ICAI- WHERE & WHY WE LOST THE TAX AUDIT ISSUE OF PARAMOUNT IMPORTANCE

ICAI- WHERE & WHY WE LOST THE TAX AUDIT ISSUE OF PARAMOUNT IMPORTANCE?

 

In the year 2011-12, An issue of Conduct of Excessive Tax audits was surfaced at the various levels of the Institute in its committees and council. There was a proper response to the representation made to CBDT by one of committee of ICAI .It simply sought  tax audit data based on returns e-filed during the year 2010-11. The Institute duly received the data relating to number of tax audits conducted by the members along with the membership numbers of the tax auditors and that while processing the data provided by the Income-tax Department, it was observed that a number of tax audits reports were filed by the assessee by quoting fake membership details of the Chartered Accountants. Such as

 

 

a)      696 membership numbers (1385 tax audits conducted) quoted by the assessees in e-returns do not subsist at all.

b)      420 membership numbers belong to deceased members. Among the same 369 members passed away before 31.3.2011. The number of audits conducted by them is 3621. Further, 51 members passed away after the said date. 2287 tax audits have been uploaded in respect of such 51 deceased members. In respect of 51 members, there is a possibility that they might have died after signing the audit report.

 

Further it was pointed out that

 

1. Approx. 9,500 Members conducted tax audits in excess of specified limit of 45

 2.Approx. 2,700 Members with NO COP as on 21.01.2012 conducted Tax Audits.

3. Approx.  736 Members holding Part time COP conducted Tax Audits.

 

The shocking findings by ICAI and submission of such findings with CBDT, It shocked CBDT too. CBDT didn’t waste their time and started their own comfort regime of digitalization of submission of Tax Audit reports. Now Tax audit report digitally signed by the tax auditor shall be allowed to be uploaded along with the return of income, But the billion dollar question is what we have done to investigate and to take action against those who are offenders in such cases. It is quite possible that cases where No COP is there or part time COP is there, their names and membership numbers have been misused by the offenders.

 

Those who are honest to their professional commitments are the victims because of these offenders act. The victim are having their legitimate right to receive compensation from the offenders .The  offenders or third parties responsible for their behavior should, where appropriate, make fair restitution to victims. Such restitution does include the restoration of rights of Tax Audits. Such powers are vest with the council only and unfortunately, there was no discussion at all in the council over the subject. If the intention of Council Members is to ignore the same because of vote bank, I feel history will not forgive them for their conduct.

 

Why our Direct Taxes Committee is silent over the issue?

 

CA AMRESH VASHISHT