If a taxpayer is liable to audit as per Section 44AB of the Income Tax Act, he/she must appoint a Chartered Accountant in practice to conduct a tax audit. The CA would prepare and upload Tax Audit Report on income tax e-filing portal. Once the CA files the report, the taxpayer should accept or reject the Tax Audit Report. The taxpayer can then file the Income-Tax Return.
Steps to Accept / Reject Audit Report
An assessee needs to follow the below steps to accept/reject the Audit Report.
- Login to Income Tax E-Filing Portal
Log in to the Income Tax E-Filing Portal using valid username and password.
- Navigate to ‘For your Action’
Go to Worklist > For your Action to directly navigate to the pending action of approving or rejecting the Audit Report.
- View Uploaded Form Details
Click on ‘Click Here (View uploaded Form Details)’ to view the details of the report uploaded.
- Select Assessment Year and Form Name
Select the Assessment Year and select the Form Name from the drop-down list.
- Click on View Form
To download the audit report and attachments like Balance Sheet and Profit & Loss Statement, click on View Form
- Select Accept or Reject
Here, you have the option to either accept or reject the report.
- Generate Signature File in order to Accept/ Reject
First Register your DSC and then navigate to ‘Submit ITR/Form Online’ in the utility and
a. Select the option USB Token
b. Select USB Token Certificate from the drop-down
c. Click on ‘Generate Signature File’
d. Enter the USB Token PIN. Click on ‘Ok’
- Signature file generated
After the signature file is generated, save it in the appropriate folder.
- Select Accept – Attach Signature File
Attach DSC (Digital Signature Certificate) file of the assessee to submit the form. Click on Submit.
- Select Reject – Enter Comments
If the assessee selects ‘Reject’, mention the reasons under the ‘Rejection Comments’ column. Click on Submit.
Once the assessee approves the audit report, the filing process is complete and it would be taken up for processing by the tax officer. In the case of a rejection, the CA has to upload the audit form again after making the necessary changes.
Tax Audit is required when the turnover of a taxpayer exceeds Rs. 1 cr in a particular Financial year. Filing Tax Audit is compulsory in order to file ITR. Tax Audit can only be filed by a CA.
Taxpayers are required to submit a Audit report filed by their CA u/s 44AB. However, if the taxpayer fails to get his accounts audited, then he/she will be liable for penalty under section 271B. The penalty shall be levied 1.5% of the total sales of INR 1,50,000 whichever is less.