What does section 65 regulate?

It regulates audit by tax authorities. Read the exact text, conditions, exceptions and transaction date together.

Which subordinate law should be checked?

Rule 101. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.

What evidence should be retained?

Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.

Can portal behaviour override the statute?

No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

Section 65 - Audit by tax authorities

Chapter XIII - Audit

ACTIVEOFFICIAL_TEXT_CAPTUREDindex,follow

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Finin2min Summary - Section in 2 Minutes

Allows a Commissioner-authorised tax audit at the taxpayer’s place or the department’s office for a financial year, part or multiple years. Notice must ordinarily give at least fifteen working days. Audit should finish within three months from commencement; Commissioner may extend by up to six months with reasons. The taxpayer must provide facilities, records and information. Findings are communicated within thirty days; tax consequences require separate lawful proceedings.

Exact operative text

65. Audit by tax authorities.-(1) The Commissioner or any officer authorised by him, by way of a general or a specific order, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed. (2) The officers referred to in sub-section (1) may conduct audit at the place of business of the registered person or in their office. (3) The registered person shall be informed by way of a notice not less than fifteen working days prior to the conduct of audit in such manner as may be prescribed. (4) The audit under sub-section (1) shall be completed within a period of three months from the date of commencement of the audit: Provided that where the Commissioner is satisfied that audit in respect of such registered person cannot be completed within three months, he may, for the reasons to be recorded in writing, extend the period by a further period not exceeding six months. Explanation.-For the purposes of this sub-section, the expression “commencement of audit” shall mean the date on which the records and other documents, called for by the tax authorities, are made available by the registered person or the actual institution of audit at the place of business, whichever is later. (5) During the course of audit, the authorised officer may require the registered person,- (i) to afford him the necessary facility to verify the books of account or other documents as he may require; (ii) to furnish such information as he may require and render assistance for timely completion of the audit. (6) On conclusion of audit, the proper officer shall, within thirty days, inform the registered person, whose records are audited, about the findings, his rights and obligations and the reasons for such findings. (7) Where the audit conducted under sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74 or section 74A.

Paragraph-wise decode

Section-Rule-Form-Notification bridge

Rule 101

The mapping is a legal concordance, not a round-robin related-link list. It is limited to instruments certified in this phase.

Practical example

A registered entity receives ADT-01 for two financial years. It creates a reconciled data room, responds to audit observations, and receives ADT-02 findings.

Professional alert

An audit observation is not itself a tax demand. Demand must follow the applicable section, including section 74A for FY 2024-25 onward.

Implementation checklist

Fix the transaction, taxable period and jurisdiction.
Read every subsection, proviso, explanation and omission marker.
Open the mapped Rule, form, notification and circular.
Test State/UT variation and portal version.
Preserve evidence, approvals, working papers and acknowledgements.
Record the conclusion, assumptions, source date and reviewer.

Evidence and retention checklist

Contract, purchase order, invoice or underlying transaction document.
Registration, return, ledger, challan and portal acknowledgement.
Official Act/Rule/notification version used and effective date.
Internal tax position paper, computation and management approval.
Correspondence, notices, replies, orders and appeal papers where applicable.

Practical Q&A

What does section 65 regulate?: It regulates audit by tax authorities. Read the exact text, conditions, exceptions and transaction date together.
Which subordinate law should be checked?: Rule 101. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.
What evidence should be retained?: Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.
Can portal behaviour override the statute?: No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

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