In India, Institute of Company Secretaries of India, Institute of Cost Accountants of India, Institute of Chartered Accountants of India and Bar Council of India are the four professional bodies passed by an Act of Parliament, whose members are engaged in the line of tax practice. They should shed off their own narrow mindedness and come out of their cocoons and think of the country’s interest. Each one trying to desperately fend off others from what they think is their own sacred area.
Certificate from only Chartered Accountants U/s 44AB introduced in Income-Tax Act in 1984, Since then, CA certificates started entering Income-Tax Act. On date there are 46 plus CA certificates in Income-Tax Act, which is also inherited in draft Direct Taxes Code, 2010. These CA certificates barricade support for voluntary compliance from Non-CA Tax Professionals and new Non-CA Tax Professionals are not entering tax profession. CA certificates are causing strict hurdle for voluntary compliance not only in Income-Tax Act, but also in other Central and State Govt. tax laws (Ex:- In Finance Act, 2012 negative list introduced in Service Tax requiring the assistance of more tax professionals, but number of tax professionals are stand still on date). Tax audit data provided by CBDT has been published in CA Club Website on 16.11.2011. Herein, it is evident that only 59,472 Chartered Accountants are practicing tax law throughout India. There is ceiling of 45 tax audit assignment to be undertaken by each CA, irrespective of Corporates or Non-Corporates. In latest e-filing website of Income-Tax Deptt. only CA’s are treated as Tax Professionals, now existing Non-CA Tax Professionals will also dropout from tax profession and Govt. has to relay on only 59,472 CA’s for seeking compliance U/s 139 of Income-Tax Act.
World over functions of Accounting are classified depending on the area of operation, application and usage. They are as under:-
Cost Accounts > Manufacturing/Processing Activity
Financial Accounts > Trading Activity
Management Accounts > Management Leval/Decision Making
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 and Management Accounts. 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.
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Author : B.S.K.RAO, Tax Advocate
E-Mail: raoshimoga@gmail.com
dear AMIT KUMAR I read your comment every return should be certified by CA.
I want to ask some question?
1. Can you tell me Income Tax act 1961 is a law or story book?
2. Who are law professional in India or in other word?
3. what is difference between word “appearance” in income tax act 288 & word
“practice of law” in advocates act 1961?
4) Can a law professional can be debarred to certified forms prescribed under
any law?
5) Can a authorized agent on mere word “appearance” not authorized legal practitioner will be professional of any law as like in income tax website created by CBDT what is motive behind it?
Legislature provided special class of persons to practice law in Advocates Act. Hence, separate clause for appearance by third person not required in any Indian statue book [Bar Council of India Vs A.K.Balaji (SLP(Civil) Nos 17150-17154/2012 Dt.4.07.2012]. In this SC verdict, it was clearly held that Advocates alone entitled to practice Income-Tax law. Mr.B.S.K.Rao in the above article furnished evidence that 59,472 CA’s are practicing Income-Tax law throughout India. Now, Bar Council of India should take action U/s 45 of Advocates Act as per the direction given in the case of A.K.Balaji Vs Govt.
of India, Madras HC Dt.21.02.2012 [35 KLR 290 (Mad.)(2012)].
On the behest of ICAI, Chartered Accountants took back door entry by introducing CA Certificate U/s 44AB of Income-Tax Act in 1984. Since then, CA Certificates started entering Income-Tax Act & stands at 46 Plus in numbers on date. There is no single instance of utilisation these CA Certificates by the Income-Tax Deptt. on date or action U/s 277A of Income-Tax Act on additions made by AO sustained in appeal. In this regard, I press CBDT to take action on all such cases at the earliest.
In fact, Non-CA Tax Professionals are equally authorised with that of CA’s to prepare the return & represent assessees U/s 288(2) of Income-Tax Act read with Rule 12A of Income-Tax Rules. Rule 12A inserted by Notification No.SO 2029 Dt.13.06.1962 & authorises Non-CA Tax Professionals covered U/s 288(2) to furnish report on the examination of assessees books of accounts in the process of assessment proceedings under Income-Tax Act. Then, why again Section 44AB introduced in Income-Tax Act in 1984. When once authorised to prepare return under Rule 12A, it is presumed that such persons possess knowledge of Income-Tax read with accounting standard prescribed in Section 145 of Income-Tax Act. in reality now a days accounts of business enterprises are maintained in computer digital format by part time accountants who are not CA’s & question of checking correctness of total does not arise. Further computer gives out Profit & loss A/c & Balance Sheet for application of Income-Tax Law. In this regard, ICAI has created confusion & misconception about understanding of basic accounts by none other than Chartered Accountants with the main intent to keep Non-CA Tax Professionals away from well diversified tax profession. Hence, I fully agree with above opinion of B.S.K.RAO, Tax Advocate
Dear Advocate,
If you want to do tax audit first pass CA exams. Any one can take up that course. And if you fail that means you are fit to do a tax audit assignment. Can a school teacher/daily labourer/MBBS doctor argue cases in courts for others? Will the bar council give membership to them? What a silly ridiculous article
TUMKUR DISTRICT TAX BAR ASSOCIATION (REG.,)
NO.12/1, 9TH CROSS, S.S.PURM, TUMKUR-572102.
PHONE: 0816-2275959, 9141736080.
17/03/2013.
TO,
SHRI.P. CHIDAMBARAM,
Hon’ble Finance Minister,
Govt. of India, North Block,
NEW DELHI-110001.
Hon’ble Sir,
Sub: Return filing for Asst. Year 2013-14 under section 44AB
And problem of wrong adjustment made by CPC- Reg
-0- We are sorry to note that the department has not following the direction so the Hon’Delhi High Court in rectifying the mistakes and wrong adjustments made by the CPC without following any procedures laid down under the Income Tax Act itself. The local jurisdictional income tax officers are not caring for even genuine problems of the assesses whenever the returns are e-filed and many officers are advising us to file the hard copy and not to use the e-filing facility to reduce the problems of the CPC and to get the rectifications done on a faster mode. Just to get the rectification done by the CPC one has to follow un-necessary procedures and correspondence and e-filing of the rectification application etc., which an ordinary assessee cannot follow all these and the department can easily eat the fruits of its wrong things without any natural justice. The Board is not taking any hard steps for easy and early rectifications and in between the assessee and representatives are suffering because of this. The Board knows very well that the returns of income for the assessment year 2013-14 will be filed after 1/04/2013,but every year it will not notify the forms and the e-filing facility will not be opened will June or July and it is practical experience of all who are depending on e-filing facility. Now a days the Banks and other financial institutions will ask for the copy of the IIR V and one has to answer that the department has not started accepting the returns for 2013-14.Is it not a shame on part of the department?
The amendment to 44AB and raising the limit to One Crore has not effected on the small assessee as due to strict introduction of the VAT by all the State Governments the turnover of even a small of the smallest trader has increased because of input tax mechanism, and the Central Government knows it very well and under the circumstances the limit for 44AB would have been kept at 5 Crore and individual assessee should be kept out of the preview of the 44AB. The Central Government is thinking of introducing GST and if the same happens the turnover of all the traders will increase by two fold. This fact should be kept in mind before fixing the 44AB audit turnover limits. The law of 44AB is like “law without justice”. Lewis Carroll in Alice in Wonderland says : “ ‘I’ll be judge, I’ll be jury said cunning old Fury I’ll try the whole cause, and condemn you to death”
TUMKUR DISTRICT TAX BAR ASSOCIATION (REG.,)
The history of the 44AB audit has shown that the same has not resulted in any quality increase in the collection of the revenue nor has deducted any huge block money or irregularities of the assessee nor has reduced the work of the department. Even where the 44AB audit has been done by a CA the Department has disallowed the climes of the assessee while passing order u/s 143(3).Even it has not helped the department to increase the tax base and it remains at the same level as expressed by the Hon’Finance Minister in the Parliament itself. This is because of the complexity in tax laws in the name of simplicity. Here we have to quote Sri Nani A Palkhivala from his preface to the Eight Edition of Income Tax, By, Kanga and Palkhivala:
“Today the Income Tax Act 1961 is a national disgrace. There is no other instance in Indian jurisprudence of an Act mutilated by more than 3300 amendments in less than thirty years. Simple provisions like Section 11 to 13 (which deals with exemption of the income of charitable trusts) have suffered no less than fifty amendments.
The tragedy of India is the tragedy of waste-waste of national time, energy and manpower. Tens of millions of man-hours, crammed with intelligence & knowledge of tax-gatherers, taxpayers and tax advisers- are squandered every year in grappling with the torrential spate of mindless amendments. The feverish activity achieves no more good than a fever.
Our law reports bear witness to the fact that generally a case reaches hearing in the High Court in twenty years and in the Supreme Court in thirty years, after the relevant assessment year. The situation is continuously aggravated by the deluge of new amendments – the indigestible verbiage; and the flood of litigation is heavier today than ever before”
In the same book mentioning about the object of tax policy:-
“Two things strike the student of Indian income-tax with trepidation and amazement- the precipitate and chronic tinkering with the law by bureaucrats who are the unacknowledged legislators of India, and the anaesthetized patience of the Indian public .Truly, we Indians area “low arousal” people. We endure injustice and unfairness with feudalistic servility and fatalistic resignation. The poor of India endure inhuman conditions which would lead to a bloody resolution in any other country. The rich endure foolish laws and maddening amendments which benefit none circumvent the law than to fight for its repeal.
Taxes are the lifeblood of any government, but it cannot b e over emphasized that the blood is taken from the arteries of the taxpayers and therefore, the transfusion has to be accomplished in accordance with the principles of justice and fair play.
Every government has a right to levy taxes. But no government has the right in the process of extracting tax, to cause misery and harassment to the tax payer and the gnawing feeling that he is made the victim of palpable injustice”.
If we see the present tax policies and the working of the CPC and the administration of TDS and TCS shows how carelessly the tax policies are framed and administered by the Government.
Specially in Karnataka this year the availability of CA’s for the 44AB audit is doubtful as the Department of Co-Op Audit has allotted all the audit work of the co-operative societies to the CA’s and most of them have been allotted more than 50 to 65 societies and the limit for the audit as fixed by the ICAI is only 40.Under the circumstances the Board should think now itself to reconsider the limit of 44AB audit or it should be made applicable only for Corporate Sector and keeping away the individual assessees from the ambit of 44AB audit. To know more details about this kindly logon to sahakaradarpana.kar.nic.in and link sahakaradarpana.kar.nic.in/ca/CAPanelOrder.aspx where you can see for yourself that how the limit for 44AB audit will work out for the assessment year 2013-14. The voluntary compliance of returns will come down if these restrictions are put for filing the returns of income. The tax collection process should be smooth.
TUMKUR DISTRICT TAX BAR ASSOCIATION (REG.,)
We request the Finance Minister to consider the facts and circumstances under which we are requesting for the amendment to 44AB or increasing the limits of the 44AB or restrict the 44AB to the corporate sector or where the public money is involved. And further we would like to remind your good self “What is the argument on the other side? Only this that no case has been found in which it has been done before. That argument does not appeal to me in the least. If we never do anything which has not been done before, we shall never get anywhere. The law will stand still whilst the rest of the world goes on; and that will be bad for both” (Denning L.J).
Thanking you sir,
Yours faithfully,
For Tumkur Dist., Tax Bar Association (Reg.,)
S.Prakash,
Hon’President.
Copy With Respects to:-
1. The Chairman,
Central Board of Direct Taxes,
North Block, New Delhi-110001.
2. Ms.Rita Dogra,
Under Secretary to Govt. of India,
Ministry of Corporate Affairs,
Shastri Bhawan,
“A” Wing, 5th Floor,
Dr.Rajendra Prasad Road,
New Delhi-110001.
3. Shri.Rajesh Kumar Bhoot,
Director (TPL-III),
Central Board of Direct Taxes,
North Block, New Delhi-110001.
TUMKUR DISTRICT TAX BAR ASSOCIATION (REG.,)
At best this article appears to be flogging the dead horse again and again simply because the Cost Accountants cannot seem to gain the confidence of general public in the field of taxation and at worst, plain contempt to the numerous judgements delivered by various courts.
Courts time and again have held that the Constitution guarantees equality only among equals and not among inequals. The CA’s CWA’s, CS’s and advocates are experts in their own fields and the law has recognized their area of expertise. No amount of churlish and childish behavior is going to make the advocates and CWA’s equal to a CA in the field of financial auditing just as a CA is not going to be equal to an Actuary in the field of insurance even if he has sufficient knowledge in the field. As far as the author’s claim about CA’s appearing in Courts for tax cases is concerned, he would do well to understand that those CA’s would have passed their law examinations and would be practising in High Courts and Supreme Court AFTER surrendering their Certificate of Practice issued by the ICAI. Nobody is preventing the advocates and CWA’s from passing the CA exam and getting a COP from ICAI and then do audit u/s 44AB.
If the ideas of the author are taken seriously, we would soon hear the Cost Accountants demanding that they should be allowed to perform surgeries like Doctors because they also know how to hold a knife and cut open a person’s body. And hey, they can also call themselves Generals in the Indian Army. After all they would have shot with toy guns during Diwali when they were kids !!
A final suggestion to some of the CWA’s who have claimed here that they find CA’s don’t have any practical knowledge: PLEASE IMPROVE YOUR ENGLISH FIRST. YOUR GRAMMAR MAKES ME SHUDDER. YOU GUYS CANNOT WRITE A TWO LINE REPORT.
I support the views of R.S.Shamasundar, Venkatesh.S, Jigar Shah,Mukesh Saran, Sanket Shah, Avardhana, Shailesh Kamdar, Chikkerur, Harshkumar Sharma and Bhavesh Savla.
CAs are not charging fees which the advocates charge for their representation. If CAs are allowed to appear in Courts, the assessees can save substantial amount of money too. When every professionals have their own territory, why are they trying to enter into CAs’ circle.
When members of other professional bodies are not supposed to get into CAs’ circle, where is the question of allowing Tax professionals (Non-CAs).
Let them appear in exam to pass CA to certify for 44AB purpose or let CAs also to practice in Company secretarial matters, Cost audits and Court representions before letting other professionals to do the same.
It is like that the duties and responsibilities of Comptroller and Auditor General of India now also being performed by Attorney General of India. It seems that this article is written without application of mind.
I think the above story is not helping any one….. Each professional are going through there own curriculum and the law is providing the responsibility based on each academic excellence. I think tomorrow the question would be why the CA are monopoly for conducting statutory audits and let others also do this without knowing ABCD for the same….
This monopolist trust vested on Chartered Accountants was also upheld by the Supreme Court in the Case of T.D. Venkata Rao v. Union of India [1999] 237 ITR 315 (SC).In this instant case, T.D.Venkata Rao, an Income Tax Practitioner, had questioned the legal validity of allowing only CAs to Audit under section 44AB. Supreme Court upheld the superiority of CAs by noting that Chartered Accountants, by reason of their training have special aptitude in the matter of audits and no other person can be held eligible to conduct audit under Section 44AB. Supreme Court further held that CAs are a Class by themselves meaning that CAs are the brand for auditing itself.
Dear All,
As the matter is decided by Hon SC , why any one should now give a thought to otherwise very well settled issue.
Its nothing but creating unnecessary debate for nothing.
Rather it will be worth noting from the Income Tax Dept , what contribution tax audit reports have made to their tax administration vs tax compliance since the introduction.
Regards
CA Suniiel R Karbhari
Dear Mr.B.S.K.RAO, Tax Advocate.
For your questions.
I kindly request you to do not compare any profession with just name of syllabus. You may please go through it and why tax professional ( Non CA ) should not try to clear CA Exams.
If people got skills INDEED, i don’t think anybody find difficulty in clearing CA exams now-a-days. And can sing Report U/s44AB.
I personally thinks that Every profession has its unique characters and values. And other professionals should respect them instead of making irrelevant issues.
and please update your figure, as now practicing CAs are more then you stated.
CA’s had a very distinctive knowledge in areas of audit… Look at syllabus of CWA or CS or LLB they just have basic idea of audit where as CA are trained extensively for audit… We make Accounting Standards… We make standards on auditing… First anlayze what other institutes have done in area of auditng…
U will find CA are most responsible and qualified for audit work
There are some advocates who are exclusively dealing in taxation side only. ADVOCATE can only appeared in case of tribunal & high court. Advocate is also competent to check the account books prepared by the assessee. Keeping in view the advocates should also be authorised to audit the account books of the assessee. Appropriate steps should be taken by the finance department in this regard. 9415221371
Dear Sir,
It seems that the author of the article has not understood the nature of CA Course. It is a full time course with articleship of three year training under a CA. It can’t be equated with Advocates (who can complete a law course in any college) and the other two courses which can be done by correspondence while working and earning. The Indian CAs command respect all over the world because of the knowledge they posses after completing the course, which is considered to be toughest among all courses in the world.Further CAs are governed by strict code of conduct and ethics and the Disciplinary Committee of the Institute takes action against erring CAs. The anxiety of the author regarding non-availability of CAs for audit is a misnomer because till date there is no complaint from any assessee regarding non-availability of CAs for doing the audit.
Dear Krishna,
Universal truth is that a doctors job cannot be got done by a nurse.
Similarly the job of a CA.
Pls. answer the reply of Mr. Jigarshah, Mr. Mukesh Savan, Mr. Avardhana, Mr. Chikkerur, and Mr. CA. Bhavesh Salva.
Mr. RAVI Davanagere,
He is not suppose to comment openly on CAs as a whole as THEY ARE HAVING(FEEDING) BIG `SUITCASE” SO, Govt. has to relay on only 59,472 CA’s
Dear Sir,
I don’t agree with your views coz we all knows that you can appear for hearing matters in all the way from CIT (A) to SC whereas CA or CMA only can go upto CIT(A)and ITAT.
it doesn’t means that CAs don’t have any knowledge regarding they only get power just because they know how can handle the accounts and compliance of Accounting and Auditing Standards just this is the matter and nothing else even then you are feeling that CAs don’t have knowledge then its upto you. i can’t say regarding your views.
So MR. Krishna
What you say is just coz there are some rotten apples that get through quality check, as there are rotten apples let there be no quality check and mix all apples oranges, bananas and sell all of them as apples coz anyway they are all fruits???
Sorry i dont see any sense in it
I have one question ? CA are better qualified for tax practice because they have in depth knowledge of the subject, then why there is no such qualification or knowledge is required to become an ITO or Income-tax commissioner ? You will find ITO clearing his BA or an Engineer or Doctor(sometimesMBBS or MD) as Commissioner of Income-tax. There interpretaion of Act is sometime horrible and based on Additions/disallowance are made and they gets away with that and Assessees have to pay the price in the formof litigation, which some time years to clear.
Dear Mr. B.S.K.RAO, Tax Advocate
Interpretation of you “Being CA do Tax Audit that is creating a hurdle” is meaningless. Please change your outlook of being negative to Positive and do yours SWOT analysis. It will benefit you.
I support author, as i have seen in my expereince many CA’S, eventhogh they cleared ICAI’s exams, but still lack of practical application & knowledge., In my opinion all the qualification is equal (CA, CWA,CS, LAW etc.,) matter differes is – individual’s efficienty, competence, ability & commonsense.,
Dear All
Looks who is talking about monopoly
I am Laughing my heart out with the funny comments from all advocates over here.. really are you professionals so childish.. ( I am not a chartered Accountant so Not biased).
Let me ask a question to all advocates here
Say I am SSLC Passed and worked with an advocate for 10 years so i know some laws and how to handle law points will you so called BAR council allow me to take up cases in courts without me getting a law degree? You will insist on a degree right? So why is bar discouraging a practically law educated guy from entering bar???
Now, You people are practicing in law and chartered accountants too, are well verse in certain laws(experts i should say), so why do you still not letting them enter courts and represent??? isnt CA enough Degree for you people??? again you want only Law graduates to monopolise in courts
and just like in courts, you people just put in a big argument with almost zero knowledge of what you are talking.. CA/CMA/CS all starts which “C” that doesn’t mean all of them study same thing. still you talk big things
and now, you advocates cant even handle your own work area and you people want more exposure to accounts. let me make one thing clear to you people, Knowing what debit and credit is and what balance sheet and p&l is doesn’t make you experts in accounts and taxation accounting.
and for 54792 whatever number of chartered accountants are concerned, that shows the quality of CA institute that doesn’t let just anybody to pass and practice, unlike law where anybody who is SC/ST whatever or can mug up some law can easily pass.( i know what i am talking about)
I continue next page,
2.ICWAI every cost accounting compliance should be certified by cost accountant.
3. C.A. Last and supreme authority in every country vested in one Chartered Accountants financial dedication of every country is decided on basis of what power has been reserved for chartered accountants ,so in india chartered accountants are created to compliance link between public & governments
I kindly,request to central government that every income tax return should not be filed without certified by C.A.after that every loan proposal file must be
certified by C.A.to sure about intention & credit worthy of assesses.
4.Tax Consultant are not authorized to do any financial work in country at all
because they are not proper experienced and required technical education.
therefore,I request to government to give above mentioned power to respective professional because assesses don’t know the rules.act etc.if work is to be done only by proper professionals C.A.,C.S.,ICWAI Respectively then it is in interest of Governments only
Thanking you,
Sir, In one way I agree with sri BSK Rao, That is under Advocates Act, it is only Law graduates entitled to practice under any Law and Incometax Act is no exception.
At the same time CAs, cost actts, CSs are experts in their fields and all the Professional services are essential for successful functioning of any business or industrial organisation. Before Financing a project the Banker will obtain Legal opinion from an Advocate, Financial report from a CA, a valuation report from an Engineer. So on let CAs do.
But practicing under the Income tax Act shall be exclusively given to the Advocates only. by the recent changes in Income tax Act makes only CAs as Tax professional, which is not correct. It is not the CA who is signing the Audit report representing the case before the Dept in many cases.
I frankly ask my CA friends how many of them sparing how many days at least hours on each audit case before signing, not preparing the audit reports.
Many a time, it has become an additional exercise on a bonafide assessee rather than rendering a useful purpose to the department.
Dear friends,
I request central government to give proper authority to every professional for which they are created,
Eg. 1. CS are created for corporate law matters then every company which required to file any single page to ROC then it must be certified by any CS
1. There is no difference of opinion about a CA doing a financial audit. He is specially trained for the job.
2. The difference of opinion is about the tax practice as such. It is wrong to state that accounts are understood only by a CA. All other professionals (less advocates) and even Commerece Graduates / Post Graduates are capable of understanding accounts. Then why only CA and an advocate is permitted to put the digital signature on the tax returns of the clients?
3. The taxation practice is about 50% accounts and about 50% law. The law is understood very well by all professionals including advocates. Then why a CA is given a special treatment?
There are many chartered accountants with LL.B and LL.M qualifications. They are practicing as advocates specialized in tax practice. Similarly, why advocates, CS and CMA should not consider passing CA Exam and then take up tax practice.
CERTIFICATE FROM CHARTERED ACCOUNTANTS ONLY IN INDIA. IN OTHER COUNTRIES ON SOME OCCASIONS.
i AM ALSO CONFUSED WHETHER TAX AUDIT IS A STATUTORY OR NOT.
IF IT IS STATUTORY THEN A CA COULDN’T BE APPEAR ON BEHALF OF ASSESSEE U/S 288(2) OF IT ACT 1961 IN WHICH CASE HE AUDITED THE ACCOUNTS. BECAUSE WHEN HE AUDIT ACCOUNTS OF THE ASSESSEE PERFORMING DUTY ON BEHALF OF GOVERNMENT.
IT IS WELL SETTLED RULE OF THE LAW NOBODY APPEAR FOR BOTH PARTIES.
regarding this i want to ask from CBDT. If any officer is read this comment
Dear Sir,
First of all I want to say there is no benefit of audit u/s 44AB of income tax act 1961, it is just extra financial burden on assessee. Since 1984 object is fulfilled for which this section introduced.
Secondly I want to say inflation increased more than 25 times & minimum auditing ceiling should be 10 crore for proprietorship,partnership concerns & professionals.
third as per service act on legal services exempt from service tax & advocate only class u/s 29 of advocates act 1961, who deals in legal services not chartered accountant.
AT LAST I FULLY AGREE WITH MR. BSK RAO ADVOCATE.
Dear Mr.Tax Advocate, what do you want to convey???…… Firstly you people coming from LLB background do not know ABCD of Accounts and you speak about accountancy….. Secondly your talk is based on “syllabus”. You base your talk on academics…….. CAs will go through 3 years internship and other course students will not. Please visit any commissioner’s office to realize actually Commissioner takes help from CAs. These CAs are hired by the authority on his own interest and not by any mandate. Mind the importance of CA in tax practice.
So called Non-CA Tax professionals do not posses the required skills to discover the deliberate fraud.
Lastly, my suggestion for you is you do not know the syllabus of CA curriculum. Kindly visit icai.org for curriculum.
Dear Sir
It is not about the monopoly. Please don’t see from the point of view of your benefit. See it from the point of view of the benefit of the society as a whole. There are clearly duties defined for the respective professional bodies. Also the different bodies created for the fulfillment of their purpose. If all authority will be given to all professional bodies then there is no any purpose of creating different professional bodies. Let the CA to do their work. Let the CWA to do work in the area of Cost & Works accounts. Also for CS, their area in work related to Company law matters. So, from my point of view, you are creating point only for your benefit.. PLEASE THINK WIDELY…. AND IN THE INTEREST AND BENEFIT OF THE SOCIETY AS A WHOLE…
As per Guidance note on Issues in Tax Audit under Section 44AB of ICAI
Purpose of Tax Audit:
The purpose of Tax Audit is to ensure that books of Accounts have been maintained in accordance with the provisions of the Income Tax Act. Circular No.387 issued by the Central Board of Direct Taxes which has been annexed to the material circulated to you also highlights this fact. Accordingly a proper audit for tax purposes would ensure that proper records are being maintained, and that the accounts properly reflect the income reported by the Assessee. This audit effectively curbs Tax Evasion and ensures Tax Compliance. Tax Audit also ensures that the Accounts are properly being presented to the Assessing Officers when called for. The precious time of the Assessing Officers is also saved from the routine and ineffective verifications like checking of totals and vouching of Purchase and Sales transactions. They can devote their time in more important investigation aspects of a Case. Thus Tax Audit saves considerable time to the Income Tax Department.
Who can carry out Tax Audit?
After the applicability of Tax Audit, the next question arises regarding who can conduct Tax Audit. Section 44AB requires that the accounts should be audited by an Accountant. The explanation to Section 44AB states that the word accountant shall have the same meaning as the explanation to Section 288(2). The Explanation to Section 288(2) states that
“accountant” means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), and includes, in relation to any State, any person who by virtue of the provisions of sub-section (2) of section 226of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered in that State.
Section 226 of the Companies Act, 1956 says that a person holding a certificate issued by a Part B State may also be appointed as an auditor. But this provision has no relevance today. No person is eligible to be appointed as an auditor by virtue of this provision today. Hence effectively only a Chartered Accountant holding a valid Certificate of Practice can carry out Tax Audit under section 44AB. This proves the level of trust we has been entrusted with. It will be in the duty of us all future Chartered Accountants to uphold this trust. After all C and A are the Alphabets of trust.
This monopolist trust vested on Chartered Accountants was also upheld by the Supreme Court in the Case of T.D. Venkata Rao v. Union of India [1999] 237 ITR 315 (SC).In this instant case, T.D.Venkata Rao, an Income Tax Practitioner, had questioned the legal validity of allowing only CAs to Audit under section 44AB. Supreme Court upheld the superiority of CAs by noting that Chartered Accountants, by reason of their training have special aptitude in the matter of audits and no other person can be held eligible to conduct audit under Section 44AB. Supreme Court further held that CAs are a Class by themselves meaning that CAs are the brand for auditing itself.
I would like to differ with you on certain issues
1. The syllabus of CA , CS and cost are in no way similiar and are quite different. The syllabus of the respective courses can be downloaded from the respective institution website.
2. Section 139 of the Income Tax Act, deals with filing returns. I am unable to understand why there is any problem with compliance with this section. I have never known a fact where assessee have faced problems to find tax practicioners willing to file their returns.
3. Voluntary compliance of the law depends on the willingness of the assessee and there is no regulatory bar on the same.
4. Rest of the issues I will consider them as your personal opinion.
Mr. B S K rao ..why CA are not allowed in highcourt and supreme court . Why CA are not allowed for cost audit. I m not against it but all are given some advantages.
why in high court and supreme court even tax cases are represented by advocates eventhough they are not conversant with practical aspects in taxation accounting? Why service tax is not applicable to advocates unlike CAs or similar professionals? Are they not providing service or something else? Whoever profess something, they treat that something with devotion, respect and try to protect it. But only advocates boycott courts, take law to their hands, when law provides many alternate routes for them, why? In our country one may have many questions, but no answers. Why no educational qualifications, no retirement age, immunity from all laws are there for political leaders? Who drafted that Law? Advocates or CAs? Time will answer all the queries. Only thing is we have to wait. An ape becoming a man has took several million years.
It is true that, chartered accountant are monopolising the tax profession, Tax consultants who are also practising in the field of income tax, VAT and service tax etc are forced to go the chartered accountants for certificates, even the tax departments give step motherly treatment to such tax consultants, discouraging many aspiring individuals to practice tax profession.
In one way it is true that tax professionals need minimum qualification, knowledge and experience, but then India does not lack individuls having capacity to practice tax profession who are denied the oppertunity as such individuals are not chartered accountants.
Hence it is apt for the government to authorise such individuals to paractice tax profession by authorising them to sign 44ab report etc., this oppertunity can be given to those persons having a degree as minimum qualification and by conducting an exam to test their ability to practice tax profession.
Usman Ali Khan
There are some advocates who are exclusively dealing in taxation side only. Advocate is also competent to check the account books prepared by the assessee. Keeping in view the advocates should also be authorised to audit the account books of the assessee. Appropriate steps should be taken by the finance department in this regard. Ashok Goyal Advocate, Street Khazanchian, Sirsa. Mobile No.9416284878
With this argument, CA, CS or CMA should also be allowed to appear before court. It will drastically reduce legal cost as lawyers are charging like extortion money.
Dear Sir
With due respect, your argument on Tax Audit is vague & cannot be justifiable.
Because lakhs together pending cases in various courts & quality of lawyers are not good ( you can see long queque for signing affadvait) CAs are much better with Tax knowledge. Do you urge Bar Council to allow CAs to practice even in HC & SC.
Only because few attenders & nurses are better with medical knowledge can not be ground for allowing everyone to practice as a doctor.
As per present scenario in India, even every degree holder allows to practice as lawyer, our court cases will be closed in next 10 years. So your argement on voluntary compliance by Assessee, CA & ICAI is hurdle is vague & Unjustifiable. Please make recommendation to Bar Council to allow CAs to take Tax & other matters too in HC & SC to help Assessee to complete appeals faster than of today
1. The publication is the reality of issue prevailing on date. I feel
that Govt. does not want revenue, providing full employment to CA’s
is the only motto of Central Board of Direct Taxes. It also indicates
disability of CBDT to administer Income-Tax Act.
2. Only solution for the problem is that Govt. should seriously consider
passing of Tax Practitioners Bill either in the lines of Tax Agent Service
Act of Australia (www.tpb.gov.au) or in the lines of Tax Practitioners
Bill of South Africa (www.sars.gov.za) to generate tax professionals
to fully support voluntary compliance in Indian taxation laws to enjoy
the privilege of optimum tax collection by widening genuine tax base
of assessees.
3. In developed country’s like Australia 70% to 80% of population are under
the tax net, whereas in India only little over 2% of population are under
the tax net. This is mainly because of confining certification power only
to CA’s in Income-Tax Act, 1961, barricading Non-CA Tax Professionals
to enter tax profession
only CA’s are treated as Tax Professionals,BECAUSE THEY ARE HAVING(FEEDING) BIG `SUITCASE” SO, Govt. has to relay on only 59,472 CA’s
If you start merging all professions, then everybody will start demanding the other profession’s work; like CA’s will start asking for Company Secretarial compliance, CS will ask for statutory audit work, CA/CS/CMA will start asking for representating clients at High Courts/Supreme Courts in their respective matters.
It’s better to leave as it is and moreover instead of complaining, if one desires to do certain kind work, they should have achieve the prescribed qualification than asking for more autonomy in their profession.
Dear Sir,
Our Institute does not restrict to any person for pursuing Chartered Accountant course. If u have any problem regarding policy of the government for allowing C.A. only to certify certificates under Income Tax Act, u may pursue course & certify it after completion of CA. Our member never comments like this in respect of power and authority given only to CMA, CS for cost audit & Compliance Certificates respectively.
Thanks
Dear Sir ,
I am surprised to note the above comments , only experts in every field are permitted to carry out certain works to mange the entire system otherwise it will collapse.
I ALSO SUPPORT THE AUTHOR ATLEAST SALES TAX AUDIT SHOULD BE GIVEN TO STATE ADOCATES IN TAXATION BY FOLLOWING NOMINAL PROCEDURE!!!!!
PERSONAL THANKS TO AUTHOR
There is nothing which restricts any one from practicing cost ,financial or management accounts.CA or CMA is not required to practice these also.But the attestation of financial accounts under Companies Act is only for Chartered accounts and the said ammendment is not allowing the CMAs to do that work.They can only conduct cost audit.With due respects the compliance is not governed by tax audits. It is governed by the assesses mindset.All the tax professional can co-exists together as each one is possessing a different skill set and are required at various stages.Even for CAs also tax audit is not that lucarative as it was earlier as now better and more remunerative options exists
And my last point now,will the author clarify that why under the service tax regime, it is only advocates who get the benefit of reverse charge? That is they do not have to pay service tax but it is the recipent who will pay? Why not such exemption is given to other professionals even though a client may have to draft an affidavit to submit before a tax auhtority which he can get done from either a CA or advocate. But the CA will have to charge Service tax and not advocate.
Even in the previous service tax law, such preferential treatment was given to advocates where they got exemption under service taxes and not CA. Did our author-advocate make an issue out of this?
And going by the same logic, then why are advocates so stubbornly resisting changes to the National Tax Tribunal where Chartered Accountants and other professionals will also be eligible to appear along with Advocates. it is because of this strong lobbying and stubborn stonewalling that the National Tax Tribunal has not been operative since the last decade and pendency of the cases is rising.
It is surprising that the author claims to be an advocate but is not aware that the issue has already been decided by the Honourable Supreme Court in T.D. Venkata Rao v. Union of India [1999] 237 ITR 315 (SC). The Apex Court has made the following significant observations:
“Chartered Accountants, by reason of their training have
special aptitude in the matter of audits. It is reasonable that
they, who form a class by themselves, should be required to
audit the accounts of businesses whose income (sic: turnover)
exceeds Rs.40 lakhs and professionals whose income (sic:
gross receipts) exceeds Rs.10 lakhs in any given year. There is
no material on record and indeed in our view, there cannot be
that an income-tax practitioner has the same expertise as
chartered accountants in the matter of accounts. For the same
reasons the challenge under article 19 must fail, and it must be
pointed out that these income-tax practitioners are still entitled
to be authorised representatives of assessees.”