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 Pending Action
Click on Pending Action from the dashboard and select worklist from the drop-down.
- Worklist dashboard
You can accept or reject the audit report from this dashboard.
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.