Tax audit applicability in case t/o doesn't exceed the limit

An assesse (Partnership Firm) was under obligation to do tax audit U/s 44AB for few earlier years as it had exceeded the threshold turnover limit for those years. Now, during the year 2017-18, it has turnover less than Rs. 1 crore (due to separation of the business).

Whether the tax audit U/s 44AB is continued to be applicable for FY 17-18 also just because of the fact that the assessee was covered U/s 44AB in the earlier years?

In my opinion, tax audit shall not be applicable to this assessee as its turnover is less than the prescribed limit & whenever its turnover would exceed the limit, then only it would attract Sec.44AB. Am I correct?

You are requested to support your answer citing the provision or any caselaw or any article whatever may be.

Replies (6)

"Whether the tax audit U/s 44AB is continued to be applicable for FY 17-18 also just because of the fact that the assessee was covered U/s 44AB in the earlier years?"

NO

 

"In my opinion, tax audit shall not be applicable to this assessee as its turnover is less than the prescribed limit & whenever its turnover would exceed the limit, then only it would attract Sec.44AB. Am I correct?"
 

Yes Correct..... Section 44AB of income tax clearly describes tax audit liability when the limits of turnover/gross receipts exceeding in previous year, without any sting attached to any preceeding year/s.

No tax audit is not applicable
If your Net income is below @ 8% of your annual gross turnover/receipt, then you must be audited u/s 44AB even if your gross turnover is below 1 Crore.

If you are eligible for sec. 44AD but want to declare income less than 8% or not want to claim benefit of sec 44AB then you should be audited u/s 44AB.
Yes... I agreed to Mr Dhirajlal Rambhia Sir and Mr Sathish Sir views...

As per the query tax Audit not mandatory if you will declare the profit 8% or above...

Thank you all...

if your turnover is less than prescribed limit and you offer your income 8% or more, then no tax audit required

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