SAMPLE CHAPTER S. 44AB
I.T. ACT, 1961
1.404
[Audit of accounts of certain persons carrying on business or profession.
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44AB. 31Every person,—
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(a) carrying on business shall32, if his total sales, turnover or gross receipts32, as the case may be, in business exceed or exceeds 33[one crore rupees] in any previous year 34[***] 35[***]: [Provided that in the case of a person whose—
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(a) aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five per cent of the said amount; and (b) aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five per cent of the said payment, this clause shall have effect as if for the words “one crore rupees”, the words “37[ten] crore rupees” had been substituted:] [Provided further that for the purposes of this clause, the payment or receipt, as the case may be, by a cheque drawn on a bank or by a bank draft, which is not account payee, shall be deemed to be the payment or receipt, as the case may be, in cash; or]
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29. Inserted by the Finance Act, 1984, w.e.f. 1-4-1985. 30. See also Circular No. 452, dated 17-3-1986 (Kachha and Pucca Arhatiyas), Circular No. 561, dated 22-5-1990 (Period to be covered by auditor), Press Release, dated 10-12-1999 (Action on incomplete audit reports) and Circular No. 5/2021, dated 25-3-2021 (Deferment of reporting under clauses 30C & 44 of Form No. 3CD till 31-3-2022). For details, see Taxmann’s Master Guide to Income-tax Act. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act. 31. See rule 6G. Prescribed audit reports are as under:— (i) Audit report in case of person who carries on business or profession and who is required to get his accounts audited under any other law: Form 3CA (ii) Audit report in case of person who carries on business or profession and who is not required to get his accounts audited under any other law: Form 3CB (iii) Prescribed particulars in case of (i) and (ii) above: Form 3CD. Under proviso to rule 12(2) audit report shall be furnished electronically. 32. For the meaning of the term/expression “shall” and “total sales ... gross receipts”, see Taxmann’s Direct Taxes Manual, Vol. 3. 33. Substituted for “sixty lakh rupees” by the Finance Act, 2012, w.e.f. 1-4-2013. Earlier, “sixty lakh rupees” was substituted for “forty lakh rupees” by the Finance Act, 2010, w.e.f. 1-4-2011. 34. Words “or years relevant to the assessment year commencing on the first day of April, 1985, or any subsequent assessment year” omitted by the Finance Act, 1988, w.e.f. 1-4-1989. 35. Word “; or” omitted by the Finance Act, 2020, w.e.f. 1-4-2020. 36. Inserted, ibid. 37. Substituted for “five” by the Finance Act, 2021, w.e.f. 1-4-2021. 38. Inserted, ibid.