CA Sandeep Kanoi
We are producing below the extract from the reply of ICAI dated 29.01.2014 to CBDT in respect of Information Provided by Tax Advocate Shri B.S.K Rao and Shri Srikrishna to CBDT. In his letter Shri B.S.K Rao and Shri Srikrishna has raised the following issues before CBDT :-
In their opinion Tax Audit U/s. 44AB is not serving any purpose and not benefiting the Income Tax Department at all. He further submitted that there is a Shortage of CA’s and they have to search for the Chartered Accountants to get the Tax Audit Report signed in respect of Audit Conducted by them.
In response to Act of Non CA professionals of Approaching Chartered Accountants to get Tax Audit report signed from for audit not conducted by them ICAI has replied as under –
In fact, the act of Non-CA tax professionals for making an effort to approach a chartered accountant for getting signature for audit not conducted by him in itself is an unethical act which should be seriously viewed.
ICAI Reply in respect of Shortage of Chartered Accountants is as follows :-
Availability of tax Auditors for Non-Corporates:
Tax Advocates Shri B.S.K.Rao and Shri Srikrishna in their letters addressed to Committee on Petitions, Parliamentary Standing Committee dated 30th April, 2012 and Central Board of Direct Taxes dated May 14, 2012 stated as under:
“……. In case of Corporates, chartered Accountants are getting fees in the range of Lakhs, but in non-corporates cases, they get fees in the range of Thousands only. Therefore, CA’s make best combination of tax audit assignments to sign tax audit reports under section 44AB to yield Revenue.
2. Those Non-corporates assesses Rejected by CA’s approach Non-CA Tax professionals covered under section 288(2) to file returns u/ s 139. Non-CA’s have to search out for unused limits of CA’s in their area, to get signatures on their audit reports. Some CA’s holding unused limits will not sign for work done by non- CA’s but the clients insist us to do the job.
In Para No. 1 & 2 above, I have proved that CBDT is indirectly handcuffed by 59,472 practicing CA’s of ICAI in the matter of revenue collection…. “
With regard to the above allegation we wish to mention the following
a) As per the recent data provided to us by the CBDT. 16,16,096 tax audits have been conducted by 59,472 chartered accountants during the year 2010-11. An analysis of the said data clearly depicts that on an average a chartered accountant has conducted 27 tax audits. It may be noted that this number is well below the ceiling limit set by ICAI i.e. 45 audits per member. Therefore, the question of non availability of chartered accountants for conducting tax audits of non-corporates does not arise. It is further pertinent to mention here that there are adequate number of Chartered Accountants at all places in India and there is not even a slightest of whisper from any assessee that no Chartered Accountant was available to him so as to perfoi.iii his tax audit, even at Block or District level.
b) Section 288 of the Income-tax Act, 1961 talks about authorized representative. It clearly mentions that any assessee who is entitled or required to attend before any income tax authority or the Appellate Tribunal in connection with any proceedings under the Act may attend through authorized representatives. Further section 288(2) provides the definition of “Authorized representative” includes a chartered accountant and also a non Chartered accountant. It, however, no where mentions that this section makes Tax Advocates eligible, to conduct an audit or an audit under section 44AB. Intact, section 44AB allows only ‘an accountant’ defined under Explanation to section 288(2) to conduct the tax audit. The Tax Advocates have a limited role of appearing before the tax authorities on behalf of the assessees. Even if the client insists them to conduct audit, the Act does not authorize them to do so.
c) Tax Advocate Shri. B S K Rao and Shri Srikrishna have stated that non-corporate assessees approach Non-CA Tax professionals covered under section 288(2) to file returns u/s 139. It may be noted that return filing under section 139 is no where connected with tax audit. These are two different tasks. An assessee, the audit of whose accounts is not complete due to one reason or the other is eligible to file his income tax return to avoid interest and penalty, While, he may be ready to shell out penalty for not getting accounts audited within specified period. It is indeed heartening to note that sometimes the assessees are not able to differentiate between the domains of Tax Auditors and that of Income-tax Practitioners.
d) The distinction between audit fees charged from a corporate and a non corporate entity is not because of the status difference but because of the difference in the complexity of accounts, compliance of accounting standards and other statutory provisions involved therein. The audit fees to be charged depend on factors like volume of work. nature of transactions to be audited, complexity and extent of coverage etc.
e) A chartered Accountant would in no case accept the responsibility of audit not conducted by him. In case he signs the audit report in respect of accounts not audited by him, he shall be deemed to be guilty of professional misconduct under the provisions of the Chartered Accountants Act, 1949. The Chartered Accountants respect the confidence reposed by the Government in the profession and thereby abiding by their professional ethics they refuse to sign the audit report in respect of audit not conducted by them. In fact, the act of Non-CA tax professionals for making an effort to approach a chartered accountant for getting signature for audit not conducted by him in itself is an unethical act which should be seriously viewed.
f) Tax Advocate Shri B.S.K. Rao and Shri Srikrishna in their letters as aforesaid have mentioned that non-CA tax practitioners are being forced to do the job of the tax auditor. This is absolutely a wrong statement and without any base. In fact, no one can be forced to carry out a job, if one does not want to do it. Further, it may be noted that this action of doing audit by non-chartered accountants is illegal and against the provisions of the law. The non-CA tax practitioners are neither equipped ‘with knowledge to maintain books of account nor can appreciate the intricacies of the accounting system being followed and the compliance of various accounting standards. It is a fact that advocates. while studying law do not study the subject of accountancy and auditing , whereas a Chartered accountant has to undergo ,at all levels of the course, the subjects of Accounting and Auditing. A Chartered Accountant has to undergo rigorous practical training of 3 years as articles under experienced chartered accountants. The training covers all aspects of accounting, auditing. taxation, fulfillment of statutory compliances and so on. The very requirement of practical training is instrumental in shaping a well-rounded professional to ensure that students have an opportunity to acquire on-the-job work experience of a professional nature. Such a practical training inculcates a disciplined attitude for hard work; develops necessary skills in applying theoretical knowledge to practical situations; provides exposure to overall socio-economic environment in which organizations operate; and develops ethical values.
g) Conducting of tax audit by non-chartered accountants having no knowledge of Accounting Standards ,principles of accounting and auditing and procedures thereof would result into inaccurate computation of income, leading to leakage of revenue. While processing the data provided by the Income-tax Department in respect of tax audits conducted by chartered accountants, it was observed that a number of tax audit reports were filed by the assessees by quoting wrong membership details of the Chartered Accountants. The fact of alleged misuse of membership details of chartered accountants was also reported to CBDT vide letter no. DTC/2011-12/Rep-07, dated 16th December, 2011, Letter no. DTC/ 2012-13/ Rep-09, dated 15th June, 2012 and Letter no. DTC/ 2012-13/ Rep-19, dated 18th December, 2012. In this regard we wish to submit that this is an illegal practice being followed, which needs to be looked into. The possibility of this practice being followed in earlier years also cannot be ruled out as the tax audit reports were not required to be filed along with the return of income since the year 2008.
Download Copy of Reply by ICAI
Also Read – Tax Audit is exclusive domain of Chartered Accountants
Sir,
The BCI wants its members to conduct Tax Audit u/s 44AB of I.T Act 1961 whereas the ICAI is allowing members of BCI who pass the Final CA Exam for enrolment and to obtain certificate of Practice. If BCI really wants to help its members why BCI is standing on the way of the member Advocate who are also members of ICAI to obtain COP from ICAI and to conduct Tax Audit .
The reply of respectful members may be sent to [email protected]
g.giridhar
Finance department is permit to Tax advocates are Audit u/s 44 A B below the limit of One Crore Of Turnover . most of Tax Advocates are well knowledge about audit u s 44 A B
Dear Sir,
My one Clarification How much file in sign under section Audit 44 AB
in one C A
Inclusion of PCS and PCMA in the definition of ‘Accountant’ in the
proposed Direct Tax Code-As per report of Parliamentary Stadning Committee headed by Shri.Yashwanth Sinha
Ministry’s Stand as on Apr 18, 2012
17.6 The Ministry has replied that the definition of accountant as appearing in the DTC is the same as that in the IT Act. An accountant for the purposes of tax matters is required to deal with all financial matters and audit all financial ledgers, books, records and statements of a company or firm etc whereas a cost accountant deals primarily with estimates of cost for projects and monitoring the project to ensure that these are within the budget. Therefore, a cost accountant may not have the expertise to deal with all the financial statements and matters. Accordingly the suggestion is not acceptable.
17.7 Further, the question here is not of giving privilege to any particular profession rather the most suited profession for dealing with the matters relating to direct taxes has to be assigned the work. Accordingly, the suggestion is not acceptable.
17.8 Under clause 304(3) (F) of the DTC, the Board may prescribe any person with specified educational qualification to act as an authorized representative. The same procedure is followed under the current Act. Accordingly, this will be considered at the time of framing of subordinate legislation.
Why change of opinion in DTC-2013 ? It is becasue of below statment of ICAI (Financials) in the letter addressed to CBDT dated 29.01.2013:-
In fact, the act of Non-CA tax professionals for making an effort to approach a chartered accountant for getting signature for audit not conducted by him in itself is an unethical act which should be seriously viewed.
DEAR ALL FRIENDS,
EVERYBODY SHOULD KNOW THAT PRACTICE OF LAW IS THE PREROGATIVE POWER OF ADVOCATES IN INDIA, WHEREAS PRACTICE OF COST ACCOUNTS, MANAGEMENT ACCOUNTS AND FINANCIAL ACCOUNTS IS NOT THE PREROGATIVE POWER OF ANY PROFESSIONAL BODY IN INDIA
I SUGGEST MY TAX ADVOCATE FRIENDS TO SERVE LEGAL NOTICE ON ICAI (FINANCIALS) ALLEGING ALL THE ISSUES PUBLISHED IN THIS BLOG & TAKE ACTION UNDER PIL. I HOPE THAT MY TAX ADVOCATE FRIENDS WILL CONSIDER MY REQUEST
Mr. BSK RAO JI,
YOUR ABSOLUTELY RIGHT HOW CAN CA REPRESENT ASSESSEE WHEN HE CONDUCTS STATUTORY AUDIT ON BEHALF OF DEPARTMENT. YOU CAN PRESUME WHAT WILL BE HAPPEN IF SAME ADVOCATE REPRESENTS BOTH COMPLAINANT & ACCUSED BEFORE COURT.
Here only intention of the ICAI to give full employment to its members by this way or that way.
TO
CBDT/Deptt. of Revenue/Ministry of Finance,
There is one more question raising in my mind. CAs conduct tax audit U/s 44AB for revenue. Here, how come such same CAs represent before assessing authorities by the strength of power of attorney in scrutiny proceedings on behalf of the assessees for whom they have issued tax audit report ?
The above question has to answered by CBDT/Deptt. of Revenue/Finance Ministry & ICAI (Financials). Please can any one answer my question ?
DEAR ALL CA FRIENDS
CHARTERED ACCOUNTANTS MEANS LICENCED ACCOUNTANTS. IE, WRITER OF FINANCIAL ACCOUNTS ONLY. HOW WRITER OF FINANCIAL ACCOUNTS ISSUE AUDIT CERTIFICATE. UNDER INDIAN CONSTITUTION CAG ARE CALLED AUDITORS. IF CA’S WANTS TO CALL THEM AS AUDITORS CHANGE THE NAME OF THEIR INSTITUTE AS FINANCIAL AUDITORS OF INDIA. CORRECT NAME OF YOUR INSTITUTE SHOULD BE INSTITUTE OF FINANCIAL ACCOUNTANTS OF INDIA, WHO GAVE THE WORD CHARTER TO ICAI (FINANCIALS)
Raghav Goyal Sab,
Roshan Karne Ka bath nahi sab, following questions have been put before CBDT, Ministry of Finance to decide about retaining CAs monopoly on tax audit:-
1. Objectives for introduction of tax audit elaborated in Circular No.387 dated 6th July 1984 have been achieved since past 30 years.
2. Becasue of mandatory tax audit clause by only CA’s new Non-CA Tax Professionals are not entering tax profession in India to support voluntary compliance
3. On one hand new Non-CA’s are not entering tax profession & on the other hand all new CA’s will not stick to tax practice. This has lead to the situation that Govt. has to relay on only 65,570 existing practicing CA’s spread throghout India for seeking compliance.
4. Because of tax audit ceiling Non-CA’s handling tax audit cases have to roam around in search of CA’s during due dates. This situation prevailing only in India.
5. ICAI (Finaicals) in the above publication says that
In fact, the act of Non-CA tax professionals for making an effort to approach a chartered accountant for getting signature for audit not conducted by him in itself is an unethical act which should be seriously viewed.
Here question arises what Non-CA’s handling tax audit cases have to do ?
What about the compliance in those cases ? Govt. should answer ?
6. No. of practicing CA’s has come to light only after mandating the return to be filed online in tax audit cases. At that time only Govt. took decision to expand the definition of “Accountant” in DTC-2013
I have requested to Govt. & ICAI (Financials, do not mandate uploading of tax audit report for the genuine reason that RTI for section wise wrong claims required to be answered by CBDT, at that time ICAI (Financials) should answer the Govt. On date all such RTI’s are in the stage of Pending Disposal/1st Appeal
LET ICAI GIVE AT LEAST ONE SINGLE INSTANCE TO PROVE ITS SOCIAL RESPONSIBILITY, ALL ITS REPRESENTATION ALWAYS GOES IN FAVOUR OF ITS MEMBERS ONLY THAT TOO AT THE COST OF ASSESSEES, GOVERNMENT & PUBLIC AT LARGE. GOVT. OF INDIA SHOULD TAKE NECESSARY ACTION ON ICAI. BECAUSE PERSONAL AGENDA OF MEMBERS ARE SATISFIED THROUGH THE INSTITUTE EX: SECURING FULL EMPLOYMENT TO EXISTING MEMBERS BY ALL WAYS & MEANS, DISTURBING RELATED PROFESSIONALS IN THE FIELD AND ENTERING OTHERS AREA OF OPERATION ETC. ICAI BELIEVE IN MONOPOLY IN ALL FIELDS & NOT READY TO FACE COMPETITION FROM RELATED PROFESSIONALS. IT IS EVIDENT FROM RECENT REPRESENTATION MADE BY ICAI TO CBDT/DEPTT. OF REVENUE OBJECTING DEFINITION OF ACCOUNTANT IN DTC.
Hello Raghav Goyal ji, how r u ?
Please tell me quality of work done by CA’s in audit u/s 44ab as posted by me in a comment. By such quality we widen our tax base & after that only CA’s should be authorize to conduct audits u/s 44ab. Please also explain which extra knowledge required to tax audit u/s 44ab for non-corporate assessees not mentioned in ( B.COM + LLB) syllabus.
As per I know if Non CA Professionals are authorized definitely increase quality in audit work & to prevent revenue leakage.
DEAR ALL RESPECTED CA FRIENDS,
Please argue academically on making study of Section 288(2) of Income-Tax Act read with Rule 12A of Income-Tax Rules and Section 145 read with 14 Accounting Standards of CBDT, instead of saying that Non-CAs posting comments here with jelous (Here, it is presumed that all five class of persons who are authorised to prepare return under Rule 12A among total eight class of persons authorised represent the assessee U/s 288(2), possess the knowledge of Section 145 read with 14 Accounting Standards of CBDT, required for Income-Tax Practice). Because certain qualification has been fixed in Income-Tax Act for these five class of persons. Accounting Standard framed by ICAI & IFRS not required for Income-Tax Practice.
I hope that my fellow CAs posting comments in this blog consider my genuine request to enable DTC-2013 to come out smoothly with good shape, both in the interest of all Tax Professionals & Govt. revenue, keeping in mind that status of CAs are not disturbed in draft DTC-2013.
Thank yiu mr Rao and friends to explained to ca’s.
Dear CA friends please leave ego and accepts without ca can do the tax audit..
Hats off to you Sh. Mandeep ji and Sh.BSK Rao ji,
You type of people have proved the reason why indian business houses are not growing in equal pace with the foreign business houses.
B.Com. Is equal to CA…. 😀 😀 😀
WAH BHAI WAH…KAMAAL KARDI…
Tax Advocates jrur India ka kaam raushan karenge…
Dear All Friends,
In fact, the act of Non-CA tax professionals for making an effort to approach a chartered accountant for getting signature for audit not conducted by him in itself is an unethical act which should be seriously viewed.
If CBDT, Deptt. of Revenue, Ministry of Finance, Govt. of India accept the above statement of ICAI, than it has to delete all Non-CA Tax Professionals from Section 288(2) of Income-Tax Act & relay on 65,570 practicing CAs spread throughout India for seeking voluntary compliance U/s 139 of Income-Tax Act.
In view of latest Supreme Court verdict, appearance clause Section 288 require deletion from Income-Tax Act. Due to T.D.Venkat Rao case CAs can only conduct tax audit. The result will be Advocates will plead & act before Income-Tax Authorities by virtue of enrollment with Bar Council of India & CAs will only conduct tax audit because of T.D.Venkat Rao case. Can any one imagine the result & effect of this situation to Govt. revenue.
K.MUKAMBIKA & Neilufer Cushettji ji
I was obtained this information trough RTI & send to CBDT & MINISTRY OF FINANCE near about 20 times. Neilufer Cushettji ji RTI information only contained information regarding cases selected under scrutiny in which department made more than 2 lac addition. out which how many cases are audited & how many cases are non audited.
Sir as per information provided by the department.After this I reached on the conclusion that there is no benefit of reports u/s 44ab for Non- corporate assessees from Chartered accountants or Non tax professional & its just extra financial burden on assessees. These Reports misleads assessees for that mostly cases selected under scrutiny. Assessees wants to pay tax but they can’t give their consent properly due to complicated accounting system by government. This system plays important role in huge revenue loss to Government.
I am also surprised since 30 years government not find out any solution to tackle such kinds problems. Whether Govt. only intention to give financial advantage to CA’s. I am sure since 1984 ICAI income must be increase 50 times & you need to take balance sheets of ICAI under RTI. These Reports only increase Revenue of ICAI instead of our country. If these statutory reports didn’t introduced in income tax in 1984 then there is no identity of CA PROFESSION IN PRESENT TIME.
Ankit Sir,
WHEN MANDEEP SINGH IS GIVING STATISTICS OF WRONGFUL ACTION OF CHARTERED ACCOUNTANTS REQUIRING ACTION U/S 277A OF INCOME-TAX ACT, HOW COME YOUR STATEMENT STANDS RIGHT SIR.
My Chartered accountant friends
I am posting here quality of work done by CA’s in their audits u/s 44ab. If you are talking of such quality of work then I strongly in favour of there is difference between ASIA & AUSTRALIA continentals.
Both continentals are equal according to its geographical locations.
781 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
772 AUDITED U/S 44AB BY CA
9 NON AUDITED CASE
241 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
229 AUDITED U/S 44AB BY CA
12 NON AUDITED CASE
200 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
200 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
185 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
185 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
181 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
181 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
88 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
87 AUDITED U/S 44AB BY CA
1 NON AUDITED CASE
159 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
159 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
155 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
155 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
148 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
148 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
127 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
127 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
121 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
121 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
120 TOTAL CASES IN WHICH ADDITION MORE THAN 2 LAC
120 AUDITED U/S 44AB BY CA
0 NON AUDITED CASE
TOTAL U/S 44AB NON AUDITED
2506 2484 22
sir if CA’s talking of such kind quality work then their is no need such kinds quality for widen our country revenue. This information from various INCOME TAX DEPARTMENTS FROM INDIA.I have same kind information near about 2000 offices all over india. which is not possible to publish here.
One more thing, I have seen the shoddy work done by so called Tax Practitioners first hand in case of many clients. I have got many new clients solely because of the blunders committed by so called Tax Practitioners in filing the returns and drawing up the financial statements
It;s indeed funny reading the name of subjects(papers) being compared of B.Com and CA. I have completed both B.Com & CAs and let me assure you the level of details that a CA has to go through of Accounting Standards, Auditing Standards and Income Tax Act 1961 is 100 times more than B.Com course.
So please stop making baseless arguments about being B.Com & CA being similar.
If that was the case paasing percentage of B.Com also would 3-5 % as it is in CA course
MANDEEP SING JI,
One more thing you should say here, In CA recognised coaching is not available. Whereas in B.Com university recognised coaching with practical assignments are placed now. Many of the CAs are B.Sc,CA
NEWS FROM INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
As the members are aware, the Direct Taxes Code, 2013 has proposed to widen the scope of the definition “Accountant” to include other professionals as well. It is a fact that various provisions in the Income-tax Act, 1961 under which chartered accountants have been given the responsibilities to undertake audit and certification of accounts of various entities have the emphasis on “audit” of the relevant accounts which is the exclusive domain of Chartered Accountants.
The Council of ICAI is aware that the proposed change is a cause of major concern to the entire profession. In this regard, ICAI has through a representation to Ministry of Finance, placed on record its concern not only for the profession, but for the country as a whole since issuance of audit certificates by persons having limited knowledge of audit of accounts will not only be professionally incorrect and but will raise many concerns including causing huge revenue leakages.
A meeting in this regard was held with Mr. Rajiv Takru, Revenue Secretary and Mr. R.K.Tewari, Chairman, CBDT on 16.4.2014, wherein CA. K. Raghu, President, ICAI and CA. Manoj Fadnis, Vice President, ICAI emphasized on the fact that there is a very significant difference in the area of expertise of other professionals vis-a-vis Chartered Accountants.
Members be assured that the Council of ICAI is equally concerned and will not leave any stone unturned to save the profession and the nation.
CA Prasenjit Paul ji
For your kind knowledge, I am mentioning syllabus of B.COM & CA. Pl decide why B.COM decree holder is not competent to audit of business accounts u/s 44ab. Just minimize pass percent not produce quality & it creates only frustration. B.COM LLB with 10 years experience are more competent for audit. they have expertise in law & accountancy ( reason CA & B.COM SYLLABUS is same for audit accounts u/s 44ab. Pl leave ego & come forward for pro country revenue.
B.COM SYLLABUS
FIRST YEAR
1) Financial accounting
2) Business Economics
3) Business Statistics and
Operations Research
SECOND YEAR
1) Corporate Accounting
2) Banking and Financial Services
3) Business and Corporate Law
4) Principles of Management
5) Indian Economy : Problems and
Policies
THIRD YEAR
1) Business Taxation
2) Practical Auditing
3) Entrepreneurial Development
4) Cost and Management Accounting
5) Marketing Management
CA SYLLABUS
IPCC – Intermediate (Integrated Professional Competence) Course
Group I
Paper 1: Accounting (100 marks)
Paper 2: Business Laws, Ethics and Communication (100 marks)
Paper 3: Cost Accounting and Financial Management (100 marks)
Paper 4: Taxation (100 marks)
Group II
Paper 5: Advanced Accounting (100 marks)
Paper 6: Auditing and Assurance (100 marks)
Paper 7: Information Technology and Strategic Management(100 marks)
________________________________________
FINAL
Group I
Paper 1: Financial Reporting (100 Marks)
Paper 2: Strategic Financial Management (100 Marks)
Paper 3: Advanced Auditing and Professional Ethics (100 Marks)
Paper 4: Corporate and Allied Laws (100 Marks)
Group II
Paper 5: Advanced Management Accounting (100 Marks)
Paper 6: Information Systems Control and Audit (100 Marks)
Paper 7: Direct Tax Laws (100 Marks)
Paper 8: Indirect Tax Laws (100 Marks)
DEAR ALL FRIENDS,
Among Cash, Mercantile & Mixed System of Accounting, Mercantile System reflect true picture of profit or loss of the 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 liabiltity side of Balance Sheet, similarly all income relates to the year, whether received or receivalbe are credited to Profit & Loss A/c receivable portion show in asset side of Balance Sheet. Further, expenses incurred in advance & income received in advance are shown in assets & liability side of the Balance Sheet respectively. This is thought at PUC level to commerce students. Based on this principle only all other accounting standards are framed to take scope & to create confusion in the minds of public.
In Rule 12A of Income-Tax Rules, 1962 only following five class persons are authorised to prepare return under Income-Tax Act, among eight class of persons authorised to act as representative of assessee U/s 288(2) of Income-Tax Act. This means below mentioned five class of persons posses the knowledge of accounting standard prescribed in Section 145 of Income-Tax Act required for Income-Tax Practice. Knowldge of AS framed by ICAI/IFRS is not yet all required for Income-Tax Practice.
1. Legal Practitioners
2. Cost & Management Accountants
3. Company Secretaries
4. Chartered Accountants
5. Income-Tax Practitioners
All the above five class of persons satisfy the qualification prescribed under Income-Tax Act. Hence, there should not be any discrimination among them as far as practice of Income-Tax law is concerned. Ie, all persons should be equally authorised to acts, including tax audit & other certification work under Income-Tax Act, to meet the end of justice.
THIS IS MY FINAL OPINION WHICH IS ALSO IN THE INTEREST OF GOVT. REVENUE KEEPING IN MIND THAT MORE PERSONS IN THE LINE OF INCOME-TAX PRACTICE MORE REVENUE TO THE GOVT. BECASUE THERE IS LIMITATION TO HANDLE NO. OF CASES BY EACH INDIVIDUAL. FURTHER GOVT. CAN NOT RELAY ON MEMEBERS OF ONE PROFESSIONAL BODY TO SEEK VOLUNTARY COMPLIANCE UNDER INDIAN TAXATION LAWS. IN ORDER TO AVOID DISPUTE BETWEEN VARIOUS KINDS OF PROFESSIONAL BODIES ABOUT THEIR AREA OF OPERATION, TAX PRACTITIONERS LAW IS PREVAILING IN OTHER COUNTRYS THROUGHOUT THE WORLD.
ABOVE IS THE ULTIMATE MOTTO IN MY LIFE, WHICH I AM FIGHTING SINCE 2001. NOW I AM HAPPY THAT GOVT. IS TRYING TO OPEN ITS EYE IN DTC-2013
Dear Prasanjit ji
You are not going through the original question. Original question is CA is not entitle to practice of taxation law. This is meaning of Mr. Manjeet Singh. You are twisting the issue.
Please read my open letter to your President. Advocate class is never demanding audit which please note it. We demand that CA class is doing unlawful practice of taxation and therefore, remove this class from the practice.
Dear Mr. MANDEEP SINGH
on your following comment:
“syllabus of CA’s near about same with B.COM then it is wrong to say only CA’s should be authorize to conduct audit.”
Comment of yours is very funny even a baby knows. I only like to ask you whether you have gone through the syllabus of CA or anybody known to yo tried/succeed CA curriculum. Please try CA, get success & then only comment.
ICAI in the above letter talks about competence, quality, knowledge of AS & audit procedure etc, etc, etc which others does not have, then why CBDT has failed to provide information about section wise wrong claims reported in tax audit report uploaded in e-filing website of income-tax deptt. for the Asst. Year 2013-14 against the RTI Application filed by Advocates throughout India. ICAI should answer this question before putting defense that tax audit is exclusive domain of CAs. Actually, ICAI in their statute authorised to practice financial accounts only. ie, write accounts relating to trading activity only.
great reply by the ICAI
Dear President
Institute of Chartered Accountants
New Delhi.
Respected Sir,
I fully agree with you that audit work is exclusive right of CA class as it is given them in sec 2 of the Chartered Accountant Act. However, the practice of law is not given in said section. Even though, you had given your opinion in section 2(2) that the CA class can do practice of taxation. This is only the opinion and it is not backed by any Act or Law.
Now, come to the word “authorized representative” define under the section 288(2) of the Income-tax Act, 1961. “representative” means to represent someone only or appear on behalf of someone. It is not include the practice of law. Practice of law means to appear and argued or making submission, clarification more than one time before any Court, Authority or Quasi Judicial Authority. The right of practice of law is given to only the Advocate class under section 29 to 33 of the Advocate Act. Only the Advocate can appeared on Vakalatnama. Other person who is authorized representative has to produce POWER OF ATTORNEY ON STAMP PAPER. Now, POWER OF ATTORNEY holder can’t do practice of law.
In the case of Jaymal Thakore CA vs Charity Commissioner, the Hon’ble Gujarat High Court had clearly laid down that what can do the POWER OF ATTORNEY holder. The authorized representative is only a messenger of his principal.
Now question is why other class is included into section 288 as an authorized representative? The other class is included for the facility of the assesee. To give the relief from the repeatedly personal appearance into proceeding.
Mr. President, you had quoted many Judgments. All are related with audit work. Non of judgment say that CA class can practice of taxation. I would like to draw your attention on latest decision of Hon’ble Apex Court BCI vs A K Balaji, in which the Apex Court clearly state that the only the person who is a member of Bar Council can practice of law.
Therefore, please withdraw the opinion given u/s 2(2) of Chartered Accountant Act.
To day other than advocate are engaged himself as a advocate. These is totally unlawful and liable to take action u/s 45 of the Advocate Act, 1961.
Now question of tax audit u/s 44AB for Non- corporate assessees by a B.COM LLB perfectly. Audit u/s 44ab related to just knowledge of book keeping.
syllabus of CA’s near about same with B.COM then it is wrong to say only CA’s should be authorize to conduct audit.
1) as per concern about training with experience of 10 years income tax( B.COM LLB) more competent then new CA.
2) AS PER CONCERN FORM 3CD & 3CB related to interpretation of tax laws. According that only TAX ADVOCATE should be authorize to file form 3CD & 3CB.
3) As per information provided by Income tax department all over india. MOSTLY CASES ARE AUDITED CASES IN WHICH DEPARTMENT MADE MORE THAN 2 LAC ADDITIONS conducted by CA’s u/s 44ab.
4) AT LAST ICAI SHOULD BE SERIOUS ABOUT COUNTRY REVENUE IRRESPECTIVE OF ONLY FOR THEIR MEMBERS INTEREST.
A.K. Balaji Vs. Government of India
(2012) 35 KLR 290 (Mad.)
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 21.02.2012
C O R A M
THE HON BLE Mr. M.Y. EQBAL, CHIEF JUSTICE
and
THE HON BLE Mr. JUSTICE T.S. SIVAGNANAM
W.P. No.5614 of 2010
and
M.P. Nos.1, 3 to 5 of 2010
Head Note:-
Advocates Act, 1961 – There is no bar for foreign lawyers or law firms to visit India for temporary periods on a “fly in and fly out” basis to advise their clients on foreign law and diverse international legal issues. They are however not permitted to practice Indian law, either in relation to litigation or advisory matters, unless they qualify and enroll as advocates and fulfill the requirements of the Act and Rules. The activities performed by BPOs and LPOs do not constitute practice of law and hence do not conflict with the Act. The Bar Council of India may take necessary steps in relation to the practice of law by chartered accountants and management firms, which is contrary to the Act.
A.K. Balaji
.. Petitioner
versus
1. The Government of India, rep. by its Secretary to Government, Law Department, 4th Floor, A-Wing, Shastri Bhawan, New Delhi 110 001.
2. The Government of India, rep. by its Secretary to Government, Home Department, North Block, Central Secretariat, New Delhi 110 001.
3. The Government of India, rep. by its Secretary to Government, Finance Department, North Block, Lok Nayak Bhavan, New Delhi.
WE RESPECT HON’BLE COURTS BUT MEMBERS OF ICAI NOT FALLOW JUDGEMENT OF HONB’LE HIGH COURT & SUPREME COURT IN ABOVE MENTIONED CASE.
It is sad that the clarification has not brought out in unequivocal terms that it is not only the non-CAs (for that matter, even if it be CAs)who make the approach but also the CAs who are approached, are equally criminally guilty; further , not only on ethical grounds, but also for unadulterated deceit and criminal act of ‘fraud’ on the Revenue. It is unabashed shamelessness that such frightening and distasteful information, even when coming to surface, is not viewed with all seriousness as normally expected by one and all who still believe in and continue to place faith in the sanctity of such or similar mandates of the law, intended to serve the laudable objective behind.In short, this is not one such matter which could be lightly waved off with a nonchalant and unconcerned shrug of shoulder, – ‘all is well’ or a ‘chalta-hai’ attitude of utter dejection !
Excellent CA. Sandeep Kanoi Ji..