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Co-operative Societies which are carrying on business or profession in India need not be subjected to tax audit as per the provisions of Income Tax Act 1961. This is evident from a mere reading of Section 44AB and Rule 6G. An analysis of the same is given hereunder.

"Section 44AB. Every person, -

(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year ; or
..........

get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed:
...........

Provided also that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this Section."

INTERPRETATION OF 3RD PROVISO OF SECTION 44AB

A Co-operative Society is subjected to audit as per Co-operative Societies Act under which it was registered. if such Society gets the accounts of such business or profession audited under such law and furnish that Audit report and a further report by an accountant it shall be sufficient compliance with the provisions of Section 44AB. It is to be noted that the statutory requirement is the submission of report of audit conducted under the Co-operative Societies Act and a further report by an accountant in the form prescribed under the Section.

Now, we may find out what forms are prescribed under the Section 44AB and in Rule 6G for the "report of audit conducted under the Co-operative Societies Act" and for "further report by an accountant".

"Report of audit of accounts to be furnished under section 44AB.

Rule 6G. (1) The report of audit of the accounts of a person required to be furnished under section 44AB shall, -

(a) in the case of a person who carries on business or profession and who is required by or under any other law to get his accounts audited, be in Form No. 3CA;

(b) in the case of a person who carries on business or profession, but not being a person referred to in clause (a), be in Form No. 3CB.

(2) The particulars which are required to be furnished under section 44AB shall be in Form No.3CD."

ANALYSIS OF RULE 6G

"Report of the audit as required under such other law" mentioned in 3rd proviso of Section 44AB should be in Form No.3CA. Who should sign the Form 3CA is an interesting question for which an answer is yet to be find out. What could be the form for "further report by an accountant"? There is no such form prescribed in the Income Tax Rules. It is also anybody’s guess.

What about Form No.3CD? It has no relevance as far as Co-operative Societies are concerned since this Form is prescribed for "particulars" mentioned in the last limb of Section 44AB (a). Fulfillment of condition in the 3rd proviso i.e. submission of report of audit, takes away the requirement of form No.3CD in as much as it shall be sufficient compliance with the provisions of Section 44AB.

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Category Income Tax, Other Articles by - Radhakrishnan K.V. 



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