A loan application has been rejected by bank replying that the balance sheet was not signed by a Practicing chartered accountant, it was signed by a Tax practicing lawyer, where the income was computed under section 44AD even the turnover was below to the limit of section 44AB.
Can the Bank do so…………………..
Is there any section applicable to this situation, if yes, please let me know the section?
Your early reply is highly appreciated..........!
Regards
Girish
Dear Girish, as the client is covered under presumptive taxation scheme, he is liable for Tax Audit u/s 44AB. Refer clause 10 of form 3CD for this. Also as per Explanation to section 288(2) the books of accounts shall be audited by an accountant who is only a CA within the meaning of CA Act, 1949 and no other person than a CA.
In your case the B/S is being signed by an Lawyer, who is not authorized to do so. Lawyers in general are not allowed to sign the B/s because they do not posess adequate Financial KNowledge unlike a CA.
Hence the stand taken by the bank is correct.
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