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

M/S. Baldiwala Brothers, Ahmedabad vs. The ACIT., Circle-5, Baroda

In the result, the appeal filed by the assessee in ITA

ITA 2177/AHD/2014[2008-09]Status: DisposedITAT Ahmedabad17 Sept 2019AY 2008-09

Bench: Shri Kul Bharatassessment Year: 2008-09 M/S. Baladiwala Brothers Acit, बनाम/ 1, Baldiwala House, Circle-5, Kahar Mohalla Baroda Vs. Outside Panigate Baroda-390017 (Appellant) (Revenue ) P.A. No.Aacfb4764C Appellant By S/Shri M.K. Patel & Shri Anil R. Sheikh, A.Rs Respondent By Shri N.K. Goel, Sr. D.R. Date Of Hearing: 16.09.2019 Date Of 17.09.2019 Pronouncement: आदेश / O R D E R Per Kul Bharat, J.M: This Appeal By The Assessee Is Directed Against Order Of The Cit(A)-V, Baroda Dated 7.5.2014 Pertaining To The Assessment Year 2008-09. The Assessee Has Raised Following Grounds Of Appeal: M/S. Baladiwala Brothers, Baroda 1. The Cit(A) Has Erred Both In Law & In Fact In Upholding Addition Of Rs.16,80,000/- Made By The Assessing Officer Alleged As Excess Stock Found During The Course Of Survey Which Is Erroneous Both On Point Of Law & On Point Of Fact. 2. Your Appellant Fur4Ther Submits That He Has Been Maintaining Regular & Proper Books Of Accounts Which Are Audited U/S 44Ab Of The Act & That Provisions Of Sales Tax/Vat Tax Applies & That Those Authorities Have Not Made By Adverse Remark To The Books Of Accounts, Stock Maintained Etc. & The Assessing Officer Have Not Rejected Books U/S 145 Of The Act Therefore The Cit(A) Ought To Have Deleted The Addition.

Section 133ASection 143(1)Section 143(3)Section 145Section 44A

Shabbir Hasham Sayyed, Pune vs. Income-Tax Officer, Pune

In the result, the appeal of the assessee is partly allowed

ITA 947/PUN/2017[2012-13]Status: DisposedITAT Pune05 Sept 2019AY 2012-13

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर अपील सं. / Ita No.947/Pun/2017 िनधा"रण वष" / Assessment Year : 2012-13 Shabbir Hasham Sayyed, New Ashiyana Enterprises, S.No.75/2, Room No.153, Sayyed Nagar, Hadapsar, Pune-411028. .......अपीलाथ" / Appellant Pan : Achps9564L बनाम / V/S. Ito, Ward-14(2), ……""यथ" / Respondent Pune. Assessee By : Shri Pramod Shingte Revenue By : Mrs. Shabana Parveen सुनवाई क" तारीख / Date Of Hearing : 26.08.2019 घोषणा क" तारीख / Date Of Pronouncement : 05.09.2019 आदेश / Order Per D. Karunakara Rao, Am: This Appeal Is Filed By The Assessee Against The Order Of Cit(A)-7, Pune Dated 08.12.2016 For The Assessment Year 2012-13. 2. The Grounds Raised By The Assessee Are As Under :- “1. On The Facts & In The Circumstances Of The Case & In Law The Learned Assessing Officer Erred In Making A Disallowance Of Rs. 66,84,217/- By Invoking Provisions Of Section 40(A)(Ia) Of The Income Tax Act, 1961 Without Realizing The Fact That Appellant Is An Individual & This Was The First Year Of Applicability Of Provisions Of Section 44Ab Of The Income Tax Act, 1961 & Therefore For A.Y. 2012 - 2013 No Tax Was Deductible Under Chapter Xvii B & Therefore Provisions Of Section 40(A)(Ia) Of The Income Tax Act, 1961 Do Not Have Any Application In The Appellant’S Case.

For Appellant: Shri Pramod ShingteFor Respondent: Mrs. Shabana Parveen
Section 143(3)Section 194CSection 3Section 40Section 40ASection 40A(3)Section 44A