Due date of filing Incometax return for
assessees who are liable to get theirbooksof accounts audited is 30th September. Since
the due date is nearing, lets get some points refreshed on section 44AB.
Who has to get his accounts
Person carrying on business is required to get
his books of account compulsorily audited
u/s 44AB If the total sales, turnover or gross receipt in
business for the previous year relevant to assessment year
exceed or exceeds Rs. 60 Lakh for the Assessment year 2011-12 and 2012-13 (Rs.
1 Crore from the assessment year 2013-14).
2. A person carrying on profession is required to get his books of account
compulsorily audited u/s 44AB, if his gross receipts in profession for the
previous year relevant to the assessment year exceeds 15 lakh for the
assessment year 2011-12 and 2012-13 (Rs. 25 lakh from the assessment year
3. A person covered u/s 44AE, 44BB
or 44BBB is required to get his
books of account compulsorily audited u/s 44AB if such person claims that the
profits and gains from the business are lower than the profits and gains
computed under these sections(irrespective of the turnover)
4. A person covered u/s 44AD is required to get his books of account
compulsorily audited u/s 44AB if such person claims that the profits and gains
from the business are lower than the profits and gains computed in accordance
with the provisions of section 44AD(1) and if his income
exceeds the maximum amount which is not changeable to tax(i.e basic exemption
Forms and due date: Forms No. 3CA, Form No. 3CD in case
of person who carries on business or profession and who is required by or
under any law to get his accounts audited and Form No. 3CB and 3CD, in case of
a person who carries on business or profession but not being a person referred
Duedatefor getting the books audit and
filing of return in both the above cases is the due date of furnishing return
u/s 139(1) i.e 30th September of the relevant assessment year.
Audit under any other law: In case where the accounts are required
to be audited by or under any other law(as in the case of companies
and cooperative societies), it is sufficient if accounts are audited
under such other law before September 30 of the assessment year and the
assessee obtains before the said date, audit report as required under such law
and also a report of audit from a chartered accountant in theaudit formsunder Income Tax Act i.e Forms No. 3CA, Form No. 3CD
No penalty u/s 271B if audit
report obtained within due date but return filed after due date: After the introduction of new annexure
less return forms, the audit report u/s 44AB is not required 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 audit
report before the due date of the furnishing of the return and should fill the
relevant columns of return forms on the basis of such report. the assessee
should retain the report with himself. It may be furnished at the time of
assessment proceedings. No penalty shall be attracted for not furnishing the
audit report on or before due date. However, if audit report is not obtained
before due date, penalty u/s 271B shall be attracted.
Quantum of Penalty for failure
to get accounts audited within due date: If any person fails to get his accounts audited as required
under the provisions of section 44AB before the due date u/s 139(1), the AO may
impose penalty which may be a sum equal to one-half percent of the total sales,
turnover or gross receipts subject to a maximum of Rs. 1.5 Lakh.
Section 44AB applicable to only
business Income: Section
44AB provisions are applicable only in the case of business/profession income.
It is not applicable in respect of other incomes-Thai Constructions v. State of Maharashtra
184 Taxman 52 (Bom.).
Turnover in case of
broker: Transactions by a share broker of sale or purchase of shares on behalf
of parties cannot amount to ‘sale turnover or receipt’ ofshare brokerhimself within the meaning of
section 44AB-CIT v Hasmukh M. Shah 85 ITD 99 (Ahd.)
Work-in progress: Value of work in progress in case of the
assessee engaged in construction of shop/flats would not constitute ‘turnover’
within the meaning of section 44AB-CIT v B.K Jhala & Associates  69
ITD 141 (Pune).