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

Gouri Shankar Jain HUF, Kolkata vs. P.C.I.T-11, Kolkata

In the result, appeal of the assessee is allowed

ITA 1662/KOL/2019[2014-15]Status: DisposedITAT Kolkata25 Nov 2020AY 2014-15

Bench: Sri J. Sudhakar Reddy, Hon’Ble & Sri S.S. Godara, Hon’Ble) Assessment Year: 2014-15 M/S. Gouri Shankar Jain Huf…………….…………………................................……………….….........Appellant C/O. Agarwal Vishwanath & Associates 133/1A, S.N. Banerjee Road Pushkal Bhawan 3Rd Floor Kolkata – 700 013 [Pan : Aachg 9644 L] Vs. Principal Commissioner Of Income Tax-11, Kolkata…..………...…..................……………..Respondent Appearances By: Shri Ankit Jalan, Advocate, Appeared On Behalf Of The Assessee. Shri Ram Bilash Meena, Cit D/R, Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : October 1St, 2020 Date Of Pronouncing The Order : November 25Th, 2020 Order Per J. Sudhakar Reddy, Am :- This Appeal Filed By The Assessee Is Directed Against The Order Of The Learned Principal Commissioner Of Income Tax - 11, (Hereinafter The “Ld. Pr. Cit”), Passed U/S. 263 Of The Income Tax Act, 1961 (The ‘Act’), Dt. 15/03/2019, For The Assessment Year 2014-15. 2. There Is A Delay Of 27 (Twenty Seven) Days In Filing Of This Appeal. After Perusing The Petition For Condonation Of Delay, We Are Convinced That The Assessee Was Prevented By Sufficient Cause In Filing The Appeal In Time. Hence, We Condone The Delay & Admit This Appeal. 3. The Assessee Is A Huf & Had Filed Its Return Of Income For The Assessment Year 2014-15 On 29/11/2014, Declaring Total Income Of Rs.15,08,400/-. The Case Was Selected For Scrutiny Under Cass For The Reason That It Had Low Net Profit Or Loss Shown From Large Gross Receipts. The Assessment Was Completed U/S 143(3) Of The Act On 20/12/2016. Later, The Ld. Pr. Cit, Revised The Assessment U/S 263 Of The Act After Issuing Showcause Notice On 28/02/2019. The Reasons For Revision Are Given In Para 4 Page 2 Of The Order U/S 263 Of The Act, Passed By The Ld. Pr. Cit, Which Is Extracted For Ready Reference:-

Section 143(3)Section 263Section 43B

Sri P Abubakar, Hospet vs. Assistant Commissioner of Income Tax Circle-1, Bellary

In the result, the appeal of the assessee is dismissed

ITA 2058/BANG/2017[2007-08]Status: DisposedITAT Bangalore11 Nov 2020AY 2007-08

Bench: Shri N.V. Vasudevan & Shri Chandra Poojarishri P. Abubakar, Pwd Contractor & Mine Owner, 5Th Cross, M J Nagar, Dam Road, Hospet – 583 203 ….Appellant Pan Akcpp8967H Vs. Assistant Commissioner Of Income Tax, Circle 1, Bellary. ……Respondent. Assessee By: Smt. Sheetal, Advocate. Revenue By: Shri Kannan Narayanan, Addl. Cit Date Of Hearing : 09.11.2020. Date Of Pronouncement : 11.11.2020. O R D E R Per Shri Chandra Poojari, A.M. : This Appeal Filed By The Assessee Is Directed Against The Order Of The Cit(A), Gulbarga Dated 24/08/2017 & Pertains To The Assessment Year 2007-08. 2. The Assessee Has Raised The Following Common Grounds Of Appeal: “ 1. On The Facts & In The Circumstances Of The Case, The Ld.Cit(Appeals) Erred In Upholding The Impugned Addition Of Rs.45,14,322/- In Respect Of Alleged Prior Period Expenses. 2. The Ld. Cit(Appeals) Ought To Have Accepted The Explanation Offered By The Appellant Vide Letter Dated 29.02.2012 & Further Submissions Made Before Him & Refrained From Upholding The Impugned Addition. 3. Without Prejudice, The Impugned Addition As Upheld By The Learned Cit(Appeals) Is Arbitrary, Excessive & Ought To Be Deleted In Full. 4. For These & Such Other Grounds That May Be Urged At The Time Of Hearing, The Appellant Prays That The Appeal May Be Allowed.”

For Appellant: Smt. Sheetal, AdvocateFor Respondent: Shri Kannan Narayanan, Addl. CIT
Section 143(3)Section 263

Aditya Mohapatra, Dhenkanal vs. Principal CIT-2, Bhubaneswar

In the result, the appeal of the assessee is allowed

ITA 155/CTK/2016[2012-13]Status: DisposedITAT Cuttack04 Sept 2020AY 2012-13

Bench: Shri C.M. Garg, Jm & Shri L.P. Sahu, Am आयकर अपीऱ सं./Ita No.155/Ctk/2016 (नििाारण वषा / Assessment Year :2012-2013) Sri Aditya Mohapatra, Vs. Pr.Cit-2, Bhubaneswar Prop.: Orissa Motors, Kujakanta, Main Road, Dhenkanal. Pan No. : Aaacl 6593 N (अऩीलाथी /Appellant) (प्रत्यथी / Respondent) .. ननधाारिती की ओर से /Assessee By : Shri Damodar Pati, Advocate िाजस्व की ओर से /Revenue By : Shri M.K.Gautam,Cit Dr सुनवाई की तािीख / Date Of Hearing : 26/08/2020 घोषणा की तािीख/Date Of Pronouncement : 07/09/2020 आदेश / O R D E R Per L.P.Sahu, Am: The Assessee Has Filed This Appeal Against The Revisionary Order Passed U/S.263 Of The Act By The Pr.Cit-2, Bhubaneswar, Dated 21.03.2016 For The A.Y.2012-2013. 2. Earlier This Appeal Was Disposed Off By This Tribunal Vide Order Dated 29.08.2017. Thereafter The Assessee Challenged The Order Of The Tribunal Before The Hon’Ble Jurisdictional High Court & The Hon’Ble High Court Vide Order Dated 21.03.2018 Passed In W.P.(C)No.22608 Of 2017 Set Aside The Order Of The Tribunal To Pass Fresh Order Directing The Assessee To File The Documents As He Wants. Accordingly, The Appeal Of The Assessee Restored To Its Original Number & Finally Heard With The Consent Of Both The Parties.

For Appellant: Shri Damodar Pati, AdvocateFor Respondent: Shri M.K.Gautam,CIT DR
Section 143(2)Section 194HSection 263Section 40