08 October 2014
For a Pvt. Ltd. company with following turn over a) FY 11-12 4 lakhs b) FY 12-13 0 (Zero) c) FY 13-14 20 lakhs
Audit under tax is not required, while audit under company's law is required/
What is the practical difference? In company's law, if the lawer is any way checking all details, like bills etc. what is the point of not submitting audit under income tax act?
08 October 2014
No there is no harm. You can get Tax Audit done but Tax Audit becomes mandatory only when the Turnover limit as specified in section 44AB is crossed.
08 October 2014
Thx for the answer. But if Tax audit is not necessary, Company's act cannot contradict tax law and implement same thing. This is violation of basic principle. So there must be some thing that need not be done.
If all activities of tax audit becomes mandatory through another law, this is a joke.
08 October 2014
company act can and very much contradict tax laws without doing anything illegal. Statutory auditor is required to ensure compliance with company act and within the provisions of the act and the rules. Income-tax act merely deals with the taxation part and scope under tax audit is different from that of company audit.
08 October 2014
for an example, if the company has incurred a loss, and the statutory auditor signs the financial statement on 30 June. All he is required to ensure that the income and expenses are properly recorded.
However, if the return is not filed within due date under 139(1), the loss carry forward shall not be allowed in tax computation. This is something that the tax auditor needs to check and not the statutory auditor.
08 October 2014
I understand that. But for a small company, I think the company's act should be more simple and do away with audit and allow self assessment in the line of thought of tax audit.
Yes, one may contradict,but contradiction goes against any principle.
Thx, now that I understand that the contradiction exist, I can take up the matter with Government of India and MCA and request change of law.
CAclubindia
