Answer

1. F

   Facts

   If tax audit is required and not done, the 1961 Act allows a penalty of 0.5% of turnover, up to ₹1,50,000, under Sec 271B, unless reasonable cause is shown. For tax year 2026-27 onwards, a fixed late fee for a late audit report has been introduced under the 2025 Act.

2. P

   Provisions and law

   • Sec 271B (now Sec 446)Penalty for failure to get accounts audited
   • Sec 44AB (now Sec 63)Tax audit when turnover or receipts exceed limits
3. A

   Analysis

   On ₹1.5 crore turnover, 0.5% is ₹75,000, within the ₹1,50,000 cap. Get the audit done and file the report even if late, then file the return. If you have a genuine reason, such as illness or the auditor's resignation, document it for the reasonable cause defence. If cash receipts and payments were each within 5%, the audit limit is ₹10 crore and you may not need audit at all, so check first.

4. C

   Conclusion

   1. 1Check whether audit was required, considering the 5% cash condition
   2. 2Get the audit done and file the report immediately
   3. 3File the ITR by 21 November 2026 if possible
   4. 4Prepare a reasonable cause explanation if a notice comes

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.