The document outlines key points for a special audit of a company under section 142(2A) of the Indian Income Tax Act of 1961. It lists several areas the audit should review, including proper maintenance of books of accounts, accounting for all income accruals, compliance with tax deduction and deposit provisions, expenses and deductions claimed, and checks for embezzlement. The special audit aims to inspect the company's financial records and transactions in depth to ensure compliance with relevant taxation laws and accounting standards.

1. By: Asija & Associates LLP
Chartered Accountants

2.  Whether proper books of accounts are maintained as per Section 44AA ;
 All Accrual of Income should have been accounted by the assessee
Specially with respect to:-
 Projects Completed, as per Accounting Standards 7.
 Government Grant as per Accounting Standards 12.
 Supervision / Centage Charges as per the terms of Contract.
 Interest on Fixed Deposits and Interest bearing Funds.
 Reconciliation of Income reported in profit and loss account with gross
receipts shown in TDS certificates / 26AS statement.
 Review Security Deposits / EMD / Performance Guarantee which needs
to be forfeited as per the terms of contract.
 Review the Cash Credits as per the provision of Section 68
 Obtain the Confirmation of:-
 Security Deposits / EMD / Performance Guarantee
 Sundry Creditors and Expenses Outstanding at the end of the years
 Site Liabilities outstanding or accounted for during the year.
M/s Asija & Associates, Chartered Accountants
Key Points for Special Audits u/s 142(2A)

3. Key Points for Special Audits U/s 142(2A)
 Review the Compliance of the Provision of Chapter XVII of the Income
Tax Act, 1961
 Cases of Non Deduction or Short Deduction or Delay in deduction of
TDS under Section 192, 194C & 194J,
• Specially with respect to Accruals at the end of the year
• At the time of Payment or Credit whichever is earlier
• In case of Contravention ; disallowance as per section 40(a).
• Genuineness of Provisions made at the year end and TDS there on
 Instance of delay or Non Deposits of Tax- Disallowance
 Delay in Deposit of TDS Returns and Issuance of Form 16 & 16A
 Review the cases on which penalty u/s 201(1A), 234E, 276B, 271C,
271H and 272A(2) may be imposed.
 Checking of Interest u/s 234A, 234B & 234C on account of Contravention
of Advance Tax & Self Assessment tax liability.
 Loans and advances obtained or settled in contravention of sections 269SS
and 269T.
M/s Asija & Associates, Chartered Accountants

4.  Review the Vouchers and Supporting Documents in depth of and for :-
 All Construction Expenses incurred
 Labour & Contractual Staff Payments, ascertain the genuineness of the
Muster Rolls and Staff Appointments and their Salary.
 Review the Purchase Made specially from unregistered dealers .
 Classification of Expenses in Capital & Revenue nature.
 Prior Period Expense which needs to be disallowed as per the provision
of Section 40 and 40A.
 Bonus, trade tax and Income tax
 Purchases made should be tracked with GRN and stores accounts should be
reviewed to check the authenticity and timing of purchase.
 Valuation of stock in hand of raw materials, stores and finished stock is as
per Section 145A
 The Stock in hand is in conformity of the physical stock as per physical
verification report.
 Method of accounting employed by the assessee is as per the provisions of
section 145(2). M/s Asija & Associates, Chartered Accountants
Key Points for Special Audits U/s 142(2A)

5.  Review the payments that are in contravention of section 40A(3).
 Whether provisions of Section 43B are being complied with while debiting
expenses in the profit and loss account.
 Depreciation has been correctly calculated as per the provision of section 32
 Inquire into the genuineness of the expenses debited in Profit & Loss account
as per Section 30 to 37.
 Review Deduction Claimed as per Chapter VIA of the Income Tax Act, 1961.
Specially with Respect to Section 80P.
 Review all the areas of embezzlement as reported by Internal / Statutory /
Government Auditors like CBI- EOD, C&AG, Sahkari Evam Panchayat
Lekha Pariksha Sangthan or such other agencies who have inspected the
accounts of the assessee.
……Thank You….
 Note1: The above Presentation has been made by us in response to the offer letter for the proposed audit
of the said entity circulated by your office vide your letter dated 04/03/2015.
 Note 2: The above Key Points mapped by us is not exhaustive and has been prepared by us on the basis of
our experience of Audit of large Construction Companies, which are similar to the kind of business / work
carried on by the assessee whose special audit is proposed.
 Note 3: The Final audit plan shall be made by us, if our firm is appointed for the said work, keeping in
mind the requirement of Form 6B and shall also cover such areas as required by the Assessing Officer.
Key Points for Special Audits U/s 142(2A)
M/s Asija & Associates, Chartered Accountants