Companies required to keep books under the Companies Act, and keeping them in electronic form, must use software with an audit trail that cannot be disabled, and must retain it. If Tally is that software, the trail feature must be on, must stay on, and must identify a person, not a shared Administrator. Non-company businesses are not all under the same MCA rule; they should still enable it. See the guide.
Answer
Is Tally audit trail mandatory?
For companies keeping electronic books, yes — a disableable log is not enough.