Audit of loss making private limited company

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Practicing CA (Querist)

12 February 2013 The Company started in February 2012. Upto Mar 12 they had no transactions but Directors Deposited 1 lac as capital. Hence whether Audit & Return for FY 2011-12 is required under Income Tax as well as under Companies Act?
Whether it is necessary to do audit of the Private Limited Company, if it is loss Making for FY 2012-13?
Under Income Tax Act, 1960
Under Companies Act, 1956

Ankit

Ankit (Expert)

12 February 2013 Dear Prajakta,

Statutory audit under companies act is mandatory for all the companies.

under income tax act, since there were no transactions, the turnover would not have exceeded the limit under 44AB.

so, no requirement of tax audit. but required under companies act.

Practicing CA

Practicing CA (Querist)

12 February 2013 Thanks sir, But for first year is Feb 12 to mar12 there were no transaction. From April 2012 onwards there are transaction, but the company is incurring losses. Whether for FY 2011-12 any Return is to be filed under both the acts & Audit under Companies Act is required?
And from April onwards (Since loss making) any audit is required under both the acts for FY 2012-13?

Ankit

Ankit (Expert)

12 February 2013 You are welcome.

yes..under section 139 of the IT act, company has to file the return even if there is a loss.

also, the criteria for tax audit is turnover and not profit or loss..so if the turnover(sales) exceeds 1 crore, audit is required.

under co. act, it is mandatory irrespective of the income or turnover