Section 44 ad

This query is : Resolved

Preetam Singh Shekhawat (Querist)
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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.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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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.

Preetam Singh Shekhawat

Preetam Singh Shekhawat (Querist)
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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?

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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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.

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