ADT-03 is a communication directing you to get your records, including books of account, examined and audited by a chartered accountant or cost accountant nominated by the Commissioner. It is issued under Section 66, usually during an ongoing scrutiny, inquiry or investigation.
An officer not below the rank of Assistant Commissioner can order it, with the Commissioner's prior approval, if, considering the nature and complexity of the case and the interest of revenue, he believes value has not been correctly declared or credit availed is not within normal limits.
Special audit is not routine. It is usually ordered where the case involves complex valuation, unusual credit patterns or large related-party transactions that ordinary scrutiny cannot resolve. Read the communication to identify what the department is concerned about, since that is where the auditor will focus.
The nominated accountant must submit the report within 90 days, which can be extended by a further 90 days on an application by you or the auditor, or for any material and sufficient reason. The expenses of the special audit, including the auditor's remuneration, are determined and paid by the Commissioner, not by you.
Give the nominated auditor access to the records named and keep a written list of what was provided. Prepare reconciliations for the specific areas of concern, such as related-party valuation, ITC on capital goods or input services, or high-value transactions. Respond to the auditor's queries in writing so there is a record.
Section 66(4) requires that you be given an opportunity of being heard on any material gathered in the special audit that is proposed to be used against you. The findings are communicated in ADT-04, and any demand can only follow through the regular show cause procedure. A professional can coordinate with the auditor and prepare responses on the findings.
Received a notice like this? Our chartered accountants draft the reply from your records and an authorised representative follows up with the officer, so you do not have to visit the department. Call or WhatsApp +91 63677 44602, or use the form below.
This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.
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