tax audit

This query is : Resolved

amit (Querist)

09 May 2009 once a company is subject to tax audit and in subsequent year its turnover falls below 40 lacs then is it liable for tax audit

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

09 May 2009 No.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

10 May 2009 NO

Late CA Sampat Jain

Late CA Sampat Jain (Expert)

10 May 2009 no

taxindiaconnect

taxindiaconnect (Expert)

11 May 2009 The limit of section 44 AB are required to be year on year basis. The relevant portion of the section is reproduced here under to understand the provision better -
44AB. Every person, -
(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year ----
(b) -----
© ----
get his accounts of such previous year audited by an accountant before the specified date……….
From the plain reading of the above portion of the section 44AB, one can observe the that the in clause a the words any previous years have been used with the turnover limit and the line after clause ( c) the words such previous years has been used while putting up to get the accounts audited, Thus if both the sentences, if are read together it reads as following
“Every person carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year get his accounts of such previous year audited by an accountant before the specified date……….
Thus the use of such previous year is intended to refers to any previous year in which the sales turnover or the receipt exceeds of exceeds Rs forty lakh. So in your query no need to get the accounts tax audited in the year in which the turnover is less then Rs forty lac. The same ratio applies to clause b and c also. I fully agree with previous replies

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