Tax audit
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 June 2014
The Income Tax Return for F.Y 2012-13 is not filed and the assessee is a Distributor in Telecom Industry having a turnover of 70 to 80 lakhs.
The profit percentage is approx 2 to 2.5 %.
My question is whether he can file his Income tax return now as belated return and whether Tax Audit is applicable due to profit less than 8%.
If Tax Audit is applicable than how can now be done.
The profit percentage is approx 2 to 2.5 %.
My question is whether he can file his Income tax return now as belated return and whether Tax Audit is applicable due to profit less than 8%.
If Tax Audit is applicable than how can now be done.
17 June 2014
yes. He can very well file the return for Financial Year 2012-13. Audit should be done as the business falls under eligible business
17 June 2014
audit report submitinmg date was 30.9.2013 and date will extend by the deptt. 2-5 days and return filing date was 31.3.2014. now if you file return then you have to pay penalty for non audit 0.5% of sales but exceed Rs. 150000/-
17 June 2014
audit report submitting date was 30.9.2013 and date will extend by the deptt. 2-5 days and return filing date was 31.3.2014. now if you file return then you have to pay penalty for non audit 0.5% of sales but exceed Rs. 150000/-
17 June 2014
audit report submitting date was 30.9.2013 and date will extend by the deptt. 2-5 days and return filing date was 31.3.2014. now if you file return then you have to pay penalty for non audit 0.5% of sales but not exceed Rs. 150000/- and Rs. 5000/- for non filing of return.
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 June 2014
is tax audit applicable.
Whether any penalty or anything else is to be paid.
Whether any penalty or anything else is to be paid.
26 July 2025
Here's a clear summary regarding your query on **tax audit applicability and penalties for belated filing** for FY 2012-13:
---
### Situation Recap:
* Assessee is a **Telecom distributor** with turnover approx Rs. 70-80 lakhs.
* Profit margin approx 2-2.5% (less than 8%).
* ITR not filed within due date (31 March 2014).
* Tax audit due date was 30 September 2013 (extended by few days by department).
* Now wants to file **belated return**.
---
### 1. **Is Tax Audit Applicable?**
* For business, tax audit under **Section 44AB** is generally applicable if turnover exceeds Rs. 1 crore.
* However, if the assessee opted for presumptive taxation under **Section 44AD**, tax audit is **not required** if profit is at least 8% of turnover.
* In this case, turnover < 1 crore but profit < 8%.
* If **Section 44AD was NOT opted**, audit is applicable as turnover is high.
* If **44AD was opted**, tax audit is **NOT applicable**, but profit should be at least 8%. Since profit is less, 44AD is disqualified and audit may be applicable.
**Conclusion:**
Tax audit is applicable because profit is less than 8%, assuming 44AD is claimed but profit condition not met.
---
### 2. **Can Assessee File Return Now?**
* Yes, assessee can file **belated return** under **Section 139(4)**.
* However, the return is considered late, and penalties may apply.
---
### 3. **Penalty for Late Filing and Non-Compliance of Tax Audit:**
* **Late filing penalty:** Under Section 234F, a fee of Rs. 5,000 (if filed after due date but before 31 Dec of assessment year).
* **Penalty for non-compliance of tax audit (Section 271B):** Rs. 1,50,000 maximum.
* Additionally, under Section 271B, penalty for non-filing of tax audit report can be up to 0.5% of turnover/sales subject to a maximum of Rs. 1.5 lakhs.
* So, assessee may have to pay **penalty of Rs. 0.5% of turnover** (here, up to Rs. 1,50,000).
---
### 4. **How to Proceed Now?**
* Get tax audit conducted immediately for FY 2012-13.
* File tax audit report (Form 3CA/3CB and 3CD) along with belated return.
* Pay the applicable penalties (late filing + non-audit penalties).
* Be prepared to explain delays if asked by the tax department.
---
### Summary Table:
| Aspect | Position |
| ------------------------- | -------------------------------------- |
| Turnover | Rs. 70-80 lakhs |
| Profit % | 2-2.5% (<8%) |
| Tax Audit Applicable? | Yes (if 44AD profit condition not met) |
| Belated Return Filing | Allowed with penalties |
| Penalty for late filing | Rs. 5,000 approx. |
| Penalty for non-tax audit | 0.5% of turnover (max Rs. 1,50,000) |
| Recommended action | Get audit done & file return ASAP |
---
If you want, I can help you draft the journal entries or forms to be submitted, or guide through the audit compliance process. Let me know!
---
### Situation Recap:
* Assessee is a **Telecom distributor** with turnover approx Rs. 70-80 lakhs.
* Profit margin approx 2-2.5% (less than 8%).
* ITR not filed within due date (31 March 2014).
* Tax audit due date was 30 September 2013 (extended by few days by department).
* Now wants to file **belated return**.
---
### 1. **Is Tax Audit Applicable?**
* For business, tax audit under **Section 44AB** is generally applicable if turnover exceeds Rs. 1 crore.
* However, if the assessee opted for presumptive taxation under **Section 44AD**, tax audit is **not required** if profit is at least 8% of turnover.
* In this case, turnover < 1 crore but profit < 8%.
* If **Section 44AD was NOT opted**, audit is applicable as turnover is high.
* If **44AD was opted**, tax audit is **NOT applicable**, but profit should be at least 8%. Since profit is less, 44AD is disqualified and audit may be applicable.
**Conclusion:**
Tax audit is applicable because profit is less than 8%, assuming 44AD is claimed but profit condition not met.
---
### 2. **Can Assessee File Return Now?**
* Yes, assessee can file **belated return** under **Section 139(4)**.
* However, the return is considered late, and penalties may apply.
---
### 3. **Penalty for Late Filing and Non-Compliance of Tax Audit:**
* **Late filing penalty:** Under Section 234F, a fee of Rs. 5,000 (if filed after due date but before 31 Dec of assessment year).
* **Penalty for non-compliance of tax audit (Section 271B):** Rs. 1,50,000 maximum.
* Additionally, under Section 271B, penalty for non-filing of tax audit report can be up to 0.5% of turnover/sales subject to a maximum of Rs. 1.5 lakhs.
* So, assessee may have to pay **penalty of Rs. 0.5% of turnover** (here, up to Rs. 1,50,000).
---
### 4. **How to Proceed Now?**
* Get tax audit conducted immediately for FY 2012-13.
* File tax audit report (Form 3CA/3CB and 3CD) along with belated return.
* Pay the applicable penalties (late filing + non-audit penalties).
* Be prepared to explain delays if asked by the tax department.
---
### Summary Table:
| Aspect | Position |
| ------------------------- | -------------------------------------- |
| Turnover | Rs. 70-80 lakhs |
| Profit % | 2-2.5% (<8%) |
| Tax Audit Applicable? | Yes (if 44AD profit condition not met) |
| Belated Return Filing | Allowed with penalties |
| Penalty for late filing | Rs. 5,000 approx. |
| Penalty for non-tax audit | 0.5% of turnover (max Rs. 1,50,000) |
| Recommended action | Get audit done & file return ASAP |
---
If you want, I can help you draft the journal entries or forms to be submitted, or guide through the audit compliance process. Let me know!
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