Furnish audit report under section 44AB:
An asssessee is liable to get his tax audit done by a Chartered Accountant mandatorily, if in the P.Y.-
- the person is carrying on a business and his total sales/turnover exceeds Rs. 1 cr.
- the person is carrying on profession and his gross receipts exceed Rs. 25 Lakh
- the person is carrying on business or profession and is covered under provisions of Sections 44AD, 44AE, 44AF, 44BB, 44BBB and claims that his income from the said business is lower than the deemed profits and gains computed under the relevant section.
Penalty for non-compliance of S. 44AB:
Non-compliance of the provisions of this section shall attract penalty u/s 271B of the Income Tax Act. However, S. 273B states that no penalty shall be levied u/s 271B if there is reasonable cause for such failure.
Section 44AB, of the Income Tax Act, 1961-
Audit of accounts of certain persons carrying on business or profession u/s 44AB
(a) Carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year ; or
(b) Carrying on profession shall, if his gross receipts in profession exceed twenty-five lakh rupees in any previous year; or
(c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person u/s 44AE [or section 44BB or section 44BBB], as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or
(d) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person u/s 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,
Get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
Provided that this section shall not apply to the person, who derives income of the nature referred to in section 44B or [section 44BBA], on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later
Provided further that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this section.
For the purposes of this section,—
(i) “Accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;
(ii) “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the due date for furnishing the return of income under sub-section (1) of section 139.