Rule 114-E (2) of Income Tax Rules requires reporting by any person who is liable for audit under Section 44 AB of Income Tax Act in respect of transaction mentioned at Sr. No. 11 .Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature (other than those specified at Sl. Nos. 1 to 10 of this rule, if any.)
Issue : Does it mean that applicability of Audit is to be seen for the year in which transaction is executed or a year preceding to the year of transaction.
If audit is required in the case of a person for the financial year 2016-17 under section 44AB, then such person is required to furnish the “Statement of financial transaction” pertaining to receipt of cash (exceeding Rs. 2,00,000 in respect of a transaction of sale of goods/services) during any time during the financial year 2016-17.