Section 44AB of the Income Tax Act

Income-tax Act, 2025: s.63

Section 44AB of the Income-tax Act, 1961 corresponds to section 63 (Tax Audit) of the Income-tax Act, 2025.

Read section 63 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 44AB is Ashok Pai v. CIT (292 ITR 11), cited in 812 of the 2,486 judgments on BharatTax that turn on this section.

Leading authorities on Section 44AB

Ashok Pai v. CIT
292 ITR 11 · 2007 · Supreme Court
812
citing judgments

“Concealment of particulars of income” and “furnishing inaccurate particulars of income” are two distinct offences under Section 271(1)(c) of the Income Tax Act. A penalty cannot be levied under one limb if the show cause notice or basis for penalty specifies the other, as this constitutes a complete variance in the reasons for assuming jurisdiction.

MALPE VISHWANATH ACHARYA AND OTHERS v. STATE OF MAHARASHTRA AND ANOTHER. 365 32
9 SCC 1 · 2018 · Supreme Court
533
citing judgments
Saurashtra Cement and Chemical Industries Ltd. v. CIT
213 ITR 523 · 1995 · High Court
311
citing judgments

Expenditure is deductible in the year it is determined and crystallised as a liability, even if it relates to a transaction of an earlier year, provided accounts are maintained on a mercantile basis.

CIT v. Vijay M. Mistry Construction Ltd.
355 ITR 498 · 2013 · High Court
252
citing judgments

In cases of alleged bogus or hawala purchases where the existence of transactions is not entirely denied, only the profit element embedded in such purchases, and not the entire purchase price, can be added to the assessee's income. The focus is on determining a reasonable profit percentage for such additions.

Mahindra and Mahindra Ltd. v. DCIT
30 SOT 374 · 2009 · ITAT
201
citing judgments

The Commissioner of Income Tax (Appeals) cannot expand the scope of an assessment or improve the Assessing Officer's case in a manner that usurps the revisional power of the Commissioner of Income Tax under Section 263 of the Income-tax Act.

Chandra Kishore Jha v. Mahavir Prasad
8 SCC 266 · 1999 · Supreme Court
163
citing judgments

If a statute or law prescribes that a thing must be done in a particular manner, then it must be done in that manner alone and in no other way. This principle mandates strict adherence to statutory procedures.

CIT v. Contimeters Electricals (P.) Ltd.
317 ITR 249 · 2009 · High Court
140
citing judgments

The requirement to file an audit report along with the return of income under section 80-IA(7) and similar provisions is directory, not mandatory. Such a report suffices if filed at any time before the assessment is framed.

Vijay Trading Co. v. ITO
388 ITR 377 · 2016 · High Court
119
citing judgments

When purchases are found bogus, only the profit element embedded therein, and not the entire purchase value, can be added to the assessee's income.

CIT v. Berger Paints (India) Ltd.
254 ITR 503 · 2002 · High Court
118
citing judgments

A deduction claimed under Section 80-IB (or 80-IA) cannot be denied solely on the ground of non-filing or delayed filing of the audit report in Form 10CCB, as such procedural requirements can be treated as directory, and delays may be condoned.

Surajmal Parsuram Todi v. CIT
222 ITR 691 · 1996 · High Court
114
citing judgments

A penalty under Section 271B for failure to get accounts audited cannot be levied if a penalty under Section 271A has already been imposed for non-maintenance of books of account.

Judgments on Section 44AB

Smt. Kamini J. Patel, Baroda vs. The ITO, Ward-2(3), Baroda

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 1350/AHD/2016[2011-12]Status: DisposedITAT Ahmedabad08 Oct 2018AY 2011-12

Bench: Shri Rajpal Yadav & Shri Waseem Ahmedआयकर अपील सं./ Ita No. 1350/Ahd/2016 "नधा"रण वष"/Assessment Year: 2011-12 Smt. Kamini J. Patel, Vs. Ito, 65, Manisha Society, Ward – 2(3), Old Padra Road, Baroda. Baroda – 380 020 Pan No. Akbpp 6312 M अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri M. S. Chhajed, A.R. Revenue By : Shri Mudit Nagpal, Sr. D.R. सुनवाई क" तार"ख/Date Of Hearing : 01.08.2018 घोषणा क" तार"ख /Date Of Pronouncement : 08.10.2018 आदेश/O R D E R Per Waseem Ahmed: The Captioned Appeal Has Been Filed At The Instance Of The Assessee Against The Appellate Order Of The Learned Commissioner Of Income-Tax (Appeals)-5 Vadodara [“Cit(A)” In Short] Relevant To Assessment Year 2011-12. 2. Assessee Has Raised The Following Grounds Of Appeal:- “1. The Order Passed By The Ld. Cit(A) Is Against The Law, Equity & Justice. 2 The Ld. Cit(A) Has Erred In Law & On Facts In Upholding The Adhoc Disallowance Of Expenses Made By The Ld. A.O Of Rs. 10,53,798/- 3 The Ld. Cit(A) Has Erred In Law & On Facts In Upholding The Addition For Unaccounted Interest Made By The Ld. A.O Of Rs.63,922/-. 4 The Ld. Cit(A) Has Erred In Law & On Facts In Upholding The Addition For Agriculture Income Made By The Ld. A.O Of Rs.348880/-. 5 The Appellant Craves Liberty To Add, Amend, Alter Or Modify All Or Any Grounds Of Appeal Before Final Appeal.”

For Appellant: Shri M. S. Chhajed, A.RFor Respondent: Shri Mudit Nagpal, Sr. D.R
Section 44A

ITO 20(2)(3), Mumbai vs. Network Consulting, Mumbai

In the result, the appeal filed by the revenue is hereby ordered to be dismissed

ITA 4571/MUM/2014[2011-12]Status: DisposedITAT Mumbai29 Aug 2018AY 2011-12

Bench: Shri R. C. Sharma, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.4571/Mum/2014 (निर्धारण वर्ा / Assessment Year: 2011-12) The Ito-20(2)(3), 411, बिधम/ M/S. Network Consulting Piramal Chambers, Lalbaug, 102, Osia Friendship, 51, Vs. Mumbai-400012. Gaothan Lane No.4, Andheri (W), Mumbai-400058. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aahfn2945C (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri Suman Kumar (Dr) Assessee By: None सुनवाई की तारीख / Date Of Hearing: 11.07.2018 घोषणा की तारीख /Date Of Pronouncement: 29.08.2018 आदेश / O R D E R Per Amarjit Singh, Jm: The Revenue Has Filed The Present Appeal Against The Order Dated 16.05.2014 Passed By The Commissioner Of Income Tax (Appeals) -31, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2011- 12. 2. The Revenue Has Raised The Following Grounds: - “1. The Ld Clt(A) Has Erred On The Facts & Circumstances Of The Case & In Law In Allowing The Deduction U/S 10A Of The Act Amounting To Rs. 61,43,026/- Without Appreciating The Fact That As Per Clause 32 Of The Audit Report U/S 44Ab In Form No. 3Cd Submitted By The Assessee, The Auditor Has Mentioned That The Firm Is Into Service Industries & As Per Details Given By The Assessee A.Y.2011-12

For Appellant: NoneFor Respondent: Shri Suman Kumar (DR)
Section 10Section 10ASection 10A(1)Section 143(2)Section 1QSection 44A