Clarification for reckoning the “Specified Number of Tax Audit Assignments” conducted under Section 44AB of the Income-tax Act, 1961

Posted: 23/12/2011 in Clarifications, ICAI, Tax Audit

Clarification for reckoning the “Specified Number of Tax Audit Assignments” conducted under Section 44AB of the Income-tax Act, 1961.

13-12-2011

Various statutes prevailing in India like DVAT,2004 requires the assessee to furnish an audit report in a form duly signed and verified by such particulars as may be prescribed under section 44AB of the Income-tax Act, 1961 i.e. Form 3CB/3CD. This had lead to the doubts as to whether such audits would be included in the ceiling of “Specified Number of Tax Audit Assignments”.

Considering the same, the Council at its 311th meeting held on 8th and 9th November, 2011 clarified that audit prescribed under any statute which requires the audit report in the form as prescribed under section 44AB of the Income-tax Act, shall not be considered for the purpose of reckoning the specified number of tax audit assignments if the turnover of the auditee is below the turnover limit specified in section 44AB of the Income-tax Act, 1961. For instance audit under section 44AD, audit under DVAT, 2004 (for turnover between 40 to 60 Lakhs) etc. will not be considered for inclusion in the present limit of 45 audits.

Source: The Institute of Chartered Accountants of India.

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