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.
———————-
Author : B.S.K.RAO, Tax Advocate
E-Mail: raoshimoga@gmail.com
For those who can understand Sanskrit
काक: कृष्ण: पिक: कृष्ण:
को भेद काक पिकयो:
वसन्त काले सम्प्राप्ते
काक: काक: पिक: पिक:
REQUEST BEFORE CBDT/MINISTRY OF FINANCE
As long as other than CA’s are also authorised to practice Income-Tax law U/s 288 read with Rule 12A & Certificates/Reports from only CA’s retained in the Income-Tax Act or DTC, controversy continues.
Therefore, it is prayed before CBDT/Ministry of Finance to delete Section 288 of Income-Tax Act, rely on 59,472 CA’s for seeking compliance U/s 139 of Income-Tax Act. Please do not expect that both wife & Mother-In-Law on their side for revenue collection.
One more option is to come out with Tax Practitioners Bill which is in the interest of Govt. revenue to derive optimum tax collection.
Karnataka High Court issues notice in PIL against boycotts by lawyers Court room witness to standoff between the Bar and the Bench
While issuing notice to district and taluk-level Bar Associations in a public interest litigation seeking the initiation of legal action against advocates who boycott courts, the Karnataka High Court was witness to a confrontation between the Bench and KN Subba Reddy, president of the Advocate’s Association, Bangalore (AAB). Read further ………..
barandbench.com/content/karnataka-high-court-issues-notice-pil-against-boycotts-lawyers-court-room-witness-standoff#.Ua7qeJx4jg0
Karnataka High Court Chief Justice Vikramajit Sen on Friday said, “It cannot be appreciated that the Bar Association should boycott any court if the decision or verdict is not to their liking.”
thehindu.com/news/national/karnataka/lawyers-should-not-boycott-court-if-verdict-is-not-to-their-liking/article4200558.ece
Bangalore violence: four lawyers held
thehindu.com/news/cities/bangalore/bangalore-violence-four-lawyers-held/article2958280.ece
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.
This is what the author says….
But he forgot that there is one more professional body passed by an Act of parliament – IAI. Can anybody say that these IAI members are not known to most of the people so only advocates can do the work which the IAI members can do??
Another thing is that only the ICAI, ICAI (CMA), ICSI and IAI have similar kind of provisions with more restrictions as compared to practitioners. Tax practitioners are doing marketing for their business which is prohibited for members of these institutes. So you cant say that 10 years experienced person in tax field is more competent than a newly qualified person of these institutes.
Ganesh sir,
In the end, these people will ask the CAs to surrender their COP irrevocably to prove that the answer is coming from a common man and still they will claim that 44AB shall be signed by them.
Their thinking is that it should be them who need power or the ruling itself should be abolished. What a narrow mindedness, but they say political reasons, ICAI influence, etc., etc.,
This discussion and the successive claims made by the non CAs are becoming more and more comical by the day. First somebody writes that non CAs should also be given attestation powers and everyone eagerly jumps into the bandwagon. When they are not able to justify their points, they claim that CAs are encroaching on others’ territory by practising law. People who claim to be opposing monopolistic rules don’t seem to mind it at all when they have the monopoly and when it suits them! Any answers, M/s Mandeepji and BSK Raoji?
Then, a claim is made that if non CAs are allowed to attest, revenue will zoom up and compliance of law will increase. When statistics are demanded, pat comes the response, audit itself is a waste of time and money and it should be done away with.
When nothing succeeds, they indulge in mud-slinging. Now the CA Institute is accused of worrying about only the interests of CAs. I thought, the Parliament created the Institute precisely with that objective! Maybe, the people here think that the ICAI was formed to promote kabaddi or gilli danda?
Coming to Mandeep’s questions… ( Sir, I say this after I have kept my hand on my heart and sworn in the name of Eashwar, Nanak, Ram, Rahim, Allah and Jesus and all other Non CA gods)
We CAs are clear that we are very concerned about our self interest and we practise our profession purely for profit and for our own betterment. Unlike you, we don’t pretend that we are doing any social service when we sign an audit report. I may occasionally charge a minimal or no fee to a school or temple or my good friend but I don’t do it for everyone. There is absolutely nothing wrong in earning a legitimate livelihood by whatever means we have and making a profit out of it. I have nothing to be ashamed of or defensive about giving a hefty bill to a client for good services rendered. Because, I give him a service which an advocate or a CWA cannot give.
We CAs are also clear that the CA area is a restricted area. Everybody is NOT welcome. Right of admission to anyone is only at our terms and at our pleasure. We don’t want advocates, CWA’s, CSs, MBAs and all and sundry others to gatecrash into our field. We also don’t like it when they start claiming equality with us and we are perfectly and legally entitled to do so under law. Since we don’t trespass into their territories, we expect the same courtesy from them. Those of you who can understand this will do so, the others can continue to shout. (From outside the gate)
We CAs carry on with our work quietly and without hindering or causing inconvenience to anyone. Unlike the Bar Council elections, where one sees only hooliganism and rowdyism, our council elections go unnoticed. We don’t hold our clients to ransom by frequently going on strike and we don’t gang up together and boycott courts/tribunals and hinder justice. We don’t pelt stones at policemen and stop others from going about their work. We pay our taxes and repay loans taken promptly which the advocates don’t. Have you ever wondered why most of the Credit Card and Finance companies have advocates in their black list???
Finally, it is not just the Government and the Indian Public that have recognized the merits of the CAs but even the International community also. This is why, whenever someone wants to travel abroad, the Embassies of countries like USA, UK etc ask for a Certificate from a CA only about the Financial ability of the person. These countries don’t trust anyone else.
Therefore, Mandeep, you are not fooling anybody here by making tall claims that the society and the Government will benefit by allowing Non CAs to do what they are not competent to do. When you say this, you are saying it purely out of your personal interest and nothing more. You want a share in the cake by any means and if you can’t get it, you seem to be determined at least to spoil the CA’s share.
sir,
the 44AB should not be used as a revenue genration procedure by the CA’s.Because the arguments by CA’s it is very clear that the right to sign the 44AB is for their revenue generation.Kinldy note that once the 44AB audit reprot is enclosed to return of income such returns should not be taken up by scrutiny and no additions should be made u/s 143(3) assessments.If this is not happening what is the use of 44AB audit reports.This is the right time that the section should be scraped for individual and small partnership firms assesseess and should be continued in case of LLP and coporate sector.The qualaification report of the CA should be used by the departments for revenue genaration.Due to technology development and use of the same in accounting and audit even the engineears with accounting knowledge may also be used by the department to crack the techological bottlenecks in accounts as the traditional vouching and traditional audit have no meaning in these years of computerised accounting.Let the CBDT and the Finance Ministy decide this.The more and more knowledge in accounts means more and more tax (planning) problems.Vodaphone is the best example of it.So,kindly stop agruments on this and leave it to the CBDT to think if it can.
In continuation……
Tax Auditor is remunerated by assessee & not by ICAI
or the Income-Tax Deptt. In this situation, how come
tax auditor report concluded wrong claims to the Deptt.
Ganesh Sir,
Ultimate defense against the persons arguing in favour
of CA’s in this blog is as under:-
1. There is no such Certificates/Reports in any country,
revenue side in particular.
2. Because of confining Certificates/Reports only to CA’s,
Non-CA’s are not entering tax profession to propagate
tax laws of our country, on the other hand ICAI think
that it is Medical Council & not providing requisite output.
By this Govt. is deprived off from collection of optimum
revenue.
3. Non-CA’s are also authorised to practice Income-Tax law. In view
of tax audit clause, they have to roam around in search of empty
slots of CA’s signature during due date for filing tax audit
returns, which is a peculiar situation prevailing only in India.
4. Since introduction of tax audit in 1984, there is no single
instance to show that Deptt. has utilised the same to conclude
quality assessment. If Deptt. show such instance, I will drop
out from tax profession.
MINISTRY FINANCE, MINISTRY OF CORPORATE AFFAIRS & CBDT SHOULD
SERIOUSLY CONSIDER THE ABOVE POINTS WHILE FINALIZING DTC
Mr. Ganesh ji
you didn’t give answers by leaving behind there personal
interest.
You didn’t answer as a common man.
sir you answered in capacity of chartered accountant.
sir pl read three things before answer as mentioned in comment.
2 JUNE 2013 AT 1.59 AM
SIR AS PER MY KNOWLEDGE, ADVOCATE BSK RAO HAVE VAST KNOWLEDGE IN TAXATION LAWS & OTHER INDIAN LAWS INCLUDING ACCOUNTANCY.
MR. BSK RAO’S EVERY WORD HAVE LOGIC.
Dear Mr.
Raghav ji.
section 288(2) of income tax act doesn’t give importance to word” Specialty” in any filed.
Main object of advocate profession is “practice of law”. they have specialty in filed of law & according to this there was no need of section 288 in income tax act.
section 288 is a big exception for word “specialty” according to this section our ministry of finance have cleared there is no need of specialty in any filed under income tax law.
then why CA’S are uproar for audit reports on behalf of specialty. For this section 288(2) of income tax act should be applicable without any bias.
sir it is clear, entry of these reports under income tax act, due to only political backup without any necessity.
there shouldn’t be any bias with other professional on behalf of specialty.
AUDIT REPORTS UNDER INCOME TAX ACT SHOULD BE TREATED AS PRACTICE OF LAW.
Respected Mandeep Singh Ji,
You mean to say that if a person could find any specialist doctor in his nearby locality then he should go to a chemist(in his nearby locality) and ask him to do the operations/surgery of the body??
Only motto of ICAI is to provide full employment to its members at any cost. In fact, ICAI wants that all members get bank branch audit work. ICAI being both regulatory authority & examination conducting authority for CA course, it maintains low output of members for market demand. This is the crux of the matter causing strict hurdle for compliance U/s 139 of Income-Tax Act, which no one can understand. Even the Ministry of Finance can not understand this.
THIS QUESTION IS TO FINANCE MINISTRY
When CA’s commenting in this blog admit that CA Course is very tough & percentage of out is very less. How come the Govt. gets revenue, when it confines powers of certification in taxation laws to only CA’s.
In this blog, Non-CA’s are not trying to seek power to sign 44AB report. Here the question is withour 44AB report compliance can not be given U/s 139. Even holding it can be given, assessee is at the risk of penal provision.
In conclusion, importance given to tax audit U/s 44AB of Income-Tax Act, because of heavy penal provision, CBDT is not getting compliance U/s 139 of Income-Tax Act.
PROOF FOR STRICT HURDLE FOR COMPLIANCE U/S 139 OF INCOME-TAX ACT
Hitherto audit of Co-Operative Societies & Banks in Karnataka were undertaken by Govt. Auditors appointed by Dept. of Co-Operation. For the financial year 2012-13, Co-Operative Deptt. of Karnataka allotted audit work of such Co-Operative Societies & Banks to Chartered Accountants, each getting not less than 20 audit assignments with fees ranging from Thousands to Lakhs. I am afraid that Income-Tax Deptt. will not definitely get empty slots of CA Signature for Tax Audit U/s 44AB of Income-Tax Act, that relates to financial year 2012-13 to meet compliance of return filing U/s 139 of Income-Tax Act for Non-Corporate assesses in Karnataka
See link sahakaradarpana.kar.nic.in for proof
DEAR CA FRIENDS YOU DIDN’T GIVE ANSWERS TO MY EARLIER QUESTIONS
on 2nd JUNE 2013 AT 1.59 AM. Pl give to answer those questions.
Mr. Balu & Anand Ji.
Question. 2
If value of audit reports BIG ZERO then why advocates are
demanding to sign the audit reports?
Ans: Sir answer of this question based on two aspects:-
1) If we take favour of only assessee.
(i) If we take favour of only assessee then I strongly in favour to
delete provision u/s 44AB. Reasons for this:-
(a) It is only financial burden on assessee.
(b) These reports have lost faith of assessing officers that’s reason
lot of cases are selected out of cases audited u/s 44AB during
scrutiny & survey. Due to that assessee suffered from huge
financial loss.
( c) Shortage of chartered accountants compels assessee to visit 60
to 100 Km in rush days by wasting money & time.
(d) If department totally relied on such reports then I confidentially
say that lose 90% it is revenue just in 3 years.
2) If we take favour of advocates & partly of assessees.
(i) Then I strongly in favour that Ministry of finance & CBDT not behave
as a step mother with Non CA Professional as explained in my earlier
comment.
(ii) shortage of CA in particular area waste more money of assessee. If
such power is given to other professional then assessee have option
& not need to travel 60 to 100Km for audit their accounts.
(iii) If you are not agree that assessee travel more than 100 km to get
audit his accounts then you can confirm regarding this from income
tax department.
Ganesh Sir,
CA’s territory is to conduct audit of financial accounts only as per their
statute & not to interpret law. In Form No.3CD tax audit report, information
about wrong claims have to be reported on interpreting Income-Tax law to enable AO to conclude quality assessment. Then, how come it becomes CA’s Territory & hence the matter requires debate. Further, majority of the cases selected for scrutiny by the Income-Tax Deptt. on date are all such tax audit cases only & there is no action on CA’s U/s 277A in cases of additions sustained in appeal. I press CBDT to take action on such cases.
Agreed with Ganesh and Balu & Anand;
that if report u/s 44AB is of no use then why advocates are claiming that they should be authorized to sign such report???
And also, if report u/s 44AB is of no use then why advocates are claiming that authorizing them would increase the revenue base of Govt. of India????
And if advocates should be authorized u/s 44AB then why CAs should not be authorized to represent assessees in Court of Law?
We have personally experienced that when any advocate represents any assessee in court for Income Tax matters, it is actually the CAs, behind those advocates, who prepare the case files and explains the facts and circumstances of the case to the advocates.
Dear Mandeep singh ji,
You have mentioned that so many cases selected are Audit cases. Its because of the qualified reports by CAs, the assessing officers (or the system for that matter) could select the cases for scrutiny.
CAs are also doing a mistake by signing the reports of accounts audited by Non-CAs. The CA Institute should restrict such acts by the CAs first.
There are CA students who work and write CA exams for more than a decade without being able to pass the exam. As per your argument, if Advocates with 10 years experience are well versed in taxation, will they be automatically be awarded the degree ACA?
Specific clause of an Act always overrides the general clauses in other Acts. Advocates Act prescribes “Practice of Law” whereas the Income-tax Act restricts such persons from certifying 44AB reports. The intention of the legislature is that such things should be done by CAs only and hence, such clause.
Likewise, The Cost and Works Accountants (Amendment) Act, 2011 specifically restricts the Management Accounting area to CMAs. When CAs respectfully accept such things and also that of secretarial practice by CS, it is surprising to see other professionals (presuming other practitioners are really qualified professionals of ICSI, ICAI, BCI) trying to come inside CAs territory.
If Non-CAs think that 44AB should be deleted or amended to extend the signing powers to other professionals, then, the Govt. should also take steps to allow CAs to represent in High Courts and Supreme Courts for Taxation matters which will really reduce the financial burden of the assessees (As against the financial burden of Tax audit fees mentioned by Mandeep singh ji which is very meagre when compared to fees charged by the Advocates.
For most of the cases, it is the Chartered Accountant who is providing the details and merits of the case to the Advocates.
If CA’s claim superiority over CMA’s, why legislature reposed confidence
on CMA’s to vest the power of working in the area of Management Accounts
to CMA’s in The Cost & Works Accountants (Amendment) Act, 2011
phrases are separating to each other automatically. pl read carefully.
Mr. Balu & Anand ji,
Sir I am agree that chartered accountants are recognized class for practice of Accountancy as per section 32 of Chartered Accountant Act 1949.
As Like Advocates are only recognized class for practice of law u/s 29 of Advocates act 1961. word ”Practice of Law” covers all Indian Law including income tax act 1961.
Word “ Accountancy” u/s 32 of Chartered Accountant Act 1949. Only covers accountancy practice instead of “Practice of Law”
Sir now I come to the point that how can advocates entitled to sign on audit reports.
There are following replies to your questions.
Q. 1 how can advocates entitled to sign on audit report ?
Medical profession – only for doctors.
CS profession – Company Secretary
Architect profession – only for architect
Advocate profession – For “practice of law”
Chartered Accountant profession – Practice of Accountancy.
Ans: 1) Sir Section 288(2) is an exception for above mentioned specialist
professionals.
If talking of “specialty” then there is no need of section 288(2) of
Income tax as per
other laws in India. Because everybody knowing very well who are law
professionals.
2) there should be no bias with other representative on world “
specialty”.
3) If you opt specialty then section 288(2) of income tax act & other tax Laws must
be deleted.
4) Any Advocate more than 10 years in the filed of taxation laws is well
conversant of accounting system which is required for tax audit u/s
44AB than a chartered accountant who is new comer instead of three
years training with CA.
otherwise leave world “specialty” in any field till section 288(2)
present in income tax act. It is time, Indian government & CBDT must
leave step mother treatment with other authorized persons.
Now please give answer to my questions
Thanks
Please go through the Pass % result of ICAI since last 10 years you will guess the difficulty to qualify CA course. Now do not tell only bright and brilliant students are joining CA course
Article by author CA’S certificates are strict hurdle to increase genuine base of tax law & u/s 44AB audit report is one out of such certificates.
But this article not accepted by CA’S, their own personal interests are main Barricade for this.
My CA friends pl do following things:
1) Pl forget for some time that you are a Chartered Accountants.
2) Pl come forward out of their own personal interests.
3) Pl take swear of God.
& now please give answer to my following question:-
1) Please tell me, Audit Report u/s 44AB have reduced any burden from
Assessing officers. If you think yes then pl tell me, why so many cases
under scrutiny selected from audit cases?
2) Do you think these reports for the beneficial to increase revenue of
Government?
3) Do you not think, these reports are extra financial burden on assessee?
4) Do you not think, there might be political reasons to introduce audit u/s
44AB.
5) Please tell me, what is reason assessee financially torched, if he not get
audit there accounts from CA.
6) Sir please tell me, why penalty for not filling Return only 5000 & not get
audit their accounts it amounts to 150000?
MR. BALU & ANAND JI & ALL MY CA FRIENDS
PL MUST GIVE REPLIES. IN WAIT YOUR KIND REPLIES.
MR. BALU & ANAND JI
FIRST OF ALL, I WANT APPRECIATE YOU FOR VERY GOOD KNOWLEDGE OF ACCOUNTS & TAX LAWS.
SECONDLY,I WANT TO EXPLAIN,HOW CAN WE INCREASE TAX BASE, IF AUDIT POWER
GIVEN TO TAX ADVOCATES. FOR THIS FOLLOWING ARE REASONS:-
1) ADVOCATE PROFESSION COMMONLY KNOWN TO EVERY PERSON OF INDIA & WHOLE WORLD.
IT DOES NOT MATTER HE WAS A RICH OR POOR PERSON,HE IS A WELL EDUCATED OR
ILLITERATE.
2) EVERY PERSON PREFERRED TO ADVOCATE,WHEN MATTERS DEALS TO ANY LAW OR
TAXATION LAWS IN INDIA & WHOLE WORLD. ADVOCATES ARE KNOWN AS A ONLY LAW
PROFESSIONAL CLASS BY INDIAN PEOPLES.
3) CA PROFESSION TILL TODAY NOT KNOWN BY 80% OF POPULATION OF INDIA.
INSTEAD OF HARD WORK BY ICAI TO POPULAR THEIR MEMBERS BY INTRODUCING SUCH
KINDS CERTIFICATES & TAKE SHELTER OF “PRACTICE OF LAW” FOR POPULARITY OF
THERE MEMBERS ON MERE WORD “APPEARANCE” UNDER VARIOUS TAX LAWS.
4) IF YOU WANT CONFIRM IT. PLEASE GO TO VILLAGES & ASK PEOPLES,WHO ARE CA’S &
THERE WILL BE COMMON ANSWER WHO ARE CA’S, WE DON;T KNOW.EVEN THAT WHOLE
URBAN PEOPLES ARE NOT KNOWN TO CA’S.
5) ASKED ABOUT VAKIL, EVERYBODY WILL TELL YOU, WHERE ADVOCATES HOUSES ARE
SITUATED EVEN THAT THIS QUESTION YOU CAN ASK FROM CHILDREN.
6) AS LIKE MORE WORKERS OF ANY PARTY LEADS IMPORTANT ROLE TO WIN ELECTION, MORE
PROFESSIONAL MORE REVENUE.
7) ON THE PART OF ASSESSEE, I STRONGLY IN FAVOR TO DELETE PROVISION U/S 44AB.
BDKRAO Sir,
Even holding Section 288(2) appearance clause required in the statute book of Income-Tax Act, following points should be considered by CBDT to authorise Non-CA Tax Professionals to sign off Certificates & Reports in Income-Tax Act:-
1. They are also authorised to prepare return of income & represent the assessees U/s 288(2) of Income-Tax Act read with Rule 12A of Income-Tax Rules
2. Once authorised to prepare return & represent the assessee, it is presumed that such persons posses the knowledge of Income-Tax law read with Section 145 of Income-Tax Act.
The above two points can not be disputed to grant authority to sign off Certificate/Reports in Income-Tax Act Sir.
ICSI, ICAI (Cost) & BCI if they are hearing this hue & cry, should take necessary steps in the matter.
Legislature provided special class of persons to practice law in Advocates Act. Hence, separate clause for appearance by third person U/s 288(2) not required in Income-Tax Act. As a proof of the fact, there is no such appearance clause in any other statute under Indian Constitution. On the behest of ICAI, CA’s 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 in numbers on date. Due to mandatory CA Certificates in Income-Tax Act, Tax Advocates find it very difficult to practice & propagate Income-Tax law & are forced to bow down before CA’s frequently, which is against the proverb Noble Profession. If Bar Council of India is ALIVE on date, it should consider the issue in question seriously & take necessary steps in the matter.
When Legal Practitioners are the only class of persons entitled to practice law U/s 29 of Advocates Act, 1961 there is no justification for prohibiting them to issue Certificates/Reports under Income-Tax Act. This also well supported by SC verdict in the case of Bar Council of India Vs A.K.Balaji
[SLP (Civil) No(s) 17150-17154/2012 Dt.04.07.2012]
Mr Malikarjun Dev Ch. Adv.
Thanks.
Mr BSK RAO JI
YOU HAVE CORRECTLY EXPLAINED ALL AUDIT REPORT U/S 44AB IN ONE PARA. I APPRECIATE IT.
I FULLY AGREE ADVOCATES & OTHER PROFESSIONAL FULLY COMPETENT TO SIGN ON AUDIT U/S 44 AB.
I ALSO APPRECIATED MR. PRAKASH. HE EXPLAINED VERY WELL, IT SHOULD BE LEAVE ON ASSESSEE TO WHOM, HE WANTS TO APPROACH.
SIR I AM NOT AGAINST ANYONE, BUT OFTEN, I FED UP FROM INDIAN SYSTEM. HERE SUCH THINGS HAPPEN WHICH HARMS TO INDIAN PEOPLE AS WELL AS DEVELOPMENT OF COUNTRY. BUT OUR LEADERS DIDN’T GIVE ANY INTENTION.
SCANDAL SCANDAL SCANDAL
ACCOUNTS ARE AUDITED BY A CHARTERED ACCOUNTANT.
ANYBODY, ANY POLITICIAN, FINANCE MINISTER , PRIME MINISTER, MRS SONIA GANDHI OUR YOUTH RAHUL GANDHI JI & CBDT WILL TELL ME. WHAT IS BENEFIT OF SUCH REPORTS WHICH S HAVE RELATION WITH SCANDALS.
I THINK NOTHING WILL BE CHANGE IN INDIA.
MR. BSK RAO JI
IF WE SPEAK TRUTH, IT MUST PINCH TO OTHERS IN INDIA.
” PUNJBI WORDS” DILA KAHNU SAACH SAACH REHNA EH PUKAR DA, TEHNU EH INDIA VICHO NAHI LABNA.
sir,
a person who is suffering from a cold or fever is at liberty to go to any doctor like Homeopathic,Ayurvedic,alopathy,nature cure or to a hakkim.so kindly allow a tax payer to select CA, advocate,ITP or (OFFICER of IT DEPT.,)kindly do not put a restriction on the freedom of the TAX PAYER for your quality/audit/accounts/tax/accounting standards knowledge which can not be understood by a common tax payer expect that of ******************** etc. etc., Why you are entering in to the freedom of the tax payer?The CBDT should think in this line and should accept the truth that the 44AB has never reduced work load of the scrutiny assessments nor has increased the revenue, except the waste of paper/time/money
sir,
If CA’s are so experts in audit and accounts, why all the accounting frauds like Sathyam,2G,Common Wealth Game,and other corporate scandels have happened?Why Sharada,Sahara and so on….if the fee of the CA is good all the accounting frauds are coveredup in the audit reports.Why the CA are so much dependent on the certification work under income tax act when the whole world of Accounts and Aduit is so wide open for them, let the CA concentrate on more ethical practice of the Accounts and Audit and leaving all other miscellaneous work like 44AB and appearing before the income tax authorities to other non-ca professionals.Let the CA write more and more QUALAIFED audit reports of the corporate sector and thus acting as a coustodian of the PUBLIC INVESTMENTS AND MONEY
A portion of this article : As per Mr.B.S.K.Rao,
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.
If this the case, then why qualified Cost Accountants find it tough to pass even intermediate level of CA examination when both the syllabus are same?
Apologizing for drifting away the subject matter of this thread. Some comments now attribute the confidence of Finance Ministry and General Public on CA profession for Accounts and Tax matters etc… those who claim the so called confidence please introspect and think the public perception post Global Trust Bank, Satyam fiasco. At the same we know that if the statutory financial audit is allowed for Non-CAs such incidence would not happen. But to accept the mistake is a mark of humility that prevents the repetition of such incidents. Not to accept the BLUNDER is a sign of an ARROGANT. When it comes to prevent their turf the lobby of ICAI is legendary. Both at central and state level. Some of the Union minister/s and MPs at Rajya Sabha or Lok Sabha are CAs both in ruling and opposition party. In recent past their tarnished and backdoor politics in the name change of erstwhile ICWAI is well known. The fear of encroachment by other Institute/professionals in statutory financial audit is the reason some CAs spit venom and pass derogatory comments on that Institute/profession. Never worry as said the lobby of ICAI with MoF and MCA is so strong that in near future there is hardly any chance unless they themselves create a situation where the so called confidence is shacked in the form of a financial scam. We salute the accomplishment of CAs in other areas and their contribution to the society. At the same time the so called confidence on CAs is all illusion.
MANDEEP SINGH SAB,
I too agree accounting systems are made complicated to create more scope for professionals, so that assesses are forced to approach tax professionals.
Among Cash, Mercantile & Mixed System of Accounting, Mercantile System reflects true profit or loss of business enterprise. In this system all expenses relates to the year, whether paid or payable are debited to Profit & Loss A/c & payable portion shown in liability side of Balance Sheet, similarly all income relates to the year, whether received or receivable are credited to Profit & Loss A/c & receivable portion shown in asset side of Balance Sheet. Further, expenses incurred in advance & income received in advance are shown in asset & liability side of Balance Sheet respectively. If tax professional understand this basic principle, no other accounting standards are required to compile accounts of business enterprise. Now my question is why CBDT is unable to understand this point ?
Sir, I welcome the meaningful reasoning given all the way during these discussions by our learned friends BSK Rao, Manideep singh and Prashanth. it is not the question of superiority of any profession. But only legitimacy and efficiency of individual professionals in perticular area of practice. Ramjethmalony Charges more means it shows his expertise but not greediness. Hon’ble NA Palkiwala, who is all time Legend on Taxation and Constitution is an Advocate. Let our Non advocate Tax professionals, CAs in perticular, not blame that Advocates are not trust worthy to general public. We are not saying that CA friends are not experts, but we only emphasize on the taxation knowledge of Advocates is also sufficient for signing the Tax Audit reports. Frankly speaking, practically the audit reports under 44AB have become redundant and not useful in any way in tax assessments. Pl understand the naked truth in the observations sportively.
MR. BALU & ANAND JI,
ADVOCATE ACT 1961 REGULATES PRACTICE OF LAW BEFORE COURTS & OTHER AUTHORITIES. PRACTICE OF LAW BY ONLY RECOGNIZED CLASS OF LAW PROFESSIONALS. IT IS ALSO A WELL SETTLED RULE EVERY LAW IS BASED ON ANOTHER LAW.
INCOME TAX LAW ALSO BASED ON OTHER LAWS MENTIONED BELOW:-
1 CPC 2. CRPC 3 EVIDENCE ACT 4 IPC SECTION 193 OF IPC BASED ON EVIDENCE ACT 5. LAND LAW OF CONCERNED STATE FOR PRACTICE OF LAW ON AGRICULTURE TAX MATTERS ETC.
MERE “APPEARANCE” WORD IS NOT AMOUNTING TO “PRACTICE OF LAW” AS MENTIONED IN ADVOCATES ACT.SO FOR SECTION 288 OF IT ACT NOT GIVE FULL PLEDGED RIGHT TO NON ADVOCATES FOR PRACTICE OF LAW.
MR
RAGHAV GOYAL
i ALSO TOO HEARTILY APPRECIATE YOUR KNOWLEDGE ON TAX MATTERS, OTHER MATTERS, WRITING & YOUR INTELLIGENCE !!!
SIR COMPLICATED ACCOUNTING SYSTEM IN INDIA IS CREATING STRICT HURDLE TO INCREASE GENUINE BASE OF TAX LAW.
NOW IT IS TIME GOVT. DECIDE, IT WANTS REVENUE FOR THE DEVELOPMENT OF COUNTRY OR REPORTS U/S 44AB.
i ALSO THINK, IT IS TIME TO COME OUT THEIR OWN PERSONAL INTERESTS & DO SOMETHING FOR COUNTRY & INDIAN ASSESSEE.
MY ALL CA FRIENDS, OFFICERS OF INCOME TAX DEPARTMENT, OUR GOVT. LEADERS & EVERYONE KNOWING VERY WELL THERE WAS NO NEED OF REPORTS U/S 44 AB FOR TAX COLLECTION.BETTER TAX WILL BE POSSIBLE IF SUCH REPORTS DELETED FROM INCOME TAX ACT 1961.
BUT THEN, IT HAPPENS IN INDIA
Prashant Sir,
Please make slight correction,
I HIGHLY APPRECIATE COST ACCOUNTANTS INSTITUTE, THAT BOOKS OF ACCOUNTS OF THE INSTITUTE OF COST ACCOUNTANTS OF INDIA HAS TO BE AUDITED BY COST ACCOUNTANTS ONLY. THIS IS AS PER THEIR STATUTE.
HATS OFF to Balu and Anand for the points raised!!!
And heartily appreciate the decent writing of Mandeep Singh!!!
AND BSK ROA ji, YOU ARE REQUESTED TO GIVE THE ANSWERS TO THE POINTS RAISED BY BALU AND ANAND POINT BY POINT.
EVERY INDUSTRIALIST AND EVEN A COMMON CITIZEN WOULD LIKE TO READ THE COMMENTARY OF SENIOR ADVOCATE ON SUCH POINTS.
Thanking you!
Balu & Anand Sab
Kindly provide me your e-mail address to meet your needs
Prashant Sir,
I am impressed by your comments in this blog. Kindly provide me your e-mail
address
Balu & Anand Sab,
In continuation…. To avoid the situation mentioned earlier, my request
before the Govt., either retain only CA’s for Income-Tax Practice or delete
certificates from only CA’s in Income-Tax Act or authorise all tax professionals
to furnish certificates in Income-Tax Act
Balu & Anand Sab
In fact, I am handling around 60 to 70 tax audit cases every year. I can not assign the whole 60 to 70 tax audit cases to a single CA, because of ceiling. Therefore, I have to roam around in search of empty slots every year at the time of due date for filing tax audit returns. This is the practical situation prevailing on date in my case. Now, you don’t feel that this situation is typical one, prevailing only in India to pay taxes due to Govt.
The self glorification of CAs is worth emulating. They tom tom that general public have not faith on other professionals w.r.t. to TAX and ACCOUNTS hence come to a CA. The question is do public have any alternatives provided by law. Believe it or not to file an ITR for salary or rental income most of the assessees do it on their own. May be due to time constraint or lax attitude some may approach CAs. The question is not the public faith or confidence but the hype created over a period of time that only CAs are tax or finance expert. This hype is ably supported by this section 44AB which compels the public to approach a CA.Now let us have a situation where this section is removed or the definition of Accountants U/S income tax act is broadened. And see whether public has faith only on CAs or other professionals also. It is ironic that even the Books of Accounts of ICSI and ICAI (Erstwhile ICWAI) is audited and certified by CAs despite these 2 Institutes produce excellent Finance and Accounts professionals. Again this is to comply the Law 🙂
no doubt ca had great mind, knowledge and power…….. but some ca do corrupt practice and encourage corruption they should also be brought under the scanner. hence it is true they are surgeon in their field and do surgery to hide……….. taxable income.
Balu & Anand Sab,
Audit means verification, depending on the purpose they are classified as Energy Audit, Environment Audit, Product Audit, Process Audit, Pollution Audit, Legal Audit in USA & Tax Audit U/s 44AB of Income-Tax Act. As per Para No.17.2 of CBDT Circular No.387/6.7.1984, audit U/s 44AB is a Tax Audit. Here, person conducting audit should be specialised in that subject. Hence, the word audit is not the domain of only CA’s, only Advocates should be authorised to furnish report of Tax Audit U/s 44AB. If other than Advocates are authorised to furnish such report, it amounts to practice of law in contravention of Advocates Act, 1961 liable for imprisonment which may extend up to 6 Months U/s 45 of Advocates Act (See SC & Madras HC Verdict for details)
Dear sir
I didn’t have personal animosity with any profession, I explain such things which happens in society. Every profession have its dignity in india. I am saying about some members who doing such practices.
mr blue & anad
It is not need to surprise as reply to 3 &4 para of your comment
sir all persons are doing practice of law u/s 288 of income tax act including chartered accountants. fOR WHICH ONLY ADVOCATES ARE PROFESSIONAL AS PER SECTION 29 OF ADVOCATES ACT 1961. PL TELL ME WHAT is wrong if all can issue reports u/s 44 AB