Audit U/s 65(6) and SCN for Same year

This query is : Resolved

VIPIN GUPTA (Querist)
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02 December 2024 Dear Sir,
Our Business audit has been done for Tax Period 2020-21 and the ADT -2 was issued to us on 08/11/2024, Now for the same tax period i.e 2020-21 our Assesseing officer has issued show cause notice U/s 17(5) and for excess ITC Claimed. My Query since our business audit has been completed for a given tax period can the assessing officer again take up the same year again. Kindly give us the section which should be considered in reply or any case law.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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03 December 2024 Section 73(1) applies to cases of non-fraudulent excess ITC claims or other discrepancies, and the AO can issue a show cause notice for recovery of tax, interest, and penalty within a period of 5 years from the due date of filing the return for that particular year.
Section 74(1) applies when there is fraudulent claim of ITC, in which case the AO can issue a show cause notice within 5 years from the date of the event leading to fraud.
While the audit has been completed and an Audit Report (ADT-02) has been issued, this does not prevent the Assessing Officer from initiating proceedings for recovery of taxes or issuing a show cause notice under Section 17(5) if there are discrepancies in the ITC claimed or if the credit is found to be ineligible.