Refund Received)	Date of Demand Raised/ Refund Issued	Amount (Rs.)	Remarks
1	2	3	4	5	6	7

 

c) Tax Auditor should also obtain the written representation from the assessee stating that he has relied upon the representation of the assessee as regards demands raised and refunds issued during the previous year, under various tax laws other than Income-tax Act,1961 and Wealth-tax Act, 1957, so as to avoid any litigation in the future.

d) Tax Auditor should also refer to the Statutory Auditors’ Report under CARO and disclosure in the accounts under the head “Contingent Liabilities” so as to ensure that there is proper disclosure and consistency in the reporting.

e) Special attention also should be given to incase refund is issued as the same is to be checked for its taxability u/s 41(1) and also it is to be reported under clause 25.

Following is the Illustrative annexure to be reported under Clause 41:

Sr.No	Financial Year to Which Demand / Refund relates to	Name of Other Tax Law	Type (Demand Raised/ Refund Received)	Date of Demand Raised/ Refund Issued	Amount (Rs.)	Remarks
1	2010-11	Service tax	Demand raised	05.06.2015	6,09,000/-	This demand is contested.
2	2008-09	MVAT	Refund issued	21.12.2015	1,00,000/-	-
3	2007-08	Profession Tax Act	Demand raised	19.09.2015	76,000/-	-