Skip to content

CA Intermediate · Taxation · Accounts and Records

Kapoor Textiles, a registered taxpayer, is subject to a pending appeal before the Appellate Authority concerning the tax for a particular year. The seventy-two month retention period for that year's records has otherwise expired. Which statement is correct about retention under section 36 of the CGST Act?

Where an appeal or similar proceeding is pending, the taxpayer must keep the records until one year after its final disposal or for seventy-two months from the annual return due date, whichever is later. Mere expiry of the normal period does not permit destruction.

  1. ARecords may be destroyed since the retention period has expired
  2. BRecords relating to the appeal must be retained for one year after final disposal of the appeal or proceeding, or for seventy-two months from the due date of the annual return, whichever is laterCorrect
  3. CRecords must be retained for exactly ten years in all appeal cases
  4. DOnly the invoices need to be retained and the books may be destroyed

Explanation

Section 36(1) proviso requires a person who is a party to an appeal, revision, or any other proceeding, or who is under investigation for an offence, to retain the books until one year after final disposal of that proceeding, or for the normal seventy-two months, whichever is later. So the expiry of the normal period does not allow destruction.

Did you get it right without looking?

One question tells you little. A timed set on Accounts and Records shows your real accuracy, how long you take and where you lose marks.

Practise Accounts and RecordsFree diagnostic mock

More Accounts and Records questions