URGENT LETTER TO ICAI

The content below is by CA M S Bhatia
Dear All,

HAPPY DEEPAWALI !!!!

ICAI has invited suggestions for PRE-BUDGET MEMORANDA to be submitted to MOF. This is the opportunity to place suggestions regarding Centralised Allotment of Tax Audits before MOF through ICAI officially. Please note that ICAI can consider making panel for TAX AUDITS only on the request of MOF.

So, do not lose this opportunity.

Besides sending suggestions to ICAI , you may also consider sending the same directly to MOF. As a citizen of India, you have the full right to make suggestions for country's Budget.

During our campaign " A WAKE UP CALL " a number of suggestions have been received from members to improve the system. On the basis of those suggestions, a letter has been drafted for the convenience of the members. You are requested to just copy the following letter and Email at prebudget@icai.org to ICAIunder a cc to wakeupcas@hotmail.com ( for record purposes only) , after writing your Name and Membership no: on it. The letter is strictly in the format as required by ICAI. You may make any modification, if you so wish, without disturbing the structure of the letter. ICAI is bound to consider these suggestions officially. Avail this opportunity to put forward your views .

Circulate this letter to all your CA friends so that this letter reaches ICAI in thousands.

LAST DATE FOR SUBMISSION TO ICAI is 31.10.2011. Don't be Late. Email Immediately atprebudget@icai.org under cc to wakeupcas@hotmail.com

May this Diwali bring bright future to our profession by bestowing equal professional opportunities to all of us.

Thanks!!!!

CA M.S.BHATIA
JALANDHAR
PUNJAB
(09855209344)


DRAFT OF THE LETTER TO BE SUBMITTED TO ICAI

To
The Chairman,
The Central Direct Taxes & Indirect Taxes Committee,
Institute of Chartered Accountants Of India,
New Delhi.

SUB:- SUGGESTIONS FOR PRE-BUDGET MEMORANDA ON DIRECT TAXES -2012
Dear Sir,
I hereby make following suggestions relating to POLICY matters and PROCEDURAL matters :-

ISSUE No: 1

ISSUE : INDEPENDENCE , INTEGRITY AND EXCELLENCE are integral parts of an AUDIT function. But while doing TAX AUDITS u/s 44AB of the Income Tax Act, 1961 , an auditor never feels to be an independent as the appointment is made by the CLIENT . Auditor is also dependent on the client for fee too . In such a situation Auditor cannot work with the EXELLENCE he/she is expected to put in the Audit work, being done on behalf of the Income Tax department.

SUGGESTION : Allotment of TAX AUDIT should be made by some Independent Agency in consultation with ICAI and Income Tax Department. Every Assessee liable to get his accounts audited to inform Income Tax Department by making a DECLARATION that he is required to get his/her accounts audited u/s 44AB , within 30 days from the end of the Financial Year.

RATIONALE :
a) This will ensure INDEPENDENCE , INGERITY and EXCELLENCE in the audit work. Which may further lead to INCREASE in TAX REVENUES due to better vigil by Auditors.
b) The job assigned by Income Tax Department can only be justified, if Tax Audit is allotted by some Independent Agency, without any interference of the Assessee.

ISSUE NO.2

ISSUE : Name of the CA firms being used, by some professionals (NON-CA), fraudulently in the Income Tax Returns without their knowledge resulting in Fake Tax Audits. This defeats the very purpose of the TAX AUDITS

SUGGESTION : The income Tax return of the Auditee should be digitally signed by both the Auditee and Auditor.

RATIONALE : This will help in restricting the fraudulent use of CA firm's name.

ISSUE NO: 3

ISSUE : Income Tax Returns being uploaded by some professionals even without conducting the audits before the due date.

SUGGESTION : The scanned copy of Audit Report in the PDF format should be uploaded along with the return of income tax, just as in the case of Annual Return being uploaded on the MCA site.

RATIONALE : This will ensure that a proper audit has been conducted and TAX AUDIT report has been obtained by the Auditee before the due date of return.

ISSUE NO: 4

ISSUE : Audits being conducted by CAs in excess of the prescribed limit of 45 Tax Audits.

SUGGESTION : Facility on NSDL site, should be provided , whereby every CA can see the number of TAX Audits conducted in his name, by putting in his membership no: and password. The ICAI may also be provided same facility to see the number of TAX AUDITS conducted by each CA.

RATIONALE : This will help in monitoring the TAX AUDIT limit of 45 tax Audits, effectively. This is necessary to ensure QUALITY in Audit work.

Above suggestions , if implemented, will go along a way in uplifting the image of the profession.

Thanking You.

Yours Sincerely,

Name :
Membership No: