CA Sandeep Kanoi

ICAI has in its Pre-Budget Memorandum Presented to Ministry of Finance suggested that porposed changes in Definition of the term “accountant” in the Direct Taxes Code, 2013 are not required and claimed that ICAI is a premier body formed by MCA only to train chartered accountants to gain expertise in accounting and auditing ICAI. There is much more which can be elaborated like difference in the focus of the syllabi on the basis of which expertise is tested, effective steps taken by ICAI to ensure the quality of audit, guidance provided by ICAI in the field of auditing and accounting and the like. However, it is felt that the very fact that the mother Act itself does not allow the Cost Accountants and Company Secretary to conduct audit is good enough ground to convince one that the definition of “Accountant” does not require any change.

Please find below the Justification and suggestion submitted by ICAI to Government of India against the porpsed change in Definition of the term “accountant” in the Direct Taxes Code, 2013 :-

ICAI Suggestion on Proposed Definition of ‘Accountant’ in Direct Taxes Code, 2013 in Pre-Budget Memorandum 2014

 

Section Issues/Justification Suggestion
Definition of the term “accountant” in the Direct Taxes Code, 2013 

The Institute of Chartered Accountants of India (ICAI) is a statutory body established by the Chartered Accountants Act, 1949 for the regulation of the profession of Chartered Accountants in India exclusively form to regulate in the matter of accounts on audit and its professionals. The ICAI has achieved recognition as the premier accounting body in India and today it is the second largest accounting body in the world.

However, the proposed definition of “Accountant” under clause 320(2) of the Direct Taxes Code, 2013 which includes the “Cost Accountants” and “Company Secretaries” has been a cause of major concern to the entire profession. Before the Code enacts into a Bill and then law of the land, we would like to place on record our anguish and concern not only for the profession but for the country as a whole since issuance of audit certificates by persons who have not authorized to do so by the Acts of Parliament.

With regard to the definition of the term “Accountant” in the Direct Taxes Code Bill, 2010, the Standing Committee had made the following observations and had suggested widening of the definition of the term “Accountant” on the request made by ICSI and ICWAI:

“17.9 The Committee observed that the Ministry’s reasoning for non-inclusion of related professionals in the definition of accountant is a very strict construction of the term. In the view of the Committee, the suggested amendment may provide the Small and Medium Enterprises (SMEs) a wider and cost effective scope for selection of   professionals and will be an important initiative towards simplified tax compliance regime. The Ministry may therefore re-consider the suggestion to widen the scope of the definition of “accountant”.

Observations of the Ministry of Finance

Although, the Institute of Cost Accountants and Institute of Company Secretaries have suggested inclusion of terms “Cost Accountant” and “Company Secretary” in the definition of “accountant”, the Ministry of Finance had not accepted their suggestion on the ground that “an accountant for the purposes of tax matters is required to deal with all financial matters and audit all financial ledgers, books, records and statements of a company or firm etc whereas a cost accountant deals primarily with estimates of cost for projects and monitoring the project to ensure that these are within the budget. Therefore, a cost accountant may not have the expertise to deal with all the financial statements and matters.

Further, the question here is not of giving privilege to any particular The Institute of Chartered Accountants of India profession rather the most suited profession for dealing with the matters relating to direct taxes has to be assigned the work. Accordingly, the suggestion is not acceptable.

Under clause 304(3) (F) of the DTC, the Board may prescribe any person with specified educational qualification to act as an authorized representative. The same procedure is followed under the current Act. Accordingly, this will be considered at the time of framing of subordinate legislation.”

As per the Report of the Standing Committee on Finance on Direct Taxes Code Bill, 2010 the Ministry of Finance had protested this change. We, by way of our letter dated 16-05-2012 had appreciated the stand taken by the Ministry of Finance in this regard. A copy of the same is enclosed for your reference. Since the provisions of the proposed Direct Taxes Code are not in alignment with the view of the Ministry of Finance, it is difficult to understand the reason of change of opinion of the Ministry of Finance.

Recognization of all three professionals by the Companies Act, 2013

Audit of Financial Accounts is the exclusive domain of chartered accountants is a well known fact and is even recognized by the Companies Act, 2013(as also the erstwhile Act of 1956). Section 141(1) clearly provides that a person shall be eligible for appointment as an auditor of a company only if he is a chartered accountant. While considering the domains of other two professionals, section 143(14) of the said Act also provides that the provisions of section 143 shall mutatis mutandis apply to:

(a) the cost accountant in practice conducting cost audit under section 148; or

(b) the company secretary in practice conducting secretarial audit under section 204.

It may be noted that the Ministry of Corporate affairs is very clear about the domains of all the three professionals and has, thus, assigned the right task to the right professional who are suppose to carry out the assigned task in a professional manner.

Implications of Conduct of audit by non-chartered accountants

Conducting of tax audit by non-chartered accountants having limited knowledge of the principles of accounting, auditing and tax procedures thereof would result into complexities not only for the assessees as also for the Government including but not limited to inaccurate computation of income, leading to leakage of revenue. While processing the data provided by the Income-tax Department in respect of tax audits conducted by chartered accountants, it was observed that a number of tax audit reports were filed by the assessees by quoting wrong membership details of the Chartered Accountants. The fact of alleged misuse of membership details of chartered accountants was also reported to CBDT vide letter no. DTC/2011-12/Rep-07, dated 16th December, 2011 and subsequently vide Letter no. DTC/2012-13/Rep-09, dated 15th June, 2012. As per our knowledge, action has been taken against those assesses who avoided getting their accounts audited and tried escape tax. The Ministry may be very well aware of the tentative figure of the involved revenue leakage. Such cases are a LIVE examples of the implications of getting the tax audit done by “Cost Accountants” and “Company Secretaries” who do not have expertise to do the same and are thus as good as fake audits.

Difference in scope of service of CA, CS and CWA

a) Section 2(2) of the Chartered Accountants Act, 1949 permits a chartered Accountant to conduct a financial audit or issue certificates based on financials of an assessee.

b) Section 2(2) of the Cost and Works Accountant Act,1959 restricts the domain of services of cost accountant to services relating to costing or auditing of cost accounting and related statements only. A Cost Accountant is in no case eligible to conduct a financial audit. The argument that such activities can be included in the residuary clause also will not hold good since residuary clause cannot go beyond the main function like a doctor cannot be called to do the job of an advocate.

c) The Company Secretaries Act, 1980 restricts the domain of services of Company Secretary to secretarial services relating to Companies only. A Company Secretary is in no case eligible to conduct a financial audit or issue certificates based on accounts of a company or any other assessee. In fact the Income tax Act covers a wide range of assessees other than companies also like individuals, HUF, firms, Co-operative societies and so on.

There is no doubt that ICAI is a premier body formed by MCA only to train chartered accountants to gain expertise in accounting and auditing ICAI. There is much more which can be elaborated like difference in the focus of the syllabi on the basis of which expertise is tested, effective steps taken by ICAI to ensure the quality of audit, guidance provided by ICAI in the field of auditing and accounting and the like. However, it is felt that the very fact that the mother Act itself does not allow the Cost Accountants and Company Secretary to conduct audit is good enough ground to convince one that the definition of “Accountant” does not require any change.

 

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0 responses to “ICAI – Definition of Accountant do not require Changes”

  1. Shyamal Krishna Roy says:

    Audit comment : Cashier should not prepare/approve voucher. Similarly CA should not do tax audit. It will be more transparent. People should understand. Thats all.

  2. MANDEEP SINGH says:

    I 100% agree with tax guru. But in present time legal profession suffering lot due to trespass in Advocates filed by other professionals & persons.If BCI not seriously take up the matter than it can be major setback for Advocate profession.

  3. Taxxguru says:

    लगता हैं कि Legal Profession, Advocates, Lawyers को किसीभी तरह से बदमान करना, उनके बारेमें अनापशनाप लिखना, कोर्ट arguments और कोर्ट प्रोसीडिंग्स के बारेमें गलत भ्रांतियां फैलाना यह Non-Legal Professionals का main motto हो गया है। उसके अनेक कारण हो सकते हैं :

    (१) चूँकि सभी Non-Legal Professionals गैर कानूनी एवंम unethical तौर से Legal Professional areas में काम करते हैं और उन्हें कोर्ट प्रोसीडिंग्स में भाग लेनेका मौका नहीं मिलता। असली skill तो Advocacy में, Analytical Court Argument & cross examination & verification में हैं ना की back office work में।

    (२) आम तौर पर Non-Legal Profession के काम/practice एक तरहसे उत्साहवर्धक नहीं होता, पब्लिक अपीयरेंस एवं मिडिया में किसीभी तरहसे चर्चा नहीं होती, पब्लिक इंटरेस्ट और पब्लिक इन्वॉल्वमेंट नहीं होता,

    (३) आम तौर पर Lawyers, Doctors, Engg., Businessman या फिर कला से संबंधित व्यक्तियो पर ही Films बनती है, मीडिया कवरेज मिलता है, Interviews लिए जाते है, इसलिए हो सकता है बाकि व्यक्तियों को या प्रोफेशनल्स को inferiority महसूस होती होगी क्यों की उन्हें यह सब नहीं मिलता। contd….

  4. MANDEEP SINGH says:

    I fully agree with TAX GURU & Sh. BSK RAO. If we do work in our own area with interest than we can produce better quality in work done for assessee or government to increase genuine tax base.

    1)ADVOCATES HAVE EXPERTISE IN LAW.
    2) CA’s HAVE EXPERTISE IN ACCOUNTANCY.

    THEN THERE IS NO NEED OF SECTIONS AS LIKE 288(2) in Income Tax act. Otherwise DTC bill will be good option. All professional should be equally treated. Otherwise illegal interference in ADVOCATE profession should be restrict by omit section 288(2) from income tax & same kind sections in other acts.

  5. Taxxguru says:

    @Sathyanarayana
    (1) No one is jealous on ICAI (Financial). But it seems from the almost all post by ICAI (Financial) fraternity that they are seriously jealous on the Legal Professionals (Advocates & Lawyers) because of their noble status in the whole society from grass root level, villages, city, and metros to whole Country. Accountants seems to be seriously sick minded because their wrong deeds are now bounce backing on themselves & they are feeling that what we have encroached un-ethically on the practice area of Legal Professionals are now showing their right place to write basic job work of writing books of accounts.

    (2) Most of the people think that accounting job workers are meant for writing books of accounts only & they are not Legal Professional at all having expertise in any Law which prevails in the country. Therefore first question is that why non-Legal Professionals are so much eager to involve in the practice of Legal Profession which is prerogative of Advocates/ Lawyers only.

    (3) As per latest Hon’ble Supreme Court & Madras High Court Judgement non-Legal professionals are subject to legal action if they involve in the Legal Practice (Litigious as well as non-litigious) . Now all authorities/department officials must take stringent steps to restrict & prevent non-Legal Professionals from representing before them in litigious as well as non-litigious matter.

    (4) Finance Ministry must delete representation section in the purview of Hon’ble Supreme Court & Madras High Court Judgement because only Advocates have prerogative power to represent in litigious as well as non-litigious matter.

    (5) It is kind suggestion to accounting fraternity that please stick to your profession (as Public Accountant) only for which the Act was passed by the Hon’ble Parliament. Do not encroach other professionals (Legal, Costing, Management etc) area unethically & illegally.

  6. B.S.K.RAO says:

    LEARNED OFFICIALS IN FINANCE MINISTERY SHOULD CONSIDER FOLLOWING POINTS TO DECIDE ABOUT WHO HAS TO CONDUCT AUDIT IN VARIOUS STATUTE:-

    (1) Subject Matter of Audit & its scope
    (2) Purpose & Motto of Audit
    (3) Who are all authorised to give compliance on behalf of assessees

    Ultimatly such power granted to persons should not trouble the assessee to approach more than one tax professionals to give compliance.

  7. B.S.K.RAO says:

    AUDIT IN COMPANIES ACT IS A COST, FINANCIAL & MANAGEMENT ACCOUNTS AUDIT. HERE CMAS BE ALLOWED TO FURNISH THE SAME. WHEREAS IN INCOME-TAX ACT, IT IS A TAX LAW AUDIT. THEREFORE ALL PERSONS AUTHORISED TO PREPARE RETURN UNDER RULE 12A READ WITH SECTION 288(2) OF INCOME-TAX ACT, BE ALLOWED TO FURNISH TAX LAW AUDIT REPORT U/S 44AB. HERE MORE STRESS GIVEN TO INTERPRETATION OF LAW.

  8. K.MUKAMBIKA says:

    OF COURSE AUDIT IN COMPANIES ACT IS A COST, FINANCIAL & MANAGEMENT ACCOUNTS AUDIT (ANNUAL REPORT PRESUMED TO BE UNDERSTANDABLE BY PUBLIC INDICATES THE SAME). HERE CAS & CMAS BE ALLOWED. WHEREAS IN INCOME-TAX ACT AND DTC, IT IS TAX LAW AUDIT. THEREFORE ALL PERSONS AUTHORISED TO PREPARE RETURN UNDER RULE 12A BE ALLOWED TO FURNISH TAX LAW AUDIT REPORT. HERE MORE STRESS GIVEN TO INTERPRETATION OF LAW

  9. MANDEEP SINGH says:

    AUDIT U/S 44AB IS A BIG OBSTACLE TO RUN SMOOTHLY ANY BUSINESS. I AM ALSO DO TRADING OF SHARES THROUGH INDIA INFOLINE COMPANY. TURNOVER IN A DAY NEAR ABOUT 1 LACK HARDLY PROFIT RS. 500 & SOMETIMES WEAR LOSS FROM TRADING.
    BUT AUDIT PROVISIONS U/S 44AB ARE BIG OBSTACLE TO WIDEN TAX BASE. GOVT. REGULARLY WEAR huge Security Transaction Tax Loss & Share trading companies are loosing brokerage due section 44AB. If brokerage of companies will be reduced & it will be DIRECT TAX LOSS TO GOVERNMENT.

    I CAN’T FREELY SHARE TRADING DUE TO SECTION 44AB & LIKE ME NUMBER OF TRADERS WHO ARE NOT TRADING FREELY DUE TO SECTION 44AB, reason they didn’t involve themselves in complicated provisions of SECTION 44AB.

    DUE TO THAT GOVERNMENT LOOSE HUGE STT & INCOME TAX.

  10. NABANEETA MUKHERJEE says:

    The ICWAI is a member of the International Federation of Accountants (IFAC), The Confederation of Asian and Pacific accountants (CAPA), and the South Asian Federation of Accountants (SAFE). In IFAC, The ICWAI is represented in the Financial and Management Accounting Committee and in CAPA in the Executive committee. The ICWAI as a leader in the field in the south Asian Region is also imparting training to accountants from overseas countries. BUT IN INDIA ICWAI MEMBER (CMA) IS NOT TREATED AS ACCOUNTANT. IT IS NOT ONLY RIDICULAS BUT A NATIONAL SHAME.

  11. MANDEEP SINGH says:

    Filling of statutory forms under income tax act 1961 is a LEGAL OPINION on income tax matters. It is not ” PRACTICE OF ACCOUNTANCY”.

    FORM-3CD is a legal opinion on income tax laws. Only advocates are authorized to give legal opinion. Filling of form 3CD BY CA’s is not correct should be immediate restricted by Ministry of finance.

  12. K.MUKAMBIKA says:

    I HERE BELOW FURNISH NAME & ADDRESS OF PERSON IN MINISTRY OF FINANCE TO WHOM SECTIO 80 CPC NOTICE HAS TO BE SERVED ABOUT PRACTICE OF INCOME-TAX LAW BY ACCOUNTANTS

    SMT.RASHMITA JHA,
    DIRECTOR (V&L),
    CBDT, ROOM NO.253A,
    NORTH BLOCK,
    NEW DELHI-110001

    Tel No.: 011-23092786
    E-Mail : umasingh@nic.in

    I HOPE THAT MY ADVOCATE FRIENDS MAKE USE OF THE ABOVE INFORMATION TO SERVE SECTION 80 CPC NOTICE TO MINISTRY OF FINANCE, GOVT. OF INDIA IN THE ABOVE MATTER

  13. K.MUKAMBIKA says:

    BASIC CONCEPT OF AUTHORISING “ACCOUNTANT” TO CONDUCT “TAX LAW AUDIT” BOTH IN INCOME-TAX ACT AND DIRECT TAXES CODE AMOUNTS TO CONTRAVENTION LIABLE FOR ACTION UNDER ARTICLE 129 READ WITH ARTICLE 142(2) OF INDIAN CONSTITUION IN VIEW OF LATEST SC VERDICT IN THE CASE OF BAR COUNCIL OF INDIA VS A.K.BALAJI READ WITH HC VERDICT A.K.BALAJI VS GOVT. OF INDIA. INCOME-TAX ACT/DIRECT TAXES CODE BEING “LAW”, ADVOCATES ALONE ARE ENTITLED TO PRACTICE, PLEAD AND ACT BEFORE THE ASSESSING OFFICERS OF TAX DEPTT.. ON DATE “PRACTICE OF ALL INDIAN TAXATION LAW” SQUARELY FALL WITHIN THE PERVIEW OF NON-LITIGIOUS MATTER AND PRACTICE OF THE SAME BY NON-ADVOCATES HAS BEEN SUBJECT TO REVIEW AS PER INTERIM ORDER OF ABOVE MENTIONED SUPREME COURT VERDICT. THEREFORE I SUGGEST MY ADVOCATE FRIENDS TO ISSUE SECTION 80 CPC NOTICE TO MINISTRY OF FINANCE, GOVT. OF INDIA, IN THE ABOVE MATTER.

  14. SANJAY KISHOR GUPTA says:

    Chartered Institute President Statements is unprofessional and selfish and shall be condemned and should be taken to higher authorities like MCA & Ministry of Finance. How the CA institute can raise question mark on the professional expertise of the other two professional institutes.
    CA’S OVER A PERIOD HAVE COME TO BE KNOWN AS BROKERS BETWEEN INCOME TAX OFFICIALS AND THE ASSESSES. Recently CBI busted a sensational bribery scandal at Kanpur dated 05/06/2014 involving high profile income Tax officials and a Chartered Accountant Mr. Anil Jaiswal in connection with the case. All are arrested. So it is proved in India each and every scandal there is a chartered Accountant.

  15. Sudipta Majumdar says:

    In West Bengal Sarada Scam Rs.4500 crores involving some Auditors ( Source Ananda Bazar Patrika 07/06/2014). So it is proved chartered Accountants are the most corrupted Auditors and they are the only responsible for huge revenue lickage of the government.

  16. CMA NABANEETA MUKHERJEE says:

    Mr. K Raghu’s statement is unprofessional and shall be condemned and should be taken to higher authorities like MCA & MINISTRY OF FINANCE.How the CA institute can raise question mark on the Professional expertise of the other two professional institute.Since introduction of Tax Audit by only CA’s in 1984, our esteemed Central Govt. has lost huge revenue on account of Income-Tax. Recently CBI busted a sensational bribery scandal at Kanpur dated 05/06/2014 involving high profile income tax officials and a Chartered Accountant named ANIL JAISWAL

  17. Sathyanarayana says:

    Dear All,

    The people who are jealous on ICAI are either not able to pass CA exams or they have some accounting practice got from their father or some relatives who were CAs are making such statements.

    Tax returns can be prepared by any one who is having knowledge how to fill the form. The TRPs scheme is introduced by the earlier FM is a failure. Hence why there should be separate law like tax practitioner bill when the country is having numerous laws passed by the government.

    Accusing ICAI will not help, the practitioner who prepares a tax return and represents before tax authorities should have knowledge of business, accounting, tax laws, establish client relationship and more than that he should be a well wisher of the business of the client. Advocates are not meant for this. Advocates are experts in litigation and hence they cannot solve the problem. They can create litigation, threaten the client by sending notices destroy the businesses by litigation. If there is no litigation their life is stake and hence they are now litigating with ICAI.

  18. K.MUKAMBIKA says:

    Central Board of Direct Taxes failed to furnish total of Section Wise Wrong claims reported in Tax Audit Report furnished by CA’s in respect of return filed for the Asst. Year 2013-14 in ITR-4 & ITR-5, very purpose of uploading the same to conclude quality assessment.

    Hence, not only learned officials in Ministry of Finance, even common man will conclude that since 1984 till date, members of so called Institute of Chartered Accountants of India possessing core competence & expertise have furnished FAKE AUDIT REPORTS.

  19. K.MUKAMBIKA says:

    TO,

    MINISTRY OF FINANCE,
    GOVT. OF INDIA,

    Both in Income-Tax Act & Direct Taxes Code “Accountant” is authorized to conduct Tax Audit. There is no specification as to Financial Accountant or Cost & Management Accountant. Therefore, I am of the strong view that CMA’s squarely fall within the definition of “Accountant”. Adding to this, now CMA’s are authorized to work in the Area of Management Accounts also. Management Accounts is nothing but application of Cash Flow Statement & Ratio Analysis on Cost & Financial Accounts. This being the case, it has to be presumed that CMA’s are also authorized to work in the area of Financial Accounts. Therefore, objection raised by ICAI (Financials) finds no relevance.

    I hope that ICAI (Cost & Management) will give above defense against objection raised by ICAI (Financials) on the issue of expanding the definition of “Accountant” in DTC.

  20. B.S.K.RAO says:

    WHY TAX PRACTITIONERS BILL REQUIRED FOR INDIA

    BELOW ARE THE ACCOUNTING BODIES EXISTING WORLD OVER ON DATE, IN SPITE OF THIS, THEY HAVE SEPARATE BODY FOR TAX PROFESSIONALS-REASON BEING, SAME SITUATION ARISEN, SIMILAR TO THE LATEST SUPREME COURT VERDICT IN THE CASE OF BAR COUNCIL OF INDIA Vs A.K.BALAJI ABOUT PRACTICE OF LAW. MORE OVER EACH PROFESSIONAL BODY MENTIONED BELOW POSSESS MEMBERS IN THE RANGE OF 1,00,000 TO 5,00,000. IN FACT, IN ALL BELOW MENTIONED COUNTRY’S POPULATION IS LESS & EXISTING MEMBERS ARE SUFFICIENT TO MEET THE REQUIREMENT OF THEIR ECONOMY. INDIAN POSITION IS DIFFERENT, INDIA IS HIGHLY POPULATED, EXISTING 65,570 PRACTICING CA’S DOES NOT MEET THE REQUIREMENT OF OUR COUNTRY. THEREFORE, INDIAN ECONOMY NEEDS TAX PRACTITIONERS BILL TO GENERATE TAX PROFESSIONALS TO WIDEN GENUINE TAX BASE OF ASSESSEES.

    AICPA (USA), ACCA (UK), CICA(Cannada), CGA (Canada), CICMA(Nigeria), CIMA(UK),CIPFA (UK), CPA (Australia), GCPAS (Germany), ICIA(Canada), HKICP (Hong Kong), ICAA (Australia), ICAEW (UK), ICAI (Ireland), ICAI (India), ICAS (UK), ICMAP (Pakistan), IFA (UK), MIA(Malaysia), NZICA (New Zealand), PICPA (Philippines), SAICA (South Africa), MIA(Malta)

  21. B.S.K.RAO says:

    DEAR ALL FRIENDS,

    In latest Supreme Court verdict in the case of Bar Council of India Vs A.K.Balaji, it was clearly held that Advocates alone are entitled to practice the profession on law both in litigious & non-litigious matter. Therefore, appearance clause in all Indian taxation statute require deletion. This may happen any day in future.

    Therefore, my ultimate suggestion is as under:-

    Our Central Govt. should come out with subbordinate legislation, introduce Tax Practitioners Bill covering all tax law professionals, in India also. This is prevailing in other country’s throughout the world. Such Tax Practitioners Bill should be introduced with pramble stating that “Majority of person practing tax law in India are Non-Advocates, in order to protect them & also in the interest of Govt. revenue, this Tax Practitioners Bill has been introduced”. Then such Tax Practitiners Bill can not be struck down in view of verdict in the case of Bar Councial of India Vs A.K.Balaji.

    Among Legal Practitioners, Cost & Management Accountants, Company Secretaries, Chareterd Accountants and Income-Tax Practitioners, who wants to practice tax law in India, should mandatory seek registration under Tax Practitioners Law, whatever their parent body say is immeterial & TPB should recognises the qualifications acquired by all five class of tax professionals mentioned above.

    If this happens in India, members of TPB can file vakalatnam even before Supreme Court of India. But in Supreme Court, Senior Advocates should be hired for arguments. Every thing depends on how Tax Practitioners Bill is going to be drafted.

    POPULATION WISE INDIA IS A LARGE COUNTRY, GOVT. CAN NOT RELAY ON ONE PROFESSIONAL BODY FOR SEEKING COMPLIANCE UNDER INDIAN TAXTION LAWS. TAX PRACTIONERS BILL IS WELL SUITED TO INDIA, REQUIRED FOR INDIA AND NEED OF THE HOUR. I HOPE FINANCE MINISTRY WILL CONSIDER THIS SUGGESTION OF MINE WORKING IN THE INTEREST OF ALL TAX PROFESSIONALS AND GOVT. REVENUE SINCE 2001.

  22. Taxxguru says:

    What Hon’ble Bar Council of India is doing for their Lawyer members’ professional interest who are in Tax Practice???? Isn’t it their responsibility & duty to represent before various authority & ministries (especially Finance Ministry & Ministry of Corporate Affairs) to argue for more certification power to their members????
    Now time have come to act more by Bar Council of India to make possible all types of certification work for the Lawyers in Legal Practice which is the prerogative power of Advocates only.
    Further It is also time to restrict & penalize non-Legal Professionals from doing Legal Practice by unauthorized & unethical way.

  23. B.S.K.RAO says:

    DEAR ALL TAX LAWYERS OF INDIA,

    THERE WAS NO ASSOCIATION OF ONLY TAX LAWYERS AT NATIONAL LEVEL, RECENTLY WE HAVE FORMED AN ASSOCIATION OF TAX LAWYERS REPRESENTING TAX LAWYERS FROM EACH STATE IN INDIA, HAVING ITS REGISTERED OFFICE AT # 30, LAWYERS CHAMBERS, DEEN DAYAL UPADHYAY MARG, NEW DELHI-110002. THE MAIN OBJECTS OF THE ASSOCIATION IS TO PROMOTE TAX LAW REFORMS & TO PROMOTE COMMON INTEREST OF ADVOCATES PRACTICING TAX LAW IN INDIA. THIS INFORMATION HAS BEEN FURNISHED TO ENABLE ALL TAX LAWYERS OF INDIA TO SEEK MEMBERSHIP OF THE ASSOCIATION.

  24. B.S.K.RAO says:

    WHEN ICAI (FINANCIALS) MAKE WRONG & SELFISH REPRESENTATION TO MINISTRY OF FINANCE, WHAT ICSI & ICAI (COST & MANAGEMENT) ARE DOING NOW. I WANT TO KNOW THAT THEY ARE ALIVE OR NOT.

  25. B.S.K.RAO says:

    ARGUMENTS IN FAVOUR OF EXPANDING THE DEFINITION OF ACCOUNTANT

    11. Because of ceiling on tax audit fixed by ICAI (Financials) irrespective of coporates & non-corporates, CA’s prefer to make best combination to yield high revenue. This affects non-corporate assesses.

    12. On date majority of 65,570 practicing CA’s spread throughout INDIA have crossed the age of 50 years. Non-CAs who entered tax profession in 1980’s will all eliminate in another 10 years. Ie, in another 10 years, Govt. will hardly get Tax Professionals to support voluntary compliance. Therefore, it is right time that Govt. took the decision of expanding the definition of accountant to attract Non-CA’s to enter tax profession.

    13. Till mandatory upload of tax audit report Non-CAs handling tax audit cases were some how managing to file the return. Because of mandatory upload, CA’s will not sign for more than the tax audit ceiling fixed. This is the crux of the matter, strong opposition is coming from Non-CA’s throughout India.

    14. All CA’s will not sign for work done by Non-CAs, only around 20% of PCA’s sign for work done by Non-CA’s. Because of ceiling, even CA’s handling tax audit cases more than the ceiling fixed are roaming around in search of empty slots of CA Signature during due dates. This is special situation prevailing only in India.

    15. When CA’s conduct tax audit for revenue, AO will not get the authority to scrutinise assessees records once again. In scrutiny proceedings, action of AO to make additions to the total income should be restricted to wrong claims reported by CA in tax audit report. Even holding the AO is capable of ascertaining wrong claims on audit of assesses records in scrutiny proceeding, he should invoke special audit clause and see that such wrong claims are reported in special audit report & make additions to the total income. Because, AO is not CA’s, revenue reposed confidence only on CA’s to report wrong claims as per CBDT circular for introduction of tax audit.

    16…….continue…..in…..comments

  26. B.S.K.RAO says:

    ARGUMENTS IN FAVOUR OF EXPANDING THE DEFINITION OF ACCOUNTANT

    1. Voluntary compliance in Indian taxation laws indirectly regulated by one professional body ICAI (Financials), due to expansion of demand & supply gap of CA’s with the motto of providing full employment to existing members.

    2. Till date there is no single instance of utilization of tax audit report by the Deptt. to conclude quality assessment since introduction of tax audit in 1984 by only CA’s

    3. Non-CA Tax Professional who are also authorized to prepare return of income have to roam around in search of empty slots of CA Signature during due date for filing return of income in the case of their clients. This situation prevailing in India only.

    4. Since introduction of Tax Audit in 1984 by only CA’s resulting in 46 Plus CA Certificates on date, new Non-CAs are not entering tax profession to support voluntary compliance & Govt. has to relay only on output of members given by ICAI (Financials) for seeking compliance.

    5. Practically, both the job of Audit & Income-Tax return preparation has to be done by one person. Assessee can not engage more than one tax professional just for filing returns under Income-Tax Act.

    6. Name itself indicates Tax Law Audit, therefore it has to be conducted by person specialized in Income-Tax law wherein wrong claims on interpreting Income-Tax Law, State VAT Act, PF Act, Bonus Act, ESI Act, Central Excise & Service Tax etc are required to be reported.

    7. As per Tax Audit Data & Revenue Admission Data provided by CPC, Bangalore there was huge loss of revenue to Govt. since 1984 because of vesting the power of tax audit only on Chartered Accountants.

    8. Below are the NO. of PCA provided by DIT(S) & ICAI (Financials):-
    100 thousnad provided by ICAI
    65 thousand provided by DIT(S)
    Here question arises that what remaining 35 thousand PCA’s are doing,
    they have not signed single TAR ?
    Monopoly & Scarcity is the major hurdle for voluntary compliance

    9. ICAI (Financials) with the motto that all members should get bank branch audits regulate the output of members. Of course this action of ICAI (Financials) is in the interest of their members, but this action strongly go’s against the revenue due to monopoly of authority.

    10. Professional ethics of ICAI (Financials) takes away the independency of assessses. Ex: If assesse wants to change the auditor, new auditor should take permission from earlier auditor. This is applicable only if both are CA’s.

    11. Continue……….in……..next comment

  27. CMA Ramlakhan Ahirwar says:

    As per ICA Act- 2013 Eligibility to conduct Internal audit is very competitive , let come CMA in Internal audit,,

  28. R.Subramanian says:

    why only Chartered Accountants are authorized to conduct Tax Audit U/s 44AB of Income-Tax Act and enjoy monopoly of authority, causing strict hurdle for voluntary compliance.On careful study of Section 288(2) of Income-Tax Act, 1961 read with Rule 12A of Income-Tax Rules, 1962, it has to be presumed that all five class of person’s viz. Legal Practitioners, Chartered Accountants, Cost & Management Accountants, Company Secretaries & Income-Tax Practitioners possess knowledge of Section 145 read with 14 Accounting Standards of CBDT, required for Income-Tax Practice. Because certain qualification has been fixed in Income-Tax Act for these five class of persons. Further, Accounting Standard framed by ICAI (Financials) & IFRS not required for Income-Tax Practice. Here the question is, when such other four class of Non-CA Tax Professionals are authorized to prepare return under Rule 12A of Income-Tax Rules, there is no justification to prohibit them for issue of Certificates/Reports in Income-Tax Act.I AM OF THE STRONG OPINION, THAT ICAI (FINANCIALS) IS AGAIN TRYING TO KEEP THE GOVT. IN DARK ROOM” IN THE ABOVE REPRESENTATION. If Govt. consider the representation of ICAI (Financials), definitely TAX BASE IN INDIA CAN NOT BE WIDENED.

  29. MANDEEP SINGH says:

    My Chartered accountant friends
    I am posting here quality of work done by CA’s in their audits u/s 44ab. If ICAI is talking about such expertise to audit then I strongly in favour of there is no need such expertise of CA,s to widen tax base.

    781 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    772 AUDITED U/S 44AB BY CA
    9 NON AUDITED CASE
    241 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    229 AUDITED U/S 44AB BY CA
    12 NON AUDITED CASE
    200 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    200 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    185 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    185 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    181 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    181 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    88 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    87 AUDITED U/S 44AB BY CA
    1 NON AUDITED CASE
    159 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    159 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    155 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    155 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    148 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    148 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    127 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    127 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    121 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    121 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    120 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
    120 AUDITED U/S 44AB BY CA
    0 NON AUDITED CASE
    TOTAL U/S 44AB NON AUDITED
    2506 2484 22
    sir if CA’s talking of such kind quality work then their is no need such kinds quality for widen our country revenue. This information from various INCOME TAX DEPARTMENTS FROM INDIA.I have same kind information near about 2000 offices all over india. which is not possible to publish here.
    ICAI SHOULD BE SINCERE TO WIDEN COUNTRY REVENUE BY LEAVING BEHIND ITS OWN SELFISH INTERESTS.

  30. CMA NABANEETA MUKHERJEE says:

    We all known that in India only two professionals are recognized as Accountant under various National and State Acts. These two professionals are the Chartered Accountants and the Cost Accountants.

    The following points are remember:

    1) It is noted that Section 14A & Section 14AA of the Central Excise Act 1944 dealing with Special Audit, treated chartered Accountants and Cost Accountants at par

    2) Value Added Tax (VAT) Act of various State empowered Chartered Accountants/ Cost Accountants to conduct VAT Audit.

    3) State Bank of India (SBI) India’s largest Bank empanelled Chartered Accountant/ Cost Accountants to conduct stock Audit for their branches.

    4) Government Sector Units (PSU’s) recognize Chartered Accountants /Cost Accountants as Internal Auditors.

    In view of the above it is strongly suggested that the Cost Accountants have been rightly recognized as ‘Accountant’ under the DTC.

  31. B.S.K.RAO says:

    Strenuous efforts of Institute of Chartered Accountants of India to expand the demand & supply gap of Chartered Accountants since 1984, with the motto of providing full employment to 65,570 practicing Chartered Accountants spread throughout India, have increased the cost of voluntary compliance of return filing in Non-Corporate Tax Audit cases under Income-Tax Act. ICAI is not even 1% concerned about India is very clear from this action. Therefore, Ministry of Finance should not consider the above representation of ICAI (Financials), only PROFESSIONAL BODY passed by an act of parliament.

  32. B.S.K.RAO says:

    1. Lot of irregularity, mischief, corrupt & fraudulent practice of ICAI has come to light recently (Madras HC Observed). This is all because of supremacy over audit given to ICAI in all Indian statute. Hence, it is prayed to amend Section 18(5) of The Chartered Accountants Act, 1949, so that accounts of ICAI should be audited by The Comptroller and Auditor General (CAG) of India under Article 149 of Indian Constitution. This is in the interest of public at large & need of the hour.

    2. Similar amendment should be brought in Section 18(5) of Cost and Works Accountants Act, 1959, Section 18(5) of The Company Secretaries Act, 1980 & Section 12(2) of Advocates Act, 1961 (Bar Council). To sum-up all the bodies passed by Acts of Parliaments should have their accounts audited by The Comptroller and Auditor General (CAG) of India under Article 149 of Indian Constitution. (Supreme authority for Audit under Article 148 of Indian Constitution).

    3. Similar clause has been inserted in Section 10(2) of proposed Legal Practitioners (Regulations & Maintenance of Standards in Professions, Protecting the Interest of Clients and Promoting the Rule of Law) Act, 2010 published in Ministry of Law & Justice website.

    I hope that Ministry of Corporate Affairs will consider my above genuine request in the larger interet of public.

  33. Dilip says:

    ICAI should not fear from ICWAI & ICSI.
    Let it be open for All for better competition.

  34. B.S.K.RAO says:

    In latest e-filing website of Income-Tax Deptt. only CA’s are treated as Tax Professionals with special login to upload CA Certificates (Impracticable procedure), without which Non-CA Tax Professional can not give compliance to the Deptt., if given his clients are under the risk of penal provision. These CA Certificates barricade support for voluntary compliance from Non-CA Tax Professionals & new Non-CA Tax Professionals are not entering tax profession on one hand and total number of practicing CA’s are not increasing on the other hand (Considering the output & death rate of practicing CA’s).

    In developed countries like Australia 70% to 80% of population are under tax net, whereas in India only 2% of population are under tax net. This is because of confining certification powers only to Chartered Accountants in Income-Tax Act, 1961 as discussed above. On date ample tax compliance work is there, but there is no required Tax Professionals to support voluntary compliance. I hope that Ministry of Finance will consider my above submissions & make necessary amendments to Income-Tax Act/Direct Taxes Code, keeping in mind that “more persons in the line of tax practice more revenue”.

  35. H. K. Jana says:

    In the present scenario, it is unacceptable that Cost Accountants or Company Secretaries does not have expertise to do the audits as stated above. In fact, in many cases Cost Accountants or Company Secretaries have better expertise than many Chartered Accountants. Therefore, there is nothing wrong in extending the definition of Accountant under the relevant Acts/ statutes.

  36. CLN REDDY says:

    WE completely endorse the views expressed by Sri.B.S.K Rao on the subject. It it is a part of tax regulatory process – verification( Tax Audit) and reporting as per the provisions/rules of the IT Act/ Rules and it is not difficult than Rocket science -which also has come to streets with children who trying the same as “tests” during holiday’s. So why not other related accountants.

  37. Rajendra says:

    ICWAI, name has been changed to “The Institute of Cost & Management Accountants of India” and the members got the power to work in the area of Management Accounts also and can re-designate themselves as ACMA/FCMA. Now, it is funny that both institutes passed by an Act of Parliament called by similar short name of “ICAI”. Of course syllabus is almost similar in all the three institutes called by different name of ICSI, ICWAI and ICAI.
    In view of the above amendment, Cost Accountants now possess wide power of working in the area of Cost Accounts, Financial Accounts & Management Accounts. And hence, Institute of Cost Accountants of India should be called full accounting body in India. Whereas, Chartered Accountants are restricted to work in the area of Financial Accounts only. This being the case, I do not understand why only Chartered Accountants are authorized to conduct Tax Audit U/s 44AB of Income-Tax Act and enjoy monopoly of authority, causing strict hurdle for voluntary compliance.
    – See more at: http://taxguru.in/chartered-accountant/icai-definition-accountant-require.html#sthash.Ly0TRM9W.dpuf

  38. Rajendra says:

    By The Cost and Works Accountants (Amendment) Act, 2011, name has been changed to “The Institute of Cost Accountants of India” and the members got the power to work in the area of Management Accounts also and can re-designate themselves as ACMA/FCMA. Now, it is funny that both institutes passed by an Act of Parliament called by similar short name of “ICAI”. Of course syllabus is almost similar in all the three institutes called by different name of ICSI, ICWAI and ICAI.
    In view of the above amendment, Cost Accountants now possess wide power of working in the area of Cost Accounts, Financial Accounts & Management Accounts. And hence, Institute of Cost Accountants of India should be called full accounting body in India. Whereas, Chartered Accountants are restricted to work in the area of Financial Accounts only. This being the case, I do not understand why only Chartered Accountants are authorized to conduct Tax Audit U/s 44AB of Income-Tax Act and enjoy monopoly of authority, causing strict hurdle for voluntary compliance.
    – See more at: http://taxguru.in/chartered-accountant/icai-definition-accountant-require.html#sthash.hDMw7vKa.dpuf

  39. S PRAKASH says:

    sir,
    the move to change the definition of Accountant in the Code is a welcome move.The audit by the CA has lost its importance due to the development of technology and its implementation in the audit and accounts.Most of the bank confirmation itself says that the “signature not required computer generated report”. The same followed in accounts of the companies in future.TRUST is the major mantra of the time.In spite of such specialized audit by the CA,s the corporate scams are being reported.The government should think of extending the AUDIT by AG’s even to the PRIVATE LIMITED COMPANIES.The individual and partnership firms should be kept out side the preview of the AUDIT. Liberalized policies should be framed to encourage the voluntary filing of returns and payment of self assessment taxes.More time of the officers should be used for survey of new cases.The ICAI should think in the larger interest of the nation not in the interest of the Institute and its members.The CA’s should think of the betterment of the Indian economy and creation of more and more employment.The number of recent RTI application has shown that the CA’s are short numbered to handle the large work load of the audit,accounts and taxation.More over the CA’s have better opportunity in large number of area other than the AUDIT.

  40. S PRAKASH says:

    sir,
    the move to change the definition of Accountant in the Code is a welcome move.The audit by the CA has lost its importance due to the development of technology and its implementation in the audit and accounts.Most of the bank confirmation itself says that the “signature not required computer generated report”. The same followed in accounts of the companies in future.TRUST is the major mantra of the time.In spite of such specialized audit by the CA,s the corporate scams are being reported.The government should think of extending the AUDIT by AG’s even to the PRIVATE LIMITED COMPANIES.The individual and partnership firms should be kept out side the preview of the AUDIT. Liberalized policies should be framed to encourage the voluntary filing of returns and payment of self assessment taxes.More time of the officers should be used for survey of new cases.The ICAI should not think in the larger interest of the nation not in the interest of the Institute and its members.The CA’s should think of the betterment of the Indian economy and creation of more and more employment.The number of recent RTI application has shown that the CA’s are short numbered to handle the large work load of the audit,accounts and taxation.More over the CA’s have better opportunity in large number of area other than the AUDIT.

  41. B.S.K.RAO says:

    Furnishing of Certificate & Reports in Income-Tax Act require both interpretation of facts & law. Interpretation of facts is not a tough job, but interpretation of law is a tough job. Practice of law is the Prerogative Power of Advocates in India. Whereas practice of Cost Accounts, Management Accounts & Financial Accounts are not the prerogative powers of respective professional body. Because, penalty has been prescribed U/s 45 of Advocates Act, 1961 for persons illegally practicing the Profession of Law. Under Indian Constitution CAG are the Auditors with wide powers, carrying out meaningful job.

  42. CA.A.ROY says:

    Why Institute of Chartered Accountants of India is feared about competition.In this open economy why Tax audit is limited to only CA’s domain,when CMA’s and CS’s are also equally equiped to do Tax audits and Tax related works.

  43. CA.A.ROY says:

    Why Institute of Chartered Accountants of India is feared about competition.In this open economy why Tax audit is limited to only CA’s domain,when CMA’s and CS’s are also equally equiped to do Tax audits and Tax related works.

  44. B.S.K.RAO says:

    ICAI (FINANCIALS) STATES IN THE ABOVE REPRESENTATION, THAT IT IS A MOTHER BODY, IF THAT SO THERE IS DUTY ON THE PART OF ICAI(FINANCIALS) TO SUPPORT CHILDRENS. IE, IT SHOULD SUPPORT ICAI (COST & MANAGEMENT), CS & BAR COUNCIL OF INDIA AND THEIR RESPECTIVE MEMBERS – THIS IS THE TRAIT OF INDIAN TRADITION

  45. K.MUKAMBIKA says:

    TO CBDT/DEPTT. OF REVENUE, MINISTRY OF FINANCE,

    In the span of these 30 years after introduction of tax audit in 1984, Income-Tax Deptt. could not get SECTION WISE WRONG CLAIMS in TAX AUDIT REPORT FORM NO.3CD issued by so called Chartered Accountants possessing core competence, knowledge & expertise in the line, to conclude QUALITY ASSESSMENT. The fact is evident from reply to RTI Application made before CBDT. Further in the course of scrutiny proceedings, assessing officers keep aside the Tax Audit Report furnished by CA’s. In this situation why 2nd opinion about granting such power of Tax Audit to other related Tax Professionals in DTC-2013. “I AM OF THE STRONG OPINION, THAT ICAI (FINANCIALS) IS AGAIN TRYING TO KEEP THE GOVT. IN DARK ROOM” IN THE ABOVE REPRESENTATION. If Govt. consider the representation of ICAI (Financials), definitely TAX BASE IN INDIA CAN NOT BE WIDENED.

  46. B.S.K.RAO says:

    ACTION OF LEARNED OFFICIALS IN FINANCE MINISTRY, COMMITEE ON DIRECT TAXES CODE, 2013 ABOUT EXPANDING THE DEFINITION OF ACCOUNTANT IS APPROPRIATE FOR THE FOLLOWING REASONS, I MIGHT HAVE USED THE WORD MOST APPROPRIATE, IF ALL PERSONS AUTHORISED TO PREPARE RETURN UNDER RULE 12A OF INCOME-TAX RULES, 1962 MIGHT HAVE INCLUDED IN THE DEFINITION OF “ACCOUNTNANT” IN DIRECT TAXES CODE-2013 :-

    On date, MAJORITY of 65,570 PRACTICING CHARTERED ACCOUNTANTS spread throughout India have crossed the aged of 50 YEARS, if such monopoly is still retained for Tax Audit in Income-Tax Act/Direct Taxes Code, the day will come that Income-Tax Deptt. will not get voluntary compliance in Tax Audit cases. Already exising Non-CA Tax Professionals handling tax audit cases have to roam around in search of emty slots of CA Signture during due dates for filing return in tax audit cases.

    FINALLY, I APPRECIATE THE LEARNED OFFICIALS IN THE FINANCE MININSTRY

  47. B.S.K.RAO says:

    1. Original Income-Tax Act, 1961 was well drafted by learned officials in Finance Ministry & it was capable of meeting the expectation of the Govt. in all future events, except requiring amendments for events/changes taking place in this 21st Century. Disturbance to the original intention of legislature in Income-Tax Act, 1961 started in 1984 by the intervention of Institute of Chartered Accountants of India by way of inserting mandatory Tax Audit Certificate U/s 44AB by only Chartered Accountants. This was also cautioned by Sri.P.C.Padhi, former Chairman, Central Board of Revenue and Deputy Controller & Auditor General of India, Sri.D.K.Rangnekar former Editor, Economic Times, who were the members of Direct Taxes Committee, popularly known as Wanchoo Committee & gave dissenting note on the issue.

    2. The word “Chartered” of The Institute of Chartered Accountants of India (Financials) denotes some thing of a dominion state of affair as against Sovereign Independent Republic of India. On date, there are 46 Plus Mandatory CA Certificates in Income-Tax Act, which were inserted on the behest of ICAI (Financials) since from 1984. Because of 46 Plus mandatory CA Certificates in Income-Tax Act, 1961 Non-CA Tax Professionals viz. Legal Practitioners, Cost & Management Accountants, Company Secretaries & Income-Tax Practitioners can not exercise the authority granted in the statute fully & independently. This is practically causing strict hurdle for voluntary compliance. This position of Non-CA Tax Professionals is comparable to decree of court which can not be executed.

    2. Therefore, I am of the strong view that definition of Accountant should be expanded to include related professionals in the interest of our esteemed Govt. revenue.

  48. B.S.K.RAO says:

    World over functions of Accounting are classified depending on the area of operation, application & usage. They are as under..

    (1) Cost Accounts=> Manufacturing/Processing Activity..
    (2) Financial Accounts = > Trading Activity..
    (3) Management Accounts => Management Level/Decision Making..

    Note:-Management Accounts is nothing but application of Ratio Analysis and Cash Flow Statement on Cost and Financial Accounts.

    By The Cost and Works Accountants (Amendment) Act, 2011, name has been changed to “The Institute of Cost Accountants of India” and the members got the power to work in the area of Management Accounts also and can re-designate themselves as ACMA/FCMA. Now, it is funny that both institutes passed by an Act of Parliament called by similar short name of “ICAI”. Of course syllabus is almost similar in all the three institutes called by different name of ICSI, ICWAI and ICAI.

    In view of the above amendment, Cost Accountants now possess wide power of working in the area of Cost Accounts, Financial Accounts & Management Accounts. And hence, Institute of Cost Accountants of India should be called full accounting body in India. Whereas, Chartered Accountants are restricted to work in the area of Financial Accounts only. This being the case, I do not understand why only Chartered Accountants are authorized to conduct Tax Audit U/s 44AB of Income-Tax Act and enjoy monopoly of authority, causing strict hurdle for voluntary compliance.

  49. B.S.K.RAO says:

    Particulars of Income-tax admitted in tax audit cases for Asst. Year 2012-13 & 2013-14 that relates to return filed in ITR-4, 5 & 6 as provided by CPC, Bangalore as at 28.05.2014 are as under:-

    Particulars…………….Asst. Year 2012-13..Asst. Year 2013-14

    Total Tax Admitted in ITR-4 Rs. 23,986 Crores Rs. 23,952 Crores
    Total Tax Admitted in ITR-5 Rs. 20,712 Crores Rs. 21,556 Crores
    Total Tax Admitted in ITR-6 Rs.2,92,266 Crores Rs.2,34,456 Crores

    Margin derived by farmers is not taxed in Income-Tax Act, but margin derived by next sellers of such agricultural output is taxed in their hands in Income-Tax Act. Presuming the output of corporate assessees reach the ultimate consumer in three stages & considering tax admission in corporate cases & 50% of such corporate assessees do business with non-corporates covered by tax audit, who are in between the corporates & retailers and also considering non-corporates engaged in service sector, I am of the strong view that combined Income-Tax admission as per return filed in ITR-4 and 5 covered by tax audit U/s 44AB should have crossed at least Rs. 15,00,000/-Crores. (Basis being 80:20 ratio of Ag. & Ind. Output).

    Since introduction of Tax Audit by only CA’s in 1984, our esteemed Central Govt. has lost huge revenue on account of Income-Tax. Therefore, ICAI (Financials) should reimburse the same to the Central Govt.

    Therefore, I am of the strong view that definition of Accountant should be expanded to include related professionals in the interest of our esteemed Govt. revenue.

  50. B.S.K.RAO says:

    Audit means “verification”, depending on the purpose they are classified as Energy Audit, Environment Audit, Product Audit, Process Audit, Legal Audit in USA & Tax Audit in Indian Income-Tax Act. Here, person conducting audit should be specialized in that subject. Hence, the word “Audit” is not the domain of CA/CMA, Assessing officers of Income-Tax Deptt. who come from different streams conducting audit in scrutiny assessment proceedings are not CA/CMA. In fact, criteria of considering Accountant to conduct Audit under Income-Tax Law or DTC is wrong. Because, it amounts to allowing person writing books of accounts to conduct audit. In conclusion, person specialized in Income-Tax law should issue Certificates/Reports in Income-Tax Act….

    Indian legislature provided special class of persons called Advocates in Advocates Act, 1961 to practice all Indian laws. Therefore, appearance clause is not yet all required in any Indian statute. 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, nullifying the effect of Section 33 of Advocates Act. This also confirms to Section 29 of Advocates Act. As practice of law is the domain of Advocates, it is not only power vested, but also a prerogative power of Advocates to conduct Tax Law Audit in India in view of latest SC verdict

    FINAL OPINION IN THE INTEREST OF GOVT. REVENUE & ALL TAX PROFESSIONALS

    On careful study of Section 288(2) of Income-Tax Act, 1961 read with Rule 12A of Income-Tax Rules, 1962, it has to be presumed that all five class of person’s viz. Legal Practitioners, Chartered Accountants, Cost & Management Accountants, Company Secretaries & Income-Tax Practitioners possess knowledge of Section 145 read with 14 Accounting Standards of CBDT, required for Income-Tax Practice. Because certain qualification has been fixed in Income-Tax Act for these five class of persons. Further, Accounting Standard framed by ICAI (Financials) & IFRS not required for Income-Tax Practice. Here the question is, when such other four class of Non-CA Tax Professionals are authorized to prepare return under Rule 12A of Income-Tax Rules, there is no justification to prohibit them for issue of Certificates/Reports in Income-Tax Act.

    In the case of Sales Tax Practitioners Association of Maharashtra & Bar Council of Maharashtra, about Audit and Certification of Sales Tax Returns, recently Hon’ble Supreme Court held that “There must be judicial restraint, We will not interfere, Tell legislature to amend the law” – Justice Markandey Katju (SC)

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