Tax Audit

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Shalaka Solase (Querist)
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12 November 2010 Sir,

I have come across a client whose turnover is above 40 lakhs. This is his first tax audit. He is unaware of legal matters. Now it is one month delay from the last date of filing the returns. What should I do? Should I accept the audit? Is there any other legal way by which I can save my client from legal prosecutions?

Pls suggest.

Thank you

Tilak Agrawal

Tilak Agrawal (Expert)
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12 November 2010 Dear Shalaka

As it is accepted saying that unawareness of law is not an excuse

In my opinion your client have to face the consequences

Wait for other opinions also

haridhayalan

haridhayalan (Expert)
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12 November 2010 42 days delay. he cannot escape from penalities. but if he finishes the audit the accounts and filing return as soonest he can avoid maximum penality.

for your information,
U/s 271B-failure to get accounts audited under section 44AB is half percent of the total sales/turn over/gross receipts. Maximum is Rs.100000/-.

U/s 271F-failure to furnish return of income under proviso to section 139 on or before due date-Rs.5000.

so finish your audit and file the return and approach the assessment commissioner of income tax before issue show cause notice.

this is my knowledge only.

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MAHENDRA KUMAR BAGRECHA

MAHENDRA KUMAR BAGRECHA (Expert)
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13 November 2010 Hi,

filing return of tax audit late should not attract penalty u/s 271B. If your client has got audit report u/s 44AB within prescribed due date then penalty u/s 271B should not attract.

CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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13 November 2010 Shalaka,

IF you are confident of handling the case, accept the assignment do audit work etc.,

The Audit report shall be dated prior to 15.10.2010 & file the return of income now.
If the AO levys the penalty U/s 271F (Rs.5000/-) only as per law, accept it.

AO cannot levy penalty U/s 271B for failure to get the accounts audited U/s 44AB.As the audit is completed before the due date, Only the return the of Inocme is belated for which we are paying penalty U/s271F

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shrikant

shrikant (Expert)
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14 November 2010 Dear Shalaka

If your client already filed return without tax audit details, then revise it & give the tax audit details in it,

If he had not filed return then he have to face the penalty, but make sure that the penalty is not compulsory it discretionary & depend upon how you convince the AO.