Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Tax audit

manoj (student) (93 Points)

12 August 2011

Plz tell whether Tax Audit is required for the people whose income are exempt from tax?

Like u/s 10(26) income of Tribal people are exempt from tax

One of friend is tribal, his gross receipts exceeds Rs.70 lacs, he does not maintain books of accounts so Audit cannot be done,

Now if he submit the return( For claiming Refund) without doing the Audit which penalty will arise i.e for Non maintanence of books of accounts or for not conducting audit.

Reply
Follow
Share

4 Replies

Sanat kumar (Chartered Accountant) (265 Points)
Replied 12 August 2011

Hi Manoj,

In my opinion, Section 44AB makes it mandatory for every person carrying on any business or profession to get his accounts audited if his turnover in business exceed Rs.60 lakhs or Gross receipt in profession exceeds Rs 15 lakhs.

Section 44AB does'nt provide exemption from the compulsory Tax Audit to any person whose income is exempt from tax.

Section 44 AA is also applicable in this case. (Assuming PGBP)

So in this case I think both penalty may be levied by the deptt. u/s 271A & 271B.

2 Like

PRAMOD PANDIT M.COM , CA FINAL (PROFESSIONAL SERVICES) (207 Points)
Replied 12 August 2011

As income already exempt so the evasion of tax and concelement of income doesnt arise. so as per my opinion there should not be any hard penalty but u ready to face some fixed penalty for non audit and non filing of itr.

1 Like

CA Anoop Dangwal (CA, M.com, B.com,) (899 Points)
Replied 12 August 2011

Originally posted by : Sanat kumar
	Hi Manoj, In my opinion, Section 44AB makes it mandatory for every person carrying on any business or profession to get his accounts audited if his turnover in business exceed 60 lakhs or Gross receipt in profession exceeds15 lakhs. Section 44AB does'nt provide exemption from the compulsory Tax Audit to any person whose income is exempt from tax. Section 44 AA is also applicable in this case. (Assuming PGBP) So in this case I think both penalty may be levied by the deptt. u/s 271A & 271B. correct

manoj (student) (93 Points)
Replied 12 August 2011

Originally posted by : manoj
	Plz tell whether Tax Audit is required for the people whose income are exempt from tax? Like u/s 10(26) income of Tribal people are exempt from tax One of friend is tribal, his gross receipts exceeds Rs. 70 lacs, he does not maintain books of accounts so Audit cannot be done, Now if he submit the return( For claiming Refund) without doing the Audit which penalty will arise i.e for Non maintanence of books of accounts or for not conducting audit.