Law:

Section:

Section 44AB, read with section 271B, of the Income-tax Act, 1961 - Audit of accounts of certain persons carrying on business and profession - Whether sections 44AB and 271B are violative of articles 14 and 19 of the Constitution - Held, no FACTS The petitioners, consisting of businessmen and professionals, challenged sections 44AB and 271B, rule 60-, and Form Nos. 30B, 3CC, 3CD and 3CE as being violative of articles 14 and 19(1)(g) of the Constitution of India contending (i) that the classification of assessee belonging to the category of businessmen on the basis of 'total sales, turnover or gross receipts' exceeding Rs. 40 lakhs was unreasonable, as it will bring within its ambit even small commission agents whose actual income might be much less, (ii) that the requirement of compulsory audit by an 'accountant' as denied in theExplanation below sub-section (2) of section 288 will give an unfair advantage to the chartered accountants who could also appear as an 'authorised representative' for the assessee, inasmuch as the assessee might prefer them to the legal practitioners for representing them in the assessment proceedings,( iii) that the requirement of compulsory audit was an unreasonable burden placed of the assessee when the information required to be furnished in this manner could be obtained directly from the assessee without the aid of the audit report, (iv) that this burden would become too onerous also because enough number of chartered accountants were not available for the work of compulsory audit of such assessees; and the 'specified period' of four months from the end of the accounting year was not adequate for the purpose, (v) that the provisions contained in sections 142(1), 142(2A) and 143(2) were sufficient to serve the purpose, and, therefore, the additional burden of compulsory audit was unreasonable, (vi ) that the provision for recovery of interest under section 139(8)(a) in case of delay in filing the return and in section 271B for penalty for non-compliance of section 44AB were unduly harsh, since the 'specified period' of four months from the end of the accounting period was inadequate to obtain the audit report and to file return,…

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