Doubts regarding tax audit..plz help

Stat Audit 1408 views 6 replies

Well...I am bit confused about following 3 issues as i am getting different answers for that...Kindly solve this please...

 

 

1) A person is a proprietor in 2 units...say x and y...both are engaged into job work in same industry...Turnover of 1 is 50 lakhs and other is 54 lakhs...Thus in his form 26AS total receipt is  104 lakhs...Now is he liable for tax Audit...? Limit should be consider per business or per person??


 

2) What is the consequances if tax audit has been conducted in last september but return of last year (fin year-2010-11) is not filed yet..?..what is penalty for it...?

 

 

3) What to do if the last year return is not filed properly and there is no scope for revise the return as the return was filed after due date...now the closing cash and all were not proper...Now its causing huge loss to the client...Do I have to continue with last year closing balance as current year opening balance or should i reflect the correct position even though last year closing and current year opening mismatch..?

 

 

Please help me...

 

 

Best Regards

CA Darshak Shah

Replies (6)

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


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