Limit on audits u/s 44ab conducted by a chartered accountant

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Sushant Mahajan (Querist)
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07 May 2013 Since, ICAI had imposed a restriction on the number of audits conucted by a Chartered Accountant under section 44AB, by imposing a ceiling of 45 on it.

My query is whether those assessees whose turnover do not exceed the limit speciefied , ex, for the current year limit of Rs. 1 crore for compulsory audit of accounts under section 44AB,

then will the audit of such assessees conducted by a chertered accountant be counted while calculating the limit of 45 imposed by ICAI?

Anil Sankar V

Anil Sankar V (Expert)
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07 May 2013 If it is not tax audit, application of limit will not be applicable.

Sushant Mahajan

Sushant Mahajan (Querist)
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08 May 2013 Thank you.

Are you 100% sure that those assessees whose turnover does not exceed 1 crore, get their books audited so that they do not have to show 8 % profit on turnover,

then the audit conducted by a chartered accountant, does not fall in calculating the limit.

Also, if possible, please tell me some proviso in rules set by ICAI that can prove this.

Its very urgent.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 Under Section 44AB of the Income Tax Act, the requirement to get accounts audited applies to various categories of assessees based on their turnover and type of business. The limit set by the Institute of Chartered Accountants of India (ICAI) for the number of audits that a Chartered Accountant (CA) can conduct is indeed 45.

Here's how this limit is generally interpreted and applied:

### **1. Applicability of ICAI Limit on Audits**

1. **ICAI's Ceiling of 45 Audits:**
- ICAI has set a ceiling of 45 audits per Chartered Accountant. This includes audits under Section 44AB (tax audits), as well as other types of audits such as company audits and audits of other types of entities.

2. **Turnover Limits and ICAI Limit:**
- **Compulsory Audit (Turnover Exceeding Limit):** For assessees whose turnover exceeds the prescribed limit (e.g., Rs. 1 crore for businesses), a tax audit under Section 44AB is compulsory. These audits do count towards the ICAI limit of 45.
- **Voluntary Audit (Turnover Below Limit):** If a business or individual whose turnover is below the limit specified under Section 44AB opts for a tax audit voluntarily, such audits also count towards the ICAI limit of 45.

### **2. ICAI Guidelines and Provisions**

1. **ICAI Guidelines:**
- According to the ICAI guidelines, all types of audits conducted by a CA are counted towards the limit of 45. This includes both compulsory and voluntary audits.

2. **Regulations and Rules:**
- The ICAI regulations and guidelines do not differentiate between compulsory audits (i.e., those conducted under Section 44AB due to exceeding turnover limits) and voluntary audits when counting towards the 45-audit limit.

### **3. Key Points to Note:**

1. **Voluntary Audits:**
- If an assessee with a turnover below the specified limit opts for an audit to avoid presumptive taxation or for any other reason, this audit will still be counted towards the CA’s audit limit of 45 as per ICAI rules.

2. **Compliance and Monitoring:**
- Chartered Accountants should ensure compliance with the ICAI guidelines on audit limits. Exceeding the limit could result in disciplinary action or penalties from the ICAI.

3. **ICAI Regulations:**
- For precise details, you can refer to the latest ICAI guidelines or circulars regarding the number of audits and their limits. The ICAI’s official website or professional circulars are good sources for this information.

### **Conclusion:**

To summarize, both compulsory audits (for assessees exceeding the turnover limit) and voluntary audits (for those opting for audits despite having a turnover below the limit) count towards the ICAI-imposed limit of 45 audits for Chartered Accountants. The ICAI does not make exceptions based on whether the audit is compulsory or voluntary.

For the most up-to-date and specific information, checking the latest ICAI notifications or consulting directly with ICAI resources would be advisable.