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tax audit

CA. Bhabani , FCA, DISA, DIRM (Chartered Accountant) (205 Points)

08 November 2007

Where an assessee could not get his accounts audited u/s 44 AB within the due date and consequently failed to file his return what option is available to him? can he file a belated return?Further if the accounts are audited within the due date but no return is filed can penalty u/s 271B be imposed?

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5 Replies

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 08 November 2007

YOUR querry is for which asst year

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Relating to Asst Year 2007-08

Amarjeet Singh (Chartered Accountant) (152 Points)
Replied 09 November 2007

For the A.Y 2007-08 date of filking of return as well as tax audit report has been extended to 15.11.2007.In the E filiong scheme u are only require to file ITR But u should have tax audit report with u on or before 15.11.07.And require to file the same whenever AO will require it.Moreover Section of Filing of ITR & Filing of Tax Audit Rep[ort are independent of each other.U may file belated return even u have not submitted the tax audit reort U/S 139(5).And no penalty U/s 271B can be lavied if u file the hard copy of tax audit report on nor before 15.11.2007 without filling of ITR.As per CIRCULAR NO. 5 / 2007, DATED 26-7-2007 The report of audit under section 44AB is not to be attached with the return. It should not be furnished separately also before or after the due date. However, an assessee should get the report of audit from an accountant under said section before the due date of the furnishing of the return and should fill out the relevant columns of these forms on the basis of such report. The assessee should retain the report with himself. It may be furnished in original during the assessment proceedings. No penalty under section 271B shall be initiated or levied for not furnishing the tax audit report on or before the due date. However, if the audit report has not been obtained before the due date, provisions of section 271B shall be attracted.

SURESH KABRA (chartered accountants) (121 Points)
Replied 12 November 2007

dear, as per your query it is not clear that the status of the assessee is individual or partnership firm or company, however reply given by sh. amarjeet singh ji is related to company & partnership firms only. IN CASE OF INDIVIDUAL ASSESSEE THE DATE EXTENDED UP TO 02.11.2007 ONLY. SO PLEASE CLEARYFY THE STATUS BEFORE OBTAINING THE AUDIT REPORT.

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 15 November 2007

I am agrreing with CA. Amarjeet Singh. I can not understand, if tax audit report is not to be deposited, then what is the use of extending the date of filing of audit report (Pl. see orders of the CBDT dated 31/10/2007).
But some problem may arises in future. Rule 12 as amended is relating to filing of return only, it is nothing to do with Section 44AB or Section 271B. Though, section 139C empowers CBDT to make rules providing for non filing of audit reports, but the board has not made any rule as such (as far as I know). However boards intention is very much clear in circular no.5 as refered by you. Question may raise in future, whether by issuing of such circular, whether CBDT can interfare in the discrationery power given to the Commissioner u/s. 273A? Whether such circular wil be bindinmg on the deartment?
But, despite of all the questions, as the assessee has reasons to believe bonafidely, that he is not supposed to file audit report, department will ultimately not succeed in levying the penalty.