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Sargun Babuta

Three years back I wrote an article on a watermark “Kosh mulo Dand” printed in Hindi on the ITR V. At that time I suggested to translate it as “Ayakar Vibhag” as in English, above “Kosh Mulo Dand” is written ‘Income Tax Department”.

But, now, it seems appropriate “Kosh Mulo Dand” rather in English it should be written something related to punishment” as in Hindi watermark, because for every little delay in compliance (even not habitual or willful) there is a heavy penalty which is not less than a “Dand”. Professionals, businessmen, salaried class, any other entities those are paying taxes as a dutiful citizens are thinking likewise.  And why? Let’s observe from different point of views

From a CHARTERED ACCOUNTAT’S point of view

Oh my gosh ! dates are approaching! GSTR 1, GSTR 3B, COMP-08, GSTR 9, 9A, 9C, ITR, Tax Audit, Company statutory audit, Certificates, above all generation of UDIN.

A CA professional is trying really very hard to adhere/ stick to the so many compliances  dates. He does not have time for quality check. If he gives his time and demands quality in work then date passes either of GST, ITR or ROC etc…

If he catches date then he has no time to check quality of work or to give any suggestion to his/ her client to improve upon. One more sword hanging on his head, the fear of penalty for not meeting the dates. His clients are not ready to bear any penalties or late fees but compel him to upload first and later check the quality. We agree or not even a professional has to compromise with quality of his work.

A check is good, in a way UDIN is mandatory has to be generated for signing a Tax Audit and Company Audit, issuing of any certificate  but it should not be out of fear of compliance, but should be  for quality check. I think purpose of generating UDIN by ICAI is also to check the quality and quantity of the work of a professional.

Dates should be taken care of but not at the cost of quality. A professional shall be told to give due importance to quality instead of dates. Yet keep the dates in mind, but due to some reason (genuine) he is not able to adhere the date before imposing penalty which is system generated these days he should be given a chance to be heard.

From a COMPANY SECRETARY’s point of view

The government should understand that there is a complete change in the business environment, firstly demonetization then GST. There is no free flow of cash/ fund in the market. There are genuine cases who can’t bear the cost of all the compliances and fees of  professionals and bearing penalty of Rs.200 per day per form on delay of annual filing will an additional burden. Now adjustment of UDIN for statutory Audit is added cumbersome activity. The concept of dates for UDIN was not very clear to all yet. Hence, no penalty shall be imposed for this year.

With great efforts, Company secretaries have made their clients understand the importance of ROC compliances. For next two years there should be less penalty in delay on filing Annual Return & financial statement e.g for 15 days _____ Rs., For 30 days _____Rs.  and so on.  It is a suggestion not to suppress the small corporates (genuine ones) so much that they stop their unit/ organization. These sectors are also jobs providers to many daily wagers, salaried class employees and other employees.

The step of closing down shell companies and check on the doubtful  transactions are understood and appreciable, but the fear of compliances should not be so heavy and penalizing that every corporate is left with no option but to close down the unit/ organization.

It is also killing the instinct of creativity and  wish to explore new venture in the market.

COMPANY/ BUSINESSMAN’s point of view

Scarcity of funds in the business market, cheque bouncing incidents, other legal matters etc, are compulsions not to take initiative in the new ventures. Suggestion from professionals and awareness of compliances of GST, ROC, Income tax and penalty are the reasons that new businessman/ companies are reluctant to start up new ventures/ incorporate companies. This will lessen the revenues for the ROC and other Government departments which is necessary for the development of our Nation.

Systems are important, but penalties are killing the instinct to work, quality of  work and employment.

Our talented and expert future generation, for whom we were waiting for so long to come and take reigns of our great nation, is going away from us. They are fascinated to settle abroad.

A humble request is to kindly consider compliances without heavy penalties being imposed on individuals, corporates and professionals

Let them enjoy happy working environment !

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May 2024