To Audit or not to Audit is the question (Income Tax)

This query is : Resolved

S. Chowgule

( Author )
09 October 2010

My friend's firm has made sales of Rs. 45 lacs in the FY 09-10. After sales rejection his turnover is 38 Lacs. Would he be coming under Audit or should he be assessed normally. Thinking he comes under audit, missed the July deadline for filing returns and he intends to do it before the 15th of Oct. Will his firm attract penalty.

B.Chackrapani Warrier

( Expert )
10 October 2010

Guidance note on tax audit of ICAI says,"The turnover would mean total sales after deducting therefrom goods returned,price adjustments,trade discounts and cancellation of bills for the period of audit,if any". In view of the above the assessee is not covered under tax audit meaning thereby that the cut off date was 31st july and being missed leading to 234 interest if there is tax liability.

venkatraman shrinivas

( Expert )
10 October 2010

Mr.Warrier is absolutely right. This case is not covered by tax audit and the deadline for filing the return was 31st July. The return can be still filed under section 139(4), of-course with interst under section 234A

S. Chowgule

( Author )
10 October 2010

Thank you Chakrapani Sir & Srinivas Sir for your absolute & complete guidance.

Regards,