The main objective of the tax audit is to compute the taxable income according to the law and for maintaining transparency in the financial statements filed by the assessees with the Income-tax department. The tax audit u/s. 44AB of the Income-tax Act 1961 is significant practice area for Chartered Accountants. Since the introduction of tax audit, we have been given responsibilities to discharge the duties as tax auditors for the proper compliance of tax law by the assessees.

In a recent ruling Supreme Court (SC) [2010-TIOL-06- SC-IT-L13] in the case of Kelvinator of India Ltd. (Taxpayer) held that income cannot be reassessed on a mere change of opinion, as that would imply conferring arbitrary powers on the Tax Authority. It is only when there is a ‘tangible material’ to believe that income has escaped assessment that the power of reassessment can be exercised and the reasons for reassessment must have a live link with the formation of the belief.

The matter regarding assignment of the tax audit work to one of the SCAs and fee payable to SCA so selected was reviewed and it has been decided that PSBs may appoint at the Head office level also any chartered accountant firm as their tax auditor at a reasonable fee with the approval of their Board /ACB.

The Examination Committee has taken the following important decisions for the November, 2009 examinations. Students are advised to note them carefully. A.    CA course being a professional course, practical training is an essential part of it and accordingly all papers of Professional Competence Examination as well as Final should be practical oriented questions as also [...]

Tally.ERP 9 – Auditors’ Edition provides you, as a CA, the facility to print Form 3CD with the required Annexure, to file Tax Audit returns under section 44AB. Using Tally.ERP 9 – Auditors’ Edition, you can now directly print Form 3CD. You can print the Form after completing the Tax Audit from within Tally.ERP 9 – Auditors’ Edition or externally. The form is easy to fill and comes with some very useful features:

New MVAT Audit Form 704 Additional responsibilities as an Auditor Additional features to be reported in New Form 704 Issues and Difficulties Welcome Changes and Redundant Sections in Old Form 704

The government is considering a proposal to make tax audit reports mandatory for e-filing of income tax returns. This follows a recommendation by the Income Tax (I-T) department after the Satyam accounting fraud issue broke in January following founder Ramalinga Raju’s confession. I-T officials said since the returns were e-filed, there was no provision to [...]

Accounting regulator ICAI today issued a clarification saying that internal auditors appointed as tax auditors can continue to do their work if their selection for the job took place before December 12 last year.  The Institute of Chartered Accountants of India decided that with effect from December 12 last year internal auditors cannot be appointed [...]

Large companies may, henceforth, not find it easy to escape the taxman’s net with regard to the interest paid or payable to the micro, small and medium enterprises (MSMEs) on overdue payments to them. Currently, interest paid or payable to MSMEs is not admissible as a deductible expenditure for income-tax purposes. This has been specified [...]

ITAT, DELHI BENCH `I’ : NEW DELHI DDIT (Int’l Taxation) v Technip Offshore Contracting BV Appeal No. ITA No. 4613/D/07  Dated: January 16, 2009 SUMMARY: Merely because the service tax was ultimately payable to the Government that by itself cannot be a reason to say that the amount of service tax collected by the assessee [...]