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

Anuraj Singh Sabarwal, Kolkata vs. ITO, Ward 31(2), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 390/KOL/2021[2013-14]Status: DisposedITAT Kolkata15 Dec 2021AY 2013-14

Bench: Shri Sanjay Garg & Shri Rajesh Kumari.T.A. No.390/Kol/2021 Assessment Year: 2013-14 Anuraj Singh Sabarwal..........................................…………………….……Appellant P.4A, C.I.T. Road, Kolkata-700019. [Pan:Avcps7765H] Vs. Ito, Ward-31(2), Kolkata…………..…...............……........……...…..…..Respondent Appearances By: Shri K. M. Roy, Advocate, Appeared On Behalf Of The Appellant. Smt. Ranu Biswas, Addl. Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : December 15, 2021 Date Of Pronouncing The Order : December 15, 2021 Hearing Through Video Conferencing Order Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 13.06.2021 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit’] Confirming Penalty Levied By The Assessing Officer U/S 271A As Well As 271B Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. That Having Initiated Penalty U/S 271A For Non-Maintenance Of Books, Simultaneous Invocation Of Section 271B Is Bad In Law. 2. That Once Having Been Established That No Book Of Accounts Are Maintained, Conduct Of Audit Is An Impossibility & Hence Initiation Of Penalty Is Unsustainable & Hence Liable To Be Quashed. 3. That The Appellant Reserves The Right To Raise Additional Grounds.” Though The Registry Has Pointed Out That The Appeal Is Time Barred, However, In 2. View Of The Decision Of The Hon’Ble Supreme Court In The Case Of Miscellaneous Application No.665 Of 2021 In Smw(C) No.3 Of 2020, The Period Of Filing Appeal During The Covid-19 Pandemic Is To Be Excluded For The Purpose Of Counting The Limitation Period. In View Of This, This Appeal Is Treated As Filed Within The Limitation Period.

Section 147Section 2Section 271ASection 271BSection 44A