Tax Audit Requirement – Sec 44AB

Audit of Books of Accounts is mandatory under Income Tax Act, 1961 for eligible business/ profession. This is
commonly referred to as Mandatory Tax Audit u/s 44AB of IT Act. To summarise the main provisions of
mandatory tax audit (tax audit requirement) under Sec 44AB, an assessee is liable to get his Tax Audit done by
a Chartered Accountant, if in the previous year, the person is carrying on business and his total sales/turnover
exceeds Rs. 1 crore or the person is carrying on a profession, and his gross receipts exceed Rs. 25
Lakhs. (Please refer to our earlier article on Tax Audit for details).

 Audit Applicability (

Tax Audit Requirement Reports

As per Rule 6G of Income Tax Rules 1962, tax audit report is to be furnished in Form 3CA & Form 3CB and the
particulars which are required to be furnished under section 44AB should be in Form 3CD.

 In the case of a person who carries on business or profession and who is required by or under any other
law to get his accounts audited, the tax audit report shall be in Form 3CA &particulars in Form 3CD

 In the case of a person who carries on business or profession, but not being a person referred to in clause
(a), the tax audit report shall be in Form 3CB &particulars in Form 3CD

Due Date for filing Tax Audit Report
The due date for filing Tax audit requirement report is 30th September of the Assessment Year in the case of
company, any other person and for a working partner of a firm. This date has been specified in the Explanation
to section 44AB to be the due date for furnishing return of income under section 139 (1).

However, the due date for obtaining and furnishing of the report of audit under section 44AB of the Act for
Assessment Year 2014-15 in case of assessees who are not required to furnish report under section 92E of the
Act has been extended from 30
September, 2014 to 30th November, 2014 by CBDT vide order u/s 119 dated

Mode of filing Tax Audit Report
As per Notification No. 34 dated 1st May 2013, Tax Audit report under Section 44AB shall be furnished
electronically from 01st April 2013.

Penalty for not getting accounts audited or for not filing
Tax Audit Report u/s 44AB – Section 271B
The amount of penalty for non-compliance with tax audit requirement u/s Section 44AB shall be half a percent
of turnover / gross receipts or Rs. 1,50,000 whichever is lower. However Sec 273B states that no penalty may
be levied if there is a reasonable cause for such failure.

Can a Tax Audit Report be revised?

Tax Audit Report should not normally be revised. In case of revision, the audit report should be given in the
manner suggested by the Institute in SA-560 (Revised) “Subsequent Events”.

However, a Tax Audit Report may be revised on following grounds:
 Revision of accounts of a company after its adoption in annual general meeting.
 Change of law e.g., retrospective amendment.
 Change in interpretation, e.g. CBDT’s circular, judgments, etc.
 Any other reason like system/software error requiring change in report already uploaded.

In case a Tax Audit report is revised, then it must be mentioned in the revised report that the said report is a
revised report and a reference should be made to the earlier report also. In the revised report, reasons for
revising the report should also be mentioned.

The e-filing portal allows uploading and efiling of such Revised Audit Report by the CA for the same PAN and
Assessment Year.

Changes in Tax Audit Report

Several changes in Tax Audit Report have been introduced vide Income Tax (7th amendment) Rules
2014 which are applicable from this AY 2014-15 onwards. This will be covered in a separate article.


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