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

Off Shore India Limited, Karnataka vs. DCIT, Cir-4, Kolkata

In the result, the appeal of the assessee is allowed

ITA 720/KOL/2014[2003-2004]Status: DisposedITAT Kolkata22 Sept 2017AY 2003-2004

Bench: Shri P.M. Jagtap, Am & Shri S.S. Viswanethra Ravi, Jm] I.T.A. No. 720/Kol/2014 Assessment Year: 2003-04 Off-Shore India Limited.............................……………………………………………Appellant (In The Case Of Astor Dealers Pvt. Ltd. – Since Amalgamated) 31, Netaji Subhas Road, 4Th Floor Kolkata - 700001 [Pan : Aacca5565B] D.C.I.T., Circle-4………………………………………………...........................................Respondent P-7, Chowringhee Square Kolkata - 700069 Appearances By: Shri P.J. Bhide, Fca Appearing On Behalf Of The Assessee. Shri Kalyan Nath, Addl. Cit Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : September 11, 2017 Date Of Pronouncing The Order : September 22, 2017 Order Per P.M. Jagtap, Am This Appeal Filed By The Assessee Is Directed Against The Order Of Ld. Cit (Appeals) – Xii, Kolkata Dated 14.02.2014 Whereby He Confirmed The Penalty Of Rs. 1,00,000/- Imposed By The Ao Under Section 271B Of The Income Tax Act, 1961. 2. The Assessee In The Present Case Is A Company & As Per Its Memorandum Of Assets, It Is Engaged In The Business Of Investment In Debentures & Shares. Although The Securities Held By It Were Shown At Investment By The Assessee Company In The Balance Sheet, The Profit Or Loss Arising From The Purchase & Sale Of Such Securities Was Treated As Business Income. During The Course Of Assessment

Section 271BSection 44A

Sunil Kumar Sahu, Angul vs. ITO, Angul Ward, Angul

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

ITA 418/CTK/2016[2009-10]Status: DisposedITAT Cuttack22 Aug 2017AY 2009-10

Bench: Shri N.S.Saini, Am & Shri Pavan Kumar Gadale, Jm आयकर अपील सं./Ita No.418/Ctk/2016 ("नधा"रण वष" / Assessment Year :2009-2010) Sri Sunil Kumar Sahu Vs. Income Tax Officer, Proprietor, Sahuji Jewellers, Angul Laxmi Bazar, Angul "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Ahwps 4582 L (अपीलाथ" /Appellant) (""यथ" / Respondent) .. "नधा"रती क" ओर से /Assessee By : Shri Damodar Pati, Ar राज"व क" ओर से /Revenue By : Shri D.K.Pradhan,Citdr सुनवाई क" तार"ख / Date Of Hearing : 16/08/2017 घोषणा क" तार"ख/Date Of Pronouncement 22/08/2017 आदेश / O R D E R Per Shri Pavan Kumar Gadale, Jm: The Assessee Has Filed An Appeal Against The Order Of Cit(A)-2, Bhubaneswar, In Appeal Reference No.0062/2014-15, Dated 29.08.2016, Passed U/S.143(3)/254 Of The Income Tax Act, 1961 For The Assessment Year 2009-2010, Wherein The Assessee Has Raised The Following Grounds :- 1. That, The Order Of Assessment Suffers From The Vice Of Illegality & Arbitrariness. B. The, Ld. Below Forum Committed Manifest Error In Law & In Facts In Making Addition Of Rs.27,29,214/- To The Total Income Which Is Contrary To The Observation Of The Hon’Ble Itat. C. That, Addition Of Rs.27,29,214/- Is Illegal & Arbitrary Because The Incident For Taxation Has Not Occurred & More Particularly In Absence Of Postulation Of The Act For Taxation. D. That, The Addition Of Rs.27,29,214/- Is Illegal & Arbitrary Because Of Non-Consideration Of Indexation, Capital In The Hand Of The Appellant & Computational Mismatch. E. That, Addition Of Rs.36,666/- Towards Income Out Of Other Sources Because Of The Fact That The Said Amount Has Not Been Received By The Appellant. F. That The Other Grounds If Any, Shall Be Urged At The Time Of Hearing.

For Appellant: Shri Damodar Pati, ARFor Respondent: Shri D.K.Pradhan,CITDR
Section 133ASection 143(3)