In order to clarify the doubt raised by majority of members in respect of inclusion of audits conducted under sections 44AD, 44AE and 44AF of the Income-tax Act, 1961 in the specified number of tax audit assignments, the extracts of Para 6 of Chapter VI “Tax Audit assignments under section 44AB of the Income-tax Act, 1961” of the Council General Guidelines No.1-CA(7)/025/2008 dated 8th August, 2008 have been reproduced below:

“Provided also that the audits conducted under section 44AD, 44AE and 44AF of the Income-tax Act, 1961 shall NOT be taken into account for the purpose of reckoning the “specified number of tax audit assignments”.

The complete text of said Guidelines can be downloaded by clicking on the link below:

12766Council_General_Guidelines

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Category : Income Tax (25039)
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Tags : ICAI (2163)

0 responses to “Clarification regarding non-inclusion of audits conducted under sections 44AD, 44AE and 44AF in the 'specified number of tax audit assignments'”

  1. CA Kunal Malpani says:

    I feel the above opinion is incorrect considering the amended position of Sec 44AB. As on 01.04.2011 the section has been amended by inserting a new clause (d) by Finance (No.2) Act, 2009 w.e.f. 01-04-2011.

    It reads :

    [(d) carrying on the business shall, if the profits and gains from the business are deemed to be profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,]

    Your view would be tenable for the period before this amendment as this clause was not present. But now as the same has been inserted specifically stating Sec 44AD audits then the same has to be included in working out the limit of Audits for Sec 44AB as even institute cannot issue a circular contrary to The Income Tax Act, 1961.

    Please let us know if any current opinion of institute is available.

    Thank You.

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