Tax audit provisions

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: submit the auditor’s report.

On receiving a such notice, an assessee can avail of such an opportunity either by submitting the auditor’s report if the accounts have already been audited, and if the accounts have not been audited by then and he realises that the accounts are required to be audited, then he can in the given time get his accounts audited and submit the accounts along with the report of the auditor in terms of clauses (bb) and (d) of section 139(9). On furnishing of such s report with or without audited accounts as the case may be, the return becomes valid.

There may be yet another contingency where the assessee considers that he is not under an obligation to get his accounts audited under section 44-AB. In such an event, he may raise his objection before the assessing officer in response to a notice under section 139(9). Where such an objection is raised, it will be for the assessing officer to decide such an objection before taking any decision about validity of return.

In case the assessing officer accepts the objection, the assessing officer, in that case, will proceed with the assessment on the basis of the return already submitted before him. However, in case the objection raised by the assessee is overruled, the assessing officer will be required to call upon the assessee to comply with the provisions of section 44-AB within a reasonable time, to enable a valid return to be filed, which could be processed for a regular assessment.

The question of penalty for non-compliance cannot be inquired into without reading the provisions of sections 271-B and 273-B, as both are integrally enacted.

While section 271-B provides for consequence of non-compliance of section 44-AB, section 273-B provides immunity from penalty that arises under section 271-B.

Apparently, in terms of section 273-B, the assessing officer will be required to consider whether not getting the accounts audited by October 31 of the relevant assessment year was due to any reasonable cause, which the assessee may put forward as defence for failure to comply with the aforesaid provisions.

In either case, where the assessee raises an issue that his case does not fall within the purview of section 44-AB, before penalty could be levied, the assessing officer would be under an obligation to decide such an objection raised by the assessee.