Tax audit is an examination/review of accounts of any business /profession carried out by the taxpayer from an income tax viewpoint. A Tax audit makes the process of income computation for filing of return of income, much easier.
Tax audit is conducted to achieve the following objectives:
The Due date for filing the Return of Income for persons liable to Tax Audit is 30th September of the year succeeding the relevant financial year.
If the assessee gets his account audited u/s 44AB and furnish the said report as required, than penalty u/s 271B shall not be levied even if the return of income is filed after the due date specified u/s 139(1).
If any person fails to get his accounts audited as required under the provisions of section 44AB before the due date u/s 139(1), the AO may impose penalty which may be a sum equal to one-half percent of the total sales, turnover or gross receipts subject to a maximum of Rs. 1.5 Lakh.
It is the professional duty of the CA to ensure that the audit accepted by him gets completed on or before the due date. If there is any unreasonable delay on his part, he is answerable to ICAI, if the complaint is made by the client. However, if the delay in the completion of audit is attributable to his client, the tax auditor cannot be held responsible.
A CA in practice shall be deemed to be guilty of professional misconduct, if he accepts a position as auditor previously held by another CA without first communicating with him in writing.