https://www.cheggindia.com/earn-online/what-is-a-tax-audit/
"An income tax audit is conducted to evaluate or review the accounts of any individual or business to ensure that tax returns are accurately filed. The accounts are scrutinized or inspected during an audit to verify if they are in accordance with Indian income tax laws and regulations. It aims to ensure the factual veracity of the returns filed and keep fraudulent tax practices in check. A tax audit is mandatory as per the Section 44AB of the Income Tax Act, 1961 for a specific class of taxpayers.
Charted Accountant conducts tax audits on behalf of the Income Tax Department, The chartered accountant appointed for conducting a tax audit goes through the taxpayer’s financial records and verifies their compliance with various tax provisions. After completing the audit, the CA draws a report which must be filed by the taxpayer along with their tax returns.
If any errors are identified during the tax audit, a taxpayer may be required to pay penalties, additional tax, and interest. So, a taxpayer must maintain accurate and complete records and ensure accordance with the income tax laws and provisions to avoid any hassles during the tax audit.
Understanding tax audits can help taxpayers ensure that they comply with tax laws. By being knowledgeable about tax audits and audit preparation, taxpayers can reduce the occurrence of discrepancies in their tax returns. Doing so can also help them communicate efficiently with tax auditors and help ensure a smoother audit process.
Further, understanding tax audits can help identify opportunities for tax savings and minimize the risk of future audits. It enables a taxpayer to devise a tax-paying strategy to optimize their tax situation. "