Section 142 (2A) of the Income Tax Act states that the assessing Ofricer has the power, at any stage of proceedings before him, to direct the assessee to get his accounts audited by an “Accountant” nominated bY the Income Tax Commissioner. Such an order may be issued if the assessing officer considers it necessary in view of the nature or complexity of the assessee’s accounts or in the interest of revenue. The remuneration and expensespayable to the auditor shall be fixed by the commissioner and will bepaid by the assessee. The audit report must be in the prescribed forrn and should set forth such particulars as may be prescribed and as may be required by the assessing officer. Thus the selective tax audit scheme as envisaged in sub-sections (2A) to (2D) reveals some significant features. These are 1. The audit under section 142 (2A) is not mandatory but selective. The Assessing Officer can, with the prior approval of the Chief Commissioner or Commissioner, direct the assessee to get his accounts audited by an ‘Accountant’. His powers are so wide that he may direct n such audit if search and seizure proceedings have been initiated against the assessee or if the assessee is showing abnormally low profits or if the books of account seem prima fade to have been e improperly kept. 2. The audit can be ordered even if the assesses accounts have already been audited under section 44AB or under any other law. 3. The assessee must submit the audit report within the period f specified by the Assessing Officer. The period can be extended by the Assessing Officer — not exceeding 180 days from the date of receipt of the audit order — on the assesse’s application and for good and sufficient reasons. 4. The audit fees and the incidental expenses to the audit, determined by the Commissioner, shall be paid by the assessee. If the assesse defaults, proceedings will be taken against him for recovery of the amount. 5. The powers of the auditor have not been specifically laid down.
Write briefly the contents of Tax Audit Report.
Under Section 44AB of the Income Tax Act, the tax auditor is Auditing required to submit in a prescribed form the report on the result of his audit work and a statement of particulars. In this report th auditor is to state his opinion on the following matters: (a) Whether the assessee’s profits or losses have been correctly reflected in the financial statements. (b) Whether the Balance Sheet gives a true and fair view of the assessee’s financial position. (c) Whether the information given in various documents an statements annexed to the audit report are true and correct.