Tax Audit under the Income Tax Act is currently allowed to be conducted only by the chartered accountant within the meaning of the Chartered Accountants Act, 1949 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act but Proposed Direct Tax Code 2013 allows Tax Audit to be conducted not only by Chartered Accountants but also by Company Secretaries and Cost Accountants.
Clause 88 of the Proposed Direct Tax code prescribes who needs to get the book audited under the direct tax code 2013 and it further says that the same needs to be audited by an accountant. The Term accountant is been defined in Clause 320(2).
Lets read the provisions as per Clause 88 and Clause 320(2)
Direct Tax Code 2013
Audit of accounts and reporting of international transaction
88. (1) Every person, who is required to keep
and maintain books of account under section 87 shall get his accounts for the
financial year audited—
(a)
where the person is carrying on one or more professions , the aggregate gross
receipts of such profession or professions exceed twenty-five lakh rupees in
the financial year;
(b)
where the person is carrying on one or more businesses , the aggregate total
turnover or gross receipts, as the case may be, of such business or businesses
exceed one crore rupees in the financial year.
(2) The audit of the accounts referred to in sub-section (1)
shall be carried out by anaccountant and
the report of audit be obtained in the prescribed form duly signed and verified
by such accountant and setting forth such particulars as may be prescribed.
(3) The person referred to in sub-section (1) shall furnish the
report of audit referred to in subsection (2) to the assessing officer on or
before the due date,
in the manner as may be prescribed.
(4) The provisions of sub-section (1) shall not apply to the
business where the income therefrom is determined under paragraph 1 of the
Eleventh Schedule.
(5) A
person shall be deemed to have complied with the provisions of sub-section (1),
if the person—
(a)
gets the accounts of his business audited as required by, or under, any other
law for the time being in force, before the due date; and
(b)
obtains by the due date the report of the audit as required under
such other law and a further report by an accountant in the form prescribed
under sub-section (2).
(6) A
person referred to in sub-section (2) of section 87 shall furnish a report of
the international transaction or the specified domestic transaction entered
into during the financial year to the Transfer Pricing Officer and the
Assessing Officer on or before the due date, in the manner as may be
prescribed.
(7) The
report referred in sub-section (6) shall be obtained from an accountant in such
form duly signed and verified in such manner, as may be prescribed.
Meaning of Accountant as per Clause 320 (2)
320. In
this Code, unless the context otherwise requires —
(1)
*******
(2) “accountant”means a chartered accountant within the meaning of the Chartered
Accountants Act, 1949 and who holds a valid certificate of practice under
sub-section (1) of section 6 of that Act, and shall include-
(i) a
company secretary within the meaning of the Company Secretaries Act,
1980 ;
(ii) a
cost accountant within the meaning of the Cost and Works Accountants
Act, 1959 ; or
(iii)
any person having such qualifications as the Board may prescribe, for
the purposes specified in this behalf.
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It is welcome move by the Ministry of Finance, but I have some reservation
ReplyDeleteon following issues, please any one clarify:-
Bar Council of India Vs A.K.Balaji [SLP (Civil) No(s) 17150-17154/2012] Dt.04.07.2012 (SC) and A.K.Balaji Vs Govt. of India (2012) 35 KLR 290 21.02.2012 (Madras HC) it was clearly held by Hon’ble Supreme Court & Madras High Court that Advocates alone are entitled to practice the Profession of Law both in litigious & non-litigious matters. This also confirms to Section 29 of Advocates Act. The verdict of Supreme Court is the declared law of land, binding on all throughout the territory of India under Article 141 of Indian Constitution & contravention liable for action under Article 129 read with Article 142(2) of Indian Constitution. Income-Tax Act being “LAW” Advocates alone are entitled to plead & act before the assessing officers of Income-Tax Deptt. & other than Advocates should appear before the assessing officers under CPC/Evidence Act against summons issued U/s 131 of Income-Tax Act. On date, Section 288(2) of Income-Tax Act has been subjected to review of Apex Court verdict. Therefore, other than Advocates representing the assessee to plead & act U/s 288(2) is totally illegal, null & void
In Rule 12A of Income-Tax Rules, 1962 only following five class persons are authorised to prepare return under Income-Tax Act, among eight class of persons authorised to act as representative of assessee U/s 288(2) of Income-Tax Act. This means below mentioned five class of persons posses the knowledge of accounting standard prescribed in Section 145 of Income-Tax Act read with 14 Accounting Standard of CBDT required for Income-Tax Practice. Knowldge of AS framed by ICAI/IFRS is not yet all required for Income-Tax Practice.
ReplyDelete1. Legal Practitioners
2. Cost & Management Accountants
3. Company Secretaries
4. Chartered Accountants
5. Income-Tax Practitioners
All the above five class of persons satisfy the qualification prescribed under Income-Tax Act. Hence, there should not be any discrimination among them as far as practice of Income-Tax law is concerned. Ie, all persons should be equally authorised to acts, including tax audit & other certification work under Income-Tax Act, to meet the end of justice.
Your article is really informative. Thanks for sharing this details.
ReplyDeleteAudit firms in Chennai