Clause 25 of Form 3CD seeks reporting of any amount of profit chargeable to tax under section 41 and computation thereof.
New Para 45(1)(iv)(b) in GN 2023 draws the attention of tax auditors to the Supreme Court’s ruling in CIT v. Sugauli Sugar Works (P.) Ltd. [1999] 102 Taxman 713 (SC), wherein it was held that expiry of the limitation period does not extinguish a debt. The only remedy is it bars the creditors from taking recourse to a legal remedy for enforcement of the debt. Hence, barring by limitation would not be tantamount to cessation of liability under section 41(1).
New Para 45.9 in GN 2023 requires that if any amount reported against section 41 is not routed through a profit and loss account or income and expenditure account, the tax auditor may include the said fact in the observation para [Para 3 of Form No.3CA/Para 5 of Form No. 3CB] of the audit report.