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TMI BlogFiling of Tax Audit report- confusions, delay and remedy.X X X X Extracts X X X X X X X X Extracts X X X X ..... Filing of Tax Audit report- confusions, delay and remedy. - By: - C.A. DEV KUMAR KOTHARI - Income Tax - Dated:- 6-10-2008 - - S. 44AB - filing of tax audit report (TAR): As per S. 44AB , as it stands now filing of tax audit report is necessary. The TAR is to be filed within specified date. For the A.Y. 2008-09 it was 30.09.08 (except in areas where extension has been announced- Bihar, Orissa J K). To avoid penalty u/s 271B the Tax audit report u/s 44AB should be submitted before specified date that is before end of 30.09.08 (except in areas where extension has been announced- Bihar, Orissa J K). merely obtaining TAR within specified time is not sufficient. In case TAR is not yet submitted, the same should be submitted as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early as possible with condonation of delay petition explaining reasonable cause for the delay. TAR of earlier years: During discussions with other tax professionals it has come to notice that many assesses who obtained TAR, furnished details of obtaining of such report and also relevant information in the e-return filed in time did not file TAR on the belief that TAR is to be filed only when the A.O. calls for the same. It has also been reported that in some books like Ready Reckoner it has been mentioned that it is not necessary to file TAR. This has caused confusion amongst tax payers and tax consultants. For example in Taxmann's Ready Reckoner ,31 st Edition at page A-119 in para 52.2 in note no. 2 it is interalia mentioned that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " The report of audit under section 44AB is not to be attached with new return forms. It should not be furnished separately also before or after the due date -----no penalty under section 271B shall be initiated or levied for not furnishing the tax audit report on or before the due date." However, in the Schedule of Period of Limitations at page 105 of the same book it is mentioned that limitation for obtaining TAR and furnishing the same to the Department is September 30 of the relevant assessment year. Therefore we find that there is clear conflict between commentaries / suggestions given in the same book at two places. Any provision or circular has not been referred to in para 52.2 in which it is stated that TAR nee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be filed and penalty will not be levied. Circular about annexure less returns: In CIRCULAR NO. 6/2008 DATED 18-7-2008 it is stated that the returns should be annexure less ( except ITR-7) and annexure should not be accepted by the receiving departments. However, there is no mention that it is not necessary to make compliance of S. 44AB by furnishing TAR. Suggestion: To avoid initiation of penalty or at least to seek non levy of penalty it is suggested that the TAR should be filed immediately. In case of delay, a COD petition can be submitted. A voluntary compliance, though belatedly will provide reasonable ground for the A.O. not to initiate penalty proceedings u/s 271B or to take a lenient view and drop penalty proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding or levy lower amount of penalty. In case the A.O. levies such penalty, there will be good ground to seek relief from the appellate authorities. A draft letter is appended below, which can be modified suitably in given circumstances: From: assessee - use letter head To, The Assessing Officer, …… PAN Assessment Year 2008-09- filing of Tax Audit Report u/s 44AB I / We have filed on line return on September, 2008 vide acknowledgment no…… Or I / we filed annexure less return in prescribed form and enclosures were not accepted by the department at the time of receiving the return. I / we had obtained Tax Audit Report dated….. before the due date (30.09.08). I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am / we are filing Tax Audit Report as required u/s 44AB of the income Tax Act, 1961 , kindly acknowledge receipt of the same. Circular about annexure less returns: In CIRCULAR NO. 6/2008 DATED 18-7-2008 it is stated that the returns should be annexure less ( except ITR-7) and annexure should not be accepted by the receiving departments. Therefore, we were under impression that TAR is also not required to be filed. Similar circular was issued in earlier year also. We relied on Taxmann's Ready Reckoner ,31 st Edition at page A-119 in para 52.2 in note no. 2 it is interalia mentioned that " The report of audit under section 44AB is not to be attached with new return forms. It should not be furnished separatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y also before or after the due date -----no penalty under section 271B shall be initiated or levied for not furnishing the tax audit report on or before the due date." Condonation of delay: ( in case TAR is filed after 30.09.08) I /we have filed return online,/ annexure less return in prescribed form in such return, most of information as given in TAR and also information about having obtained a TAR is already given. I / we had understanding that in view of e-return having been filed, TAR is required to be filed only when the A.O. call for the same. Some tax consultants have expressed such view, whereas some other have, later on expressed a contrary view that TAR should be filed before due date, even when a e-return is filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I am / We are simple business person and do not know intricate tax laws and procedural requirement and I / we have to depend on tax consultants. As the legal position is not very clear about this aspect and different views are prevailing. Therefore, with a view of abundant caution and playing safe I am / we are filing TAR. There has been delay of few days due to the following reasons: a. confusion about requirement of filing of TAR. Particularly due to boards circular for not filing/ accepting any document with the return and also commentary in a very popular ready reckoner, as pointed out above. b. excessive work load for filing of return, which further increased due to some technical problems and slow working of internet con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nections, computer and websites of I.T. Department etc. c. holidays and festive mood caused absence of many people and less working. In view of above facts and circumstances and considering the fact that I am / We are filing TAR voluntarily, and as soon as possible after the requirement came to our knowledge, that relevant information is already provided in e-return of income, and that the revenue has not suffered any damages due to delay in filing of TAR and the default if at all is of a technical nature caused due to reasonable causes, we request you to kindly condone the delay of few days in filing of TAR and please do not initiate penalty proceedings u/s 271B . Thanking you, Yours faithfully, Assessee ** For an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on behalf of Assessee ** Preferably should be signed by assessee, in case assessee is not available then A/R can file the same mentioning for and on behalf of assessee. - Reply By Shrawan Bhatia as = Your article regarding filing of Tax Audit reports is not what is stated by circulars of CBDT. I am attaching Circular of the previous year as also the current year where it has been clearly mentioned that no annexure is to be attached - including tax audit report. Even the instructions contained in the return forms are mentioning this fact. Be kind enough therefore to issue a rebuttal of what has been stated in the article. Dated: 9-10-2008 Reply By Devi Prasad Ruia as = I thank you for your article abou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t filing of TAR for asst year 2008-09, which is an eye opener and rightly suggestive. However, nothing has been mentioned about Filing of TAR for asst year 2007-08 for which almost 12 months have passed. Should the same petition be made and it be filed or there is no need to file TAR for asst. year 2007-08 ? I feel most of the assesses have not filed TAR for last year 2007-08 too, what is the remedy now? What is your suggestion? Dated: 10-10-2008 Reply By s.natarajan as = Sir we have to file Annexure less return. It means one has to be honest enough to follow the Income Tax and other acts. tax audit should be taken as complience audit. It also means that Govt.put faith on CA professionals on this matters. Then Why should we misunderstand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law and interpret otherwise. Law is always honest. So I feel it is not necessory to file TAR Dated: 10-10-2008 Reply By dilip khetan as = I am agree with Mr. Shrawan and think there is no need to rush to file TAR seperately after filing ITR. Dated: 27-11-2008 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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