Doubts regarding tax audit..plz help

1. Limit is fixed for per person. Hence he is liable for tax audit.

2. No peanlty. You can file your return now if the audit was completed within due date. But make sure the proper reasons "inbuilt" in your hands to reply the notice of the department; if any; which comes laters on.

3. Full facts and seriousness of the case is to be decided first.

If client is careless; then for him; no penalty is huge. He is liable to bear it. (Don't worry at all when the client himself  is too smart).

4. Most of the businessman in India ( more than 80% are unorganized in number) never give due importance to the proper accounting. Call such persons to your office frequently to rectify the SYSTEM. If they are not ready to PAY THE FEE according to your "labour;" don't BOTHER ABOUT THEM. Better find GOOD PERSONS who really need your services.

DUNIYA ME KAAM KI KAMI NAHI. ( Kami knowledge ki hoti hai ).

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ACHCHHE LOGO KO BHI ACHCHHE PROFESSIONAL BADI MUSHKIL SE MILTE HAI.  

( Evidence : Big firms are not facing any shortage of work; they have already overloaded ).

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( You may not accept this right now; but after some years you will accept the above TRUTH). 

Thanx a lot Sir....My first 2 queries are completely solved and regarding 3rd query,,There consultant (ITP) made mistake in filing and client is not educated enough to understand this...

I am handling his work from this year and have 2 ways to choose from...

1) continue with last year closing balance as current year opening balance or

2) reflect the correct position even though last year closing and current year opening mismatch..

Please advise me sir...what to do...

1) continue with last year closing balance as current year opening balance

2)   Pass correction entries as on the 1st day of current year.

Ok...Sir...Thanx a lot....

Agree with Shri Warrier. 

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Adding some important point : 

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THESE ITEMS PERTAINING TO PREVIOUS YEAR ARE "PRIOR PERIOD ITEMS" and show them separately while making Financial Reporting. 

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Further; if the amount is huge and noticed by the Income Tax Department; your client may be issued notice for Income Escaping Assessment. In these circumstances; the assessment would be reopened .

First correction and proper entries need to be passed and brought to the correct position again last years closing balance shall be brought forward as well. Other tings and issues will follow and can be taken care of and addressed