To,
The Chairman,
Central Board of Direct Taxes,
New Delhi.
Dear Sir,
Re:-DEFERMENT OF New Audit Report To Assessment Year 2015-16.
Sir, the new format of tax audit report in Form No. 3CA, No. 3CB and No. 3CD through Notification No. 33/2014 dated 25/07/2014 were introduced on 25th July 2014 and are made applicable on the same day. In this respect we want to state some of the facts as under:-
1 AUDIT ALREADY COMPLETED BUT NOT UPLOADED:-.
The financial year preceding to the assessment year 2014-15 was ended on 31/03/2014 and audits for this year were started at any time after that date and completed before 25/07/2014 but the audit report are not uploaded on the IT site. Banks, Insurance Companies, PSUs and other assesses are included in this list. Now the auditors have to revisit them and collect the fresh information as incorporated in the new format.
2. FORMATS SHOULD BE INTRODUCED ON OR BEFRORE 31/03/2014
For assessment year 2014-15 the formats should be introduced before 31/03/2014 so that auditors can plan their work in advance and if there is an urgency and need to incorporate more information in the Format then the same should be planned in advance and if there is a delay in drafting, formation and introduction of the same then the very simple and reasonable solution is to make these formats applicable from the next assesseement year which in this case is Assessment year 2015-16.
3. ICAI HAS ALSO REQUESTED POSTPONEMENT
The Institute of chartered Accountants of India (ICAI) , established by an Act in Parliament , is the regulatory body for matters concerning the Audits in our Country and it appears from the representation moved by ICAI to the Hon. Finance Minister, Revenue Secretary and your good self , as mentioned on the website of ICAI www.icai.org that this apex body was not even consulted before midyear introduction of these formats since ICAI has also requested all the concerned authorities including your good self to postpone these formats for one year. Since the matter is connected with Audits hence the views of the ICAI should be given proper attention and respected.
4. NO SCHEMA SINCE LAST 23 DAYS
There are clear indications that the Midyear introduction of formats of audit report is not based on proper and basic preparation which is required and essential in this respect. The introduction was sudden but it is not explained anywhere that what is the urgency of such “sudden and midyear” introduction of these formats.
Sir since last 23 days there is no schema on the Income tax website with respect to these new formats of the audit report and this is the clear indication of the fact that it was introduced suddenly and without proper preparation. We are considered as the leading “Information Technology Nation” in the world and it is unbelievable for anybody to imagine that 23 days are not enough to prepare, test and introduce the schema for these formats. This is clear indication that there are “bottlenecks” in the system which has to be removed first and for this purpose planning and time is needed.
5. PLEASE REMEMBER 2013 CONFUSING EXPERIENCE
Sir, please take your time to prepare a proper schema and with proper schema introduce these formats and certainly this will take some more time. We have experience of changing and amending schema on weekly basis and sir this is not proper for the prestigious institution like CBDT. Here is the solution , please postpone these forms, consult ICAI for better and more practical format, prepare the schema , test it for bugs and debug it and make it foolproof and then make it applicable from assessment year 2015-16.
6. WHY TWO FORMATS FOR SAME ASSESSMENT YEAR
Since Some of the audit reports are already uploaded on the site of Income tax department before 25th July 2014 hence now there are two types of assessees during the assessment year 2014-15 and the second set of assessees are those whose audit reports were not uploaded before 25th July 2014 and here what is the logic to have two types of audit reports from different types of assessees in the same assessment year. The only reason of this “inequality” is that there are there are two sets of formats of audit reports in this particular assessment year 2014-15 due to this midyear introduction of Formats. The simple solution is that to postpone the New formats to assessment year 2015-16 and continue with the same (existed up to 25/07/2014) formats for all the assessees for the assessment year 2014-15.
7. GUIDANCE NOTE FROM ICAI- WILL TAKE IT’S OWN REQUIRED TIME
Sir, the audit work is not a “Mechanical work” and it requires expert knowledge, study and proper guidance from the ICAI (the apex body of auditors in India) and still “Guidance note” for the new formats for the audit report is not issued by the ICAI. Certainly this will require the consultation from the experts and it is also a task which will take its own time. The situation is created due to “sudden and midyear” introduction of the New formats and should certainly be avoided.
8. EXTEND THE TIME WITH EXISITING FORMATS- 2 MONTHS
Sir, the demand to defer the new formats to assessment year 2015-16 is a reasonable demand hence it is to be accepted by your good self as also demanded by ICAI but sir the whole exercise of this “midyear introduction” has created one more very serious problem which requires your immediate attention.
There is a confusion about applicability of the new formats because there is no schema on the web site of IT department since last 23 days and ICAI has also requested for its postponement to the assessment year 2015-16 hence the audit work and uploading the reports for assessment year 2014-15 has suffered seriously in all these 23 days and due to this loss of 23 days , more time is required to complete the audit in the existing formats (existed up to 25/07/2014) also hence your good self is requested to please extend the time up for uploading the audit report in existing formats (existed up to 25/07/2014) to 30/11/2014.
Thanking you
Yours faithfully
CC to:-
1._____________________________
2._____________________________
3._____________________________
4._____________________________
(The above draft been prepared by CA Sudhir Halakhandi based on Input received from member in Profession and can be used freely for representation to Various CBDT, Finance Ministry and with Other Government Authorities.)
TO,
TAX POLICY DIVISION,
CENTRAL BOARD OF DIRECT TAXES,
NORTH BLOCK,
NEW DELHI-110001
(1) Information provided by Directorate of Income-Tax (Systems) against application filed U/s 6(1) of RTI Act furnished to your good office. Herein, your good office will find particulars of Income-Tax admitted in return filed for the Asst. Year 2012-13 & 2013-14 that relates to ITR-1, 2, 3, 4, 4S, 5 & 6 both covered by tax audit & not covered by tax audit separately.
(2) Herein, learned officials in Tax Policy Division of CBDT will find that Inocme-Tax admitted as per return filed in ITR Form No.4S which relates to presumptive taxation linked to tax audit clause is just Rs 1,137/- crores & Rs 1,543/- crores for the Asst. Year 2012-13 & 2013-14 respectively.
(3) Because of inserting presumptive taxation scheme (Section 44AD) linking the same to tax audit clause (Section 44AB), resulted in unemployment of Non-CA Tax Professionals & full employment to Chartered Accountants.
(4)It has been recently observed by intelligent officials of Income-Tax Deptt. in Survey Wing that many dealers are invoking Section 44AD of Income-Tax Act to file their returns, keeping the turnover at below tax audit limit & are owning assets worth more than crores.
(5) In presumptive taxation scheme (Section 44AD), it is evident that the Deptt. is deriving revenue in the range of just Rs 1,000/- odd crores. Now the Deptt. should think that, is it fair to retain presumptive taxation scheme (Section 44AD) in Income-Tax Act to provide full employment to CAs, that too at the cost of Non-CA Tax Professionals.
THE FINANCE MINISTER ONLY BELIEVING THE CHARTERED ACCOUNTANTS AND NOT
THE ASSESSEE i.e TAX PAYER WHO IS ONLY PAYING THE TAX.ACCORDING TO GOVEREMENT
THAT THE CHARTERED ACCOUNTANTS ARE ONLY WELL VERSED WITH THE TAX LAW
AND WELL EXPERIENCED IN THE FIELD OF ACCOUNTANCY WHY THEN THE DUE DATE FOR
OBTAINING THE TAX AUDIT REPORT IS EXTENDED TILL 30-11-2014? SO SCRAP TAX AUDIT THROUGH ORDINANCE IMMEDIATLY TO AVOID UNNECESSARY FINANCIAL BURNDEN
ON ASSESSEE AND WASTE OF TIME.REQUSETING FOR EXTENSION OF TIME BY CHARTERED
ACCOUNTANTS TO FILE AUDIT REPORTS SHOWS THEIR INEFFICIENCY
EXPECTING FROM THE NEW GOVERNMENT THAT THE FILING OF INCOME-TAX RETURNS SHOULD BE SIMPLIED AND MAKE ASSESSEE THEMSELVES TO FILE THEIR RETURN OF
INCOME WITHOUT THE HELP OF PROFESSIONALS
Whatever suggestion ICAI (Financials) place before the Govt., it seems to be in the interest of the Govt. But in reality, it results in complicating the law & goes in the financial interest of its members ONLY. This is how ICAI (Financials)keep the Govt. in DARK ROOM.
Guidance on Tax Audit is practice of law, who authorized ICAI (Financials) to issue such Guidance Note on Tax Law Audit
In spite of following the Guidance Note of ICAI (Financials) since 30 years, CBDT could not get section wise wrong claims to conclude quality assessment, the very purpose of inserting the tax audit clause, as stated in CBDT Circular & e-filing project agreement. When members of ICAI (Financials) expertise in the matter & possess core competence, then why CAs want Guidance Note of ICAI (Financials) to issue Tax Audit Report in revised forms.
Correctly represented that New formate should be applicable from next year and old formate should be allowed. Extention of time required since the Schema of New formate even new formate is upheld and lot of of confusion are there
I THINK REVISION OF TAX AUDIT FORMS MAY ALSO RESULT IN UNNECESSARY FINANCIAL BURDEN ON THE ASSESSES. REASON BEING, TAX AUDITOR WILL CHARGE MORE FOR TAX AUDIT. AS PER THE INFORMATION RECEIVED FROM RELIABLE SOURCE, IN ONE COMPANY CASE, TAX AUDITOR HAS CHARGED Rs.18 LAKHS FOR TAX AUDIT IN BANGALORE. THIS IS A VERY GOOD PROOF TO SHOW THAT TAX AUDIT CLAUSE IS USED FOR MINTING MONEY WITHOUT ANY UTILITY TO THE GOVT.
I AM OF THE STRONG VIEW THAT IN THE PROCESS OF TAX AUDIT LOT OF TIME IS SPENT FOR DELETION TRANSACTION INVOLVING VIOLATION OF PROVISIONS OF INCOME-TAX LAW. AS THE AUDITOR IS APPOINTED BY INTERESTED ASSESSES, AUDITOR IS RESTRAINED TO REPORT WRONG CLAIMS. IT WAS ALSO HELD IN THE CASE OF G.M.DANDEKAR MADRAS HC AUDITOR APPOINTED BY INTERESTED ASSESSEE IS NOT ACCOUNTABLE TO INCOME-TAX DEPTT. (THIS DECISION NOT YET OVERRULED)
CENTRAL BOARD OF DIRECT TAXES REALIZED THAT DEPTT. CAN NOT CONCLUDE QUALITY ASSESSMENT ON UTILIZING TAX AUDIT REPORT. IN THIS SITUATION, I SUGGEST CAS NOT TO TALK ABOUT QUALITY OF TAX AUDIT & CORE COMPETENCE OF CAS IN THE MATTER.
Avinash Rawani Sir,
Against RTI Application filed before DIT(Systems) for seeking information about total of section wise wrong claims reported in Tax Audit Certificate uploaded to e-filing website, in respect of return filed in ITR-4,5 & 6 for the Asst. Year 2013-14, DIT(Systems) could not provide the same. How come you talk about quality in Tax Audit Report furnished Sir.
All the efforts are in vain as there is total silence from CBDT. The time is running making life of professional miserable. It would be practically difficult for an Auditor to complete the work in specified time. Even if the extension is received staff will be on leave and festivals will be there during this time. A conscious decision needs to be taken that all the ammendments required to be complied with needs to be informed well in advance before the commencement of the financial year so that the work is properly planned and executed in proper way so that the purpose with which work is done has quality value and satisfaction of the work done
Sir ,Ponits well drafted .Hope the representations made by the masses help in getting extended time well deserved.
Absolutely unpredictable and unorganized decision taken by CBDT. Every professional has to take a firm stand and oppose the change which is not reasonable. We have to equcate the parties and tell him to submit information trelated to new form requirement. ALL PROFESSIONAL BODY HAS TO TAKE FIRM STAND AND NOT TO BILE ANY REPORT UNLESS DIFFER IT FOR REASONAL TIME.
Absolutely unpredictable and unorganized decision taken by
I THINK IT IS THE RIGHT STEP FORWARD IN THE EVENT OF DELETION OF SECTION 288(2) FROM THE STATUTE BOOK OF INCOME-TAX ACT. BECAUSE PRACTICE OF LAW IS THE PREROGATIVE POWER OF ADVOCATES, CAN NOT BE DISPUTED BY ANYBODY.
MANDEEP SINGH SIR, DO YOU MEAN TO SAY TAX AUDIT CLAUSE WILL BE DELETED FROM THE STATUTE BOOKS OF INCOME-TAX ACT/DIRECT TAXES CODE
IF ICAI (FINANCIALS) SERIOUSLY & HONESTLY INTROSPECT ITSELF, IT SURELY WILL BE GUILTY OF ALL THE GOOD THAT IT WAS CAPABLE, BUT DID NOT DO. FOLLOWING ARE PROOF FOR EACH EVENT:-
1. Wrong amendment carried out in 2nd Proviso to Section 44AB of Income-Tax Act in Finance Act, 2001
2. Representation for concern of expanding the definition of accountant in DTC-2013 even though CAs are not disturbed.
3. Mandatory upload of tax audit report without evaluating its utility for the purpose it was inserted in 1984.
4. Linking Section 44AD of Income-Tax to Section 44AB of Income-Tax Act taking away the whole Income-tax practice from Non-CA Tax Professionals.
5. Recent observation of Madras HC about functioning of ICAI(Financials)& latest decision in competition act….
Our Central Govt. should revalue the wealth of ICAI (Financials), it will find that it stands first in the row of wealth compared to other professional bodies in India.
Please wait & watch next action of CBDT. I am strongly in favor audit reports for Non-corporate sector need to be omitted. These reports till today present in income tax without evaluating its output since 1984. irrespective that these are strict hurdle to widen genuine tax base, unnecessary financial burden on assessees & wastes of time.
THERE IS GREAT UNCERTAINTY OF FORM 3CD REQUIREMENTS. HENCE AUDIT WORK HAS SUFFERRED. THE PLANS HAVE BEEN TOTALLY UPSET. NOW A DAYS , THERE ARE NO. OF COMPLIANCES. WE HAVE TO WORK WITH WELL PLAN IN ADVANCE. NOW EVEN IF THERE IS EXTENSION OUR WORK PLAN WILL BE UPSET . WE WILL BE IN TROUBLE.
IT IS VERY MUCH REQUIRED FOR THE CBDT TO IMMEDIATELY DECLARE THAT THE NEW AUDIT FORM IS POSTPONED TO NEXT YEAR AND THE EARSTWHILE SCHEMA BE IMMEDIATELY ENABLED TO FILE AUDIT REPORT.
The extension of time will not effect any adverse.while it will help the assessee to file their return with Audit report smoothly.The CBDT maybe pleased and extend the date of return filing.
The extension of time will not effect any adverse.while it will help the assessee to file their return with Audit report smoothly.The CBDT
I think this is truth which is drafted & I hope it will be applicable from A.Y. 2015-16 Or Give More Time means Extend the time
SINCE 1984, ICAI (FINANCIALS) WORKED WITHOUT TRANSPARENCY LOBBYING WITH MINISTRIES & BUREAUCRATS. I THINK IT IS BEARING FRUITS NOW ? NOW THE ISSUE INVOLVED IS TAX-ADVOCATES, CAS & PRACTICE OF LAW. I DON’T THINK SUCH ACTION OF ICAI (FINANCIALS) YIELD DESIRED RESULTS.