Tax Audit and Tax Audit Assessment

(a) Notwithstanding anything contained in this Act tax audit of records, Stock and related documents of a dealer, selected for this purpose may be conducted for the purpose of ensuring the compliance by the dealer for the requirements of the Act or for examining the correctness of periodical and final returns and admissibility of various claims including input tax credits; Provided further that no dealer may be selected for tax audit for an assessment year after the expiration of five years from the end of such assessment year. (b) Tax audit may be conducted by an officer, posted in the tax audit wing or by any other officer authorized for this purpose by the commissioner; (c) The selection of dealer or dealers for the purpose of tax audit shall be in the manner as may be prescribed by the Commissioner; (d) Tax audit may be taken up in the office, business premises or warehouse of the dealer. However, the officer conducting audit may, if he deems fit, require the dealer either to attend and produce or cause to be produced the books of accounts and other documents in his office or any other place which may be specified in the notice, If in compliance of the notice served in this sub-section, the dealer does not attend the office of the officer in charge of tax audit or any other place which may be specified in the notice; or if attends does not produce or cause to be produced the books of accounts and other documents, the officer in charge of tax audit may impose a penalty of upto Rs. 5,000/- for each non compliance of the notice. No such penalty shall be imposed without giving the dealer a reasonable opportunity of being heard. The provisions relating to recovery of dues shall mutatis mutandis apply for recovery of imposed penalty; (e) The officer conducting the tax audit shall have powers under section 42 of the Act and may also make or cause to be made extracts or copies from the books of accounts and other documents, inventory of stock, seek such information or statement, which may be useful and relevant to any proceeding under this Act. The dealer shall provide full co-operation and assistance to the audit party during the course of audit; If the dealer prevents or obstructs the officer from making extracts or copies from the books of accounts and other documents, inventory of stock or from seeking such information or statements required for the purpose of tax audit or does not cooperate and assist the audit party during the course of audit, the officer in charge of the tax audit may impose a penalty upto Rs. 10,000/ for each non compliance. No such penalty shall be imposed unless a reasonable opportunity of being heard has been given to the dealer. The provisions relating to recovery of dues shall mutatis mutandis apply for recovery of imposed penalty; (f) The tax audit authority shall after considering all the evidence collected by him or produced in course of the proceeding may :- (1) Confirm the self assessment or assessment order which has already been passed; or (2) Set aside the self assessment or assessment or reassessment order and reassess the turnover and tax of the dealer; or (3) Assess the amount of tax due from the dealer if no assessment has been made so far; Provided that no such assessment or reassessment shall be made unless a reasonable opportunity of being heard has been given to the dealer; Provided further that not more than three adjournments shall be granted to a dealer for hearing of the case under this Section; Provided further that period of limitation for making Assessment or Reassessment under this section shall be applicable as per section 32 of this Act. (g) The tax audit officers shall have all the powers of an Assessing Authority.