Section 44 ad
This query is : Resolved
30 June 2017
Dear Sir,
Audit has been done by the CA for an entity showing less profit than 8 % of turnover but the same is not uploaded by CA still for the financial year 2015-16. Is there any consequences?
Income tax return is processed by the income tax department and refund is also received.
Audit has been done by the CA for an entity showing less profit than 8 % of turnover but the same is not uploaded by CA still for the financial year 2015-16. Is there any consequences?
Income tax return is processed by the income tax department and refund is also received.
30 June 2017
If the return is processed already and refund is issued there is nothing more to worry. though in a few cases where audit report was uploaded but ommitted to be approved return was placed under defective.
30 June 2017
Sir,
So in this case, for the new financial year 2016-17, audit report is compulsory, in case less than 8 % profit is shown?
So in this case, for the new financial year 2016-17, audit report is compulsory, in case less than 8 % profit is shown?
23 July 2025
Yes, for Financial Year 2016–17 (AY 2017–18), if profit is declared at less than 8% of gross turnover under Section 44AD, then:
✅ Tax Audit is Compulsory
Under Section 44AB(e), audit is mandatory if:
You are eligible for presumptive taxation under Section 44AD (i.e., individual, HUF, or partnership firm not LLP, engaged in eligible business),
Your turnover is up to ₹2 crore, and
You declare income less than 8% (or 6% if digital receipts), and
Your total income exceeds the basic exemption limit.
⚠️ Consequences of Not Uploading Audit Report:
If audit was applicable for FY 2015–16, and audit report was not uploaded, even though the ITR was processed and refund issued:
Technically, the return could have been treated as defective (u/s 139(9)) or invalid, but if no notice was issued by the department, it is considered processed.
However, this non-compliance could become relevant in future scrutiny or reassessment.
It does not waive the audit requirement for the next year (FY 2016–17).
🔍 Important Note for FY 2016–17:
If audit is again applicable for FY 2016–17 (less than 8% declared and income above exemption limit), you must:
Get accounts audited,
File tax audit report (Form 3CB/3CD) before the due date, and
Upload it through your CA's portal before filing ITR.
Let me know if you need:
Clarification on Section 44AD applicability,
Templates for Form 3CB/3CD, or
Guidance on ITR filing process with audit.
✅ Tax Audit is Compulsory
Under Section 44AB(e), audit is mandatory if:
You are eligible for presumptive taxation under Section 44AD (i.e., individual, HUF, or partnership firm not LLP, engaged in eligible business),
Your turnover is up to ₹2 crore, and
You declare income less than 8% (or 6% if digital receipts), and
Your total income exceeds the basic exemption limit.
⚠️ Consequences of Not Uploading Audit Report:
If audit was applicable for FY 2015–16, and audit report was not uploaded, even though the ITR was processed and refund issued:
Technically, the return could have been treated as defective (u/s 139(9)) or invalid, but if no notice was issued by the department, it is considered processed.
However, this non-compliance could become relevant in future scrutiny or reassessment.
It does not waive the audit requirement for the next year (FY 2016–17).
🔍 Important Note for FY 2016–17:
If audit is again applicable for FY 2016–17 (less than 8% declared and income above exemption limit), you must:
Get accounts audited,
File tax audit report (Form 3CB/3CD) before the due date, and
Upload it through your CA's portal before filing ITR.
Let me know if you need:
Clarification on Section 44AD applicability,
Templates for Form 3CB/3CD, or
Guidance on ITR filing process with audit.
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