4.2       Query

Retention Period of Books of Accounts, Vouchers

etc. to comply with Provisions of Income-tax

Act, 1961.

(a)Irrespective of the duration stipulated by the Income-tax Act or any other Act for retention of Books of Accounts of limited companies, what is the maximum period for which it is considered advisable for the limited companies to retain their Books of Accounts and what is the general practice in this regard?

(b)Similarly, what will be the safe period for retention of all vouchers and subsidiary records of limited companies?

                                                       Opinion                                                               July 7, 1962

Section 209 (4A) of the Companies Act, 1956, requires every company to preserve its books of accounts in good order for a period of not less than eight years. On the other hand, under Section 149 of the Income-tax Act, 1961, the assessment of an assessee can be reopened before the expiry of sixteen years from the end of the relevant assessment year. The question of the maximum period of time for which it is advisable for limited companies to retain their books of account should therefore be decided in the light of the above mentioned provisions. The facts and circumstances of each case would necessarily differ and it is not possible to give any general advice in the matter.