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CA Final · Direct Tax Laws & International Taxation · Tax Audit and Ethical Compliances

Sundaram Fabrics Ltd has its accounts audited under the Companies Act. Its turnover requires a tax audit under section 63 of the Income-tax Act, 2025. Which statement is correct about compliance and the form of report under the Income-tax Rules, 2026?

Compliance is met by completing the statutory audit before the specified date and furnishing that report along with the accountant's report in Part A of Form No. 26. A separate tax audit is not needed, and Part B applies only to persons not audited under other law.

  1. AA separate tax audit is mandatory in addition to the statutory audit, with the report in Part B of Form No. 26
  2. BStatutory audit before the specified date plus furnishing its report with the accountant's report in Part A of Form No. 26 sufficesCorrect
  3. CNo report in Form No. 26 is needed because the company is audited under another law
  4. DThe report must be in Part B of Form No. 26 because it is a company

Explanation

Section 63(4) treats audit under another law as sufficient if done before the specified date and that report is furnished with the accountant's report in the prescribed form. Rule 47(1)(a) prescribes Part A of Form No. 26 for persons audited under other law. Part B applies to others.

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