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TAX AUDIT REPORT U/S 44AB AND FILING ITR

RAJESH VERMA (Individual) (54 Points)

17 September 2010

I have some query regarding filing ITR and submitting Tax Audit Report u/s. 44AB. As per law, in case ITR is flied there is no need to enclose any document with ITR (including Tax Audit Report u/s. 44AB). But as per provision of section 271B - penalty is imposible for failure to furnish a report u/s. 44AB by the specified date. Then how the provision of section will be met in the following two situation :

1. ITR being filed before due date, but Audit report u/s. 44AB neither filed alongwith ITR nor furnished separately; and

2. ITR not filed before due date and Audit report u/s. 44AB also not furnished separately.

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5 Replies

Rahul Ramesh (CA Final, BCom, MBA) (1084 Points)
Replied 17 September 2010

Please refer to circular No.3/2009 dated 21-5-2009

7. Following clarifications are also issued in respect of certain issues arising from furnishing the returns in the above mentioned forms:

(i) An assessee should obtain the report of audit from an accountant under section 44AB of the Act on or before the due date of the furnishing of the return and should fill out the relevant columns of the return forms on the basis of such report. However, the report of audit should not be attached with the return or furnished separately any time before or after the due date. The assessee should retain the report with himself. If called for by any income-tax authority during any proceeding under the Act, it shall be incumbent upon the assessee to furnish/produce the same in original. 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 continue to be attracted. ''''

RAJESH VERMA (Individual) (54 Points)
Replied 17 September 2010

Ok. From the language of para 7 of said circular it appears that it is related with the situation when the ITR is being filed within due date. The mention that report is not to be furnished anytime on or after due date seems to be related when the ITR is being filed within due date. There is no mention of the situation when the case is so that ITR is being filed after due date.

Furhter, suppose we assume it relates to both situation i.e. ITR being filed within due date and after due date, there shall had been made necessary amendment in section 271B also, is not it, as in that section it is clearly written report to be furnished before specified date.

Furhter, suppose as per the circular no 3/2009 Audit Report not require to be filed at any time, then in what situation provision of section 271B be applicable. The same is making lot of confusion and require further clarification.

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CA PRIKSHIT WADHWA (CHARTERED ACCOUNTANT) (339 Points)
Replied 23 September 2010

I think the clarification applies to both the situations viz ITR being filed within due date and after due date. Neither any amendment has been done in Section 44AB nor in section 271B. But the circular does not says that relevant columns of the return forms should be filled on the basis of such report BEFORE DUE DATE.

These columns can be filled after due date too. The circular 3/2009 has provided immunity to the assessee from sec 271B for not furnishing the TAx audit report. So tax audit report is to be obtained before due date and furnishing of Report or ITR is not necessary before due date.