Issue/Justification

There are classes of persons who are filing income tax returns but are not declaring their income properly. Either the income is suppressed or various deductions are being claimed which are not legally permissible. With the increase in the work of the Department it is not practicable to scrutinize each and every return. Taking into consideration this aspect the person filing the return takes a calculated risk. Further, basic deductions provided by the Act like section 80C (Rs.1, 00,000), section 80D (15,000), section 24(b)(Rs.1,50,000) being claimed by the individuals and HUFs, in large numbers, have huge revenue impact. To check on the admissibility of the claim for deduction, no proof of investment is called for by the assessee. Today as per e-filing website there are 2.79 crore assessees who have filed return for ITR-1,2,3,4 and 4S online for the AY 2013-14 and are thus expected to have an income of Rs.5,00,000 or more. Considering the slab rate of 10%, the minimum revenue impact is 2,70,000*10.3%*2.79 crore is approximately Rs. 77600 crores. In case the applicable rate of tax is 20.6%, the revenue impact is approx. 155180 crores. In case the applicable rate of tax is 30.9%, the maximum revenue impact is Rs. 232770 crores.

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To address this, it is important that all the returns filed are thoroughly checked and cross-verified with the information collected through AIR and other sources by the Department. This process is entirely different from the scrutiny process. In this verification, not only the arithmetical accuracy but the admissibility of the claim regarding the expenditure incurred, income earned or investment made on the basis of the evidence collected from various sources will also be verified. Since this work is voluminous, the same will also be required to be out-sourced preferably to the professionals understanding the law better and who are in a position to identify the grey areas. Although the chartered accountants, through whom approx 85% of the returns are filed, ensure the correctness of the claim, the law does not recognizes the same. Thus, the chartered accountant is questioned by the assessee, when documents are asked for. In the interest of the revenue, it is imperative to have a certification of claims of deductions under section 80C, 80D, 24(b) and the like. This process once started will ensure better voluntary compliance as every taxpayer filing the return would be aware that the return being filed would be subject to a verification process and he cannot afford to take the liberty of making adjustments which are legally impermissible.

Suggestion – Since non verification of admissibility of basic deductions provided in sections 80C, 80D and 24(b) have huge revenue impact, it is imperative to have a certification /verifications of all claims of deductions under section 80C, 80D, 24(b) and the like. In this verification, not only the arithmetical accuracy but the admissibility of the claim regarding the expenditure incurred, income earned or investment made on the basis of the evidence collected from various sources will also be verified. Since this work is voluminous, the same will also be required to be out-sourced preferably to the professionals understanding the law better and who are in a position to identify the grey areas.

(SUGGESTION TO IMPROVE TAX COLLECTION)

Source- Pre-Budget Memorandum – 2014 on Direct Taxes by The Institute Of Chartered Accountant Of India, New Delhi

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0 responses to “ICAI suggests Verification of all income-tax returns by Professionals”

  1. s sudarshana says:

    Dear Ravina Verma,
    Use ITR-4 where provision exists to show expenditrue incurred for tuition, etc viz., rent, electricity etc. ITR-4 for professional income.

  2. Ravina sharma says:

    Hello I have income from tuition & cloth stitching work. my total personal income 2 lac.I would like to know that which ITR form should be filed. and my husband having a agriculture & professional income so for him which ITR form should be filed. kindly reply me . thanking you

  3. R.SUBRAMANIAN says:

    Statement made by Revenue Secretary to Media
    On August 6, 2012, the Finance Minister Shri P. Chidambaram made a statement on the policy of the Government regarding taxation and tax administration. He emphasized that clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution, and an independent judiciary will provide great assurance to investors. This message has been repeated on several occasions since then.
    December 15 is an important day on the calendar of the Central Board of Direct Taxes (CBDT). It is the date on which the third installment of advance tax for corporates and the second installment for all other assesses (including individuals, HUF etc) is due.
    In Assessment Year 2012-13, only 14,62,488 assessees (salaried persons, HUF, professionals, firms, companies and transporters & retainers) have filed their returns disclosing a taxable income of over Rs. 10 lakhs. Any fair minded person will agree that this is a gross under-statement.
    We know that –
    • 16,00,746 persons made payments of Rs. 2 lakhs or more against their credit cards; • 11,91,037 persons decided to purchase or sell house property worth Rs. 30 lakhs or more;
    • 52,42,114 persons acquired mutual funds of Rs. 2 lakh or more; bonds or debentures of Rs. 5 lakhs or more; shares issued by a company of Rs.1 lakh or more; bonds issued by RBI of Rs. 5 lakh or more;
    • 33,83,276 persons made cash deposits aggregating Rs. 10 lakh or more in the savings bank account.
    Government would urge all asessees to disclose their true income. There is no advantage in suppressing the true income or avoiding paying income tax that is due because, sooner than later, the information available with the Income Tax Department will lead the department to the doors of such persons. For assesses who have not yet paid the correct advance tax, there is an opportunity to rectify the mistake and pay the advance tax by December 15, 2012. Government seeks the cooperation of all citizens in this regard.
    For above this problems arise only from Chartered Accountant, the assesses goes to file and get it the certificate from CA, he will get it the fees of Rs.lakhs and above, so the people could not file the return in proper way. India total population estimates is 1270272105, Income tax assesse is estimated 1462488, the ratio is below 1%.

    In developed countries like Australia 70% to 80% of population are under tax net, whereas in India only 2% of population are under tax net. This is because of confining certification powers only to Chartered Accountants in Income-Tax Act, 1961 as discussed above. On date ample tax compliance work is there, but there is no required Tax Professionals to support voluntary compliance. I hope that Ministry of Finance will consider my above submissions & make necessary amendments to Income-Tax Act/Direct Taxes Code, keeping in mind that “more persons in the line of tax practice more revenue”.

  4. B.S.K.RAO says:

    Attorneys Employed by a CPA Firm….

    The court must have had some kind of vision of the professional world converging in the future, for as early as 1964, it set rather interesting ground rules into place for the cross-employment restrictions of Legal and CPA professionals. In Opinion 23 (January 9, 1964), the court was asked: “May a member of the Bar of New Jersey engage in the practice of law in this State simultaneously with the practice of public accounting?” In response, the court’s opinion states:

    “… we find that the dual practices of law and accounting … by lawyers would not violate the Cannons of Professional Ethics. Nor does it appear to us that any other rules of our Supreme Court would be violated by such dual practices.”

    While one would expect this finding would permit CPA firms to hire lawyers to serve in practice while at the same time permit law firms to employ attorneys who also hold CPA licenses to serve dual masters, the opinion, unfortunately, does not cover CPA firms who hire attorneys. The opinion specifically addresses lawyers practicing law in New Jersey who are also CPAs and practicing public accounting. If a CPA firm employs an attorney, in order for that attorney — assuming he or she is a member of the New Jersey bar — to perform and bill legal services for clients, he or she must do so under the banner of a New Jersey law firm, not the CPA firm.

    Inheritance Tax Returns….

    While it would appear that our law firm colleagues hold the winning position with respect to dual-practice issues, there is one area where the NJSCPA successfully reclaimed a small square of turf involving tax returns.

    In its Opinion 10 (November 1972), the Committee on the Unauthorized Practice of Law ruled that “… the preparation of an inheritance tax return requires the application of a gamut of legal principles, and that its preparation by a non-lawyer, acting for another, would constitute the unauthorized practice of law.”

    However, in 1986, in the matter of the Application of New Jersey Society of Certified Public Accountants, 102.N.J. 231, 242 (1986), the Supreme Court modified the ruling to allow a limited exception that permits CPAs to prepare and file inheritance tax returns as long as the client is notified, in writing and before the CPA commences work on the return, that a review of the return by an attorney may be desirable due to the possible application of legal principles related to the preparation of the inheritance tax return.

    Conclusion……

    The CPA is clearly at a disadvantage in regard to extending his or her practice into areas concerning legal matters, with the exception of entity creation services. CPAs should exercise caution and keep to our roles as trusted advisors, discussing options but referring the legal work to a qualified law firm. In the end, distancing yourself from offering legal services will likely yield a referral to your firm, rather than a fine or lawsuit for practicing law without a license.

  5. B.S.K.RAO says:

    ULTIMATELY,

    WHATEVER COURT ICAI (FINANCIALS) APPROACH ABOUT PRACTICE OF INDIAN TAXATION LAWS, IT GO IN FAVOUR OF ADVOCATES ONLY. SUCH WRIT PETITIONS WILL BE TOTALLY DISMISSED BY THE COURT OF LAW-THIS IS IN VEIW OF LATEST VERDICT IN THE CASE OF BAR COUNDIL OF INDIA VS A.K.BALAJI (SC) & A.K.BALAJI VS GOVT. OF INDIA Madras(HC)

  6. s sudarshana says:

    Mr. K.C.Agarwal,
    You are stating again one more layer is to be brought to the tax payer to add expenses, time and energy while the Govt. of India and IT Department is going allout to make things simple by introduting online filing, doing away with enclosures making refunds directly, bringing in TRACES to help tax payers to know the TDS details. You should have read the comments of earlier writers and countered them, who have opposed one more layer. before advocating for one more layers. You have not reacted/countered my comments of 12/6/2014 06.02 pm wherein your suggestions have been addressed without actually bringing in one more layer.
    Your advocacy implies that we should suspect the those filing online now, that majority are cheaters/wrong claimers of deduction and ignorant of the rules. This is a very sad part. Whenever the tax payer feels he is in difficulty to file himself he will certainly take the help of professionals. Why you want to make it mandatory to process through one more layers.
    In the light of the recent trend to bring in ‘single window’ from ‘multi window’ for quick and smooth result your suggestion is retrograde and was avoidable.
    Your concern that they are ignorant of rules and making wrong claim is to be supported by statistics, Sir. Please ask the IT CPC to provide for the STATISTICAL figures regarding correct filing, false filing, suppressing the income cases by those who have resorted to direct filing and also those filed by Professionals. As and when more than 50 % people are filing wrongly and causing loss to govt, despite collecting fines from the assessees, such suggestions cannnot be seen as right.

  7. K C AGARWAL says:

    i fully agree with the view of ICAI. In most of the cases, the return is being filed by non qualified person,who does not have thorough knowledge of the taxation. Under section 80c, Rs.100000.00 is being claimed, without having the detail. Insurance is being claimed, without knowing whether the person is entitled for insurance, as per act or not. Many due claim is not being claimed. All required information is not filled up in the return. Detail of fixed asset is not filled up.In our view, return should be certified by professional
    K C AGARWAL

  8. Asokant says:

    Give suggestion for the simplification of Income tax rule for the salaried class and retired people. Do not complicate the matter to make few people wealthy at the cost of other people.

    Start basic classes on taxes/general laws to the school children and understand them the importance.

  9. B.S.K.RAO says:

    Ram Patil Sir,

    This suggestion given with the motto of inserting certificate in Income-Tax Return itself. In my practical experience majority of the assessees invest in savings covering the whole limits prescribed U/s 80C of Income-Tax Act, in order to plan tax. There is no further verification required in the matter. Rather, Deptt. should investigate, why combined tax admission in ITR-4 & 5 covered by tax audit is still 45 thousand crores only. Because return filed in ITR-4 & 5 covers assessees engaged in business of agricultural & industrial output and also service sector.

  10. vswami says:

    To add: In the published article – Finance Bill, 2006 -IMPROVING TAXPAYERS SERVICE – A Study ((2006) 151 Taxman 295) , one of the connected matters briefly touched upon relate to the implications of rule 12A of the IT Rules. The duties /responsibilities of CAs authorized to render service to taxpayers by way of assisting them in preparing tax returns, as focused on, are onerous in nature. Should, as pointed out, the said rule be modified to render it comprehensive, foolproof and purposeful enough, in one’s perception, that itself might go a long way in eventually accomplishing the same outcome the august professional body seems to,- have had in mind/be its dream.
    Now, over to the Experts for an intensive deliberation.

  11. vswami says:

    Simply to share one’s own individual reactions, tentatively and in brief:

    The suggestion to ‘outsource’, so generously offered, does not prima facie appear to have been made after an appropriately required home work. This is yet another instance of impulsive ‘suggestion’, in quick succession, which has given rise to serious doubts about the objective behind or useful purpose , if any, aimed at. As echoed by some, rightly so, at best the suggestion is potent with undesirable and retrograde outcome.

    Be that as it could not have been expected to be any different, one keeps painfully wondering whether or not in venturing any such suggestion, the following very relevant material angles have been unwittingly or otherwise over sighted:

    1. The most harmful and objectionable consequences,- lately and many times brought to focus in legal and other knowledgeable quarters,- the fashionable technique of ‘outsourcing’, albeit that has come to be resorted to recklessly n almost every field of human activity, in the ultimate analysis has in store; if remember right, the bone of objection is that any such basically ‘governmental’ work / responsibilities, with attendant ‘confidentiality’, ought not to be, from the viewpoint of ‘public interest’, delegated- to do so may be strictly speaking impermissible by any idealistic principle/ logic, – to ‘outsiders’ of any type, all and sundry.

    2. Is there not a full fledged machinery of governmental audit very much in place ,coming under the purview /supervision of the esyeemed constitutional authority – ‘CAG’/ AGs, which is supposed, rather duty-bound, to take sufficient care of the elaborate task of ‘verification’ sought to be underscored?

    3. Is not the suggestion tantamount to impliedly or otherwise questioning or throwing serious doubts, in one’s view unwarranted though, on the effectiveness/efficacy of the several laudable steps taken by the government; mainly, the most modern ideas given shape and implemented, at a colossal cost to the exchequer (in turn, to the public), being the ‘national net work’ set up and the ‘CPC’ in full swing /operation.

    (Left open to be ‘edited’, if so wish, by one and all concerned, endowed with a public-centric motive/ insightful thinking)

  12. Ram Patil says:

    I totally disagree with this. This way you are distrusting the assessees.
    Do you guarantee, professional will not get involved in manipulation?
    I think you are creating job market for so called professionals. If IT department think there is such need, they can recruit more people instead of outsourcing to professionals.
    IT department/ Banks / Financial institutes etc are tracking the data/information based on PAN etc and furnishing various returns to Apex Bodies/IT department etc which can be used for such purpose.
    Professional like CA, ICWA etc need to play more and sophisticated roles and not clerical one. They can built their own think tanks and advice govt on how to tackle such issues if any.
    Just for the sake of clarification I confirm the intention of this email is not to disrespect your thought or any professionals.

  13. s sudarshana says:

    Mr. TRP Mani Kandan:
    You mean only TRP’s can do efiling? Not the assessees. Pl elaborate what you have stated for others to understand. Anybody can do the e-filing of his assessment online.

  14. TRP MANI KANDAN says:

    Dear Sir

    The CBDT issue certificate TAX RETURN PREPARER for voluntary return assessee. but e.filing of ITR website only CA are tax professional. No one any other option to TRP.

  15. MANDEEP SINGH says:

    irrespective this opinion regarding deduction claimed properly or not is a legal opinion. As per in A.K BALA JI case NON ADVOCATE cann’t give opinion on litigation as well as non litigation matters.
    Then it will be contempt of court hon’ble Supreme court order if Non Advocates authorised for this matters.

    As per section 32 of Chartered Accountant Act 1949- CA’S ARE ACCOUNTANT

    IT IS NOT RELEVANT IF AN ACCOUNTANT is given legal opinion on LAW MATTERS.

  16. MANDEEP SINGH says:

    ICAI wrongly suggested for selfishness interests of its members. Every suggestion of ICAI related to tax matters, have selfishness interest for giving full employment to its members by putting undue financial burden on assesses. If ICAI is seriously worried about WIDEN TAX BASE THEN IT MUST SHOULD SUGGEST TO MINISTRY OF FINANCE REGARDING DELETE PROVISIONS OF SECTION 44AB. WHICH ARE TOTALLY FAILURE TO INCREASE REVENUE SINCE 1984. But opposite to it, these are strict hurdle to widen genuine tax base(As like INCOME TAX ACT & SECURITY TRANSACTION TAX)

    • CA Sandeep Kanoi says:

      Dear Mandeep,

      In above suggestions ICAI has asked for verification by professionals not only by CAs

  17. CA. Subhash Chandra Podder says:

    This is nothing but to show how efficient the Central council Members of ICAI , to verify the returns filled by assesses . I don’t think the Ministry will consider of their suggestion.
    CA.Subhash Chandra Podder,FCA
    Kolkata
    12/06/2014

  18. s sudarshana says:

    Sri B.S.K.Rao’s long explanation is okey as long as he wont say all should come through them. Even one is ignorant he can file with someone’s help with all the data, which in anyway is to be provided by him, even if CA does his job. Tax payer has enough expenses to incur and asking him to have one more layer, as a compulsory measure, is to be avoided at all cost.
    Instead fine for under payment of tax, suppression of facts/income should be deterrant to be effective.

  19. B.S.K.RAO says:

    CA Rajesh Pabari Sab,

    (1) As per Section 288(2) of Income-Tax Act, 1961 eight class of persons are authorized to represent the assesses. Among them only following five class of persons are authorized to prepare return on behalf of assesses under Rule 12A of Income-Tax Rules, 1962

    (a) Legal Practitioners
    (b) Chartered Accountants
    (c) Cost & Management Accountants
    (d) Company Secretaries
    (e) Income-Tax Practitioners

    (2) Original Income-Tax Act, 1961 was fantastically drafted by learned officials in Finance Ministry & it was capable of meeting the expectation of the Govt. in all future events, except requiring amendments for events/changes taking place in this 21st Century. Disturbance to the original intention of legislature in Income-Tax Act, 1961 started in 1984 by the intervention of Institute of Chartered Accountants of India by way of inserting mandatory Tax Audit Certificate U/s 44AB by only Chartered Accountants. This was also cautioned by Sri.P.C.Padhi, former Chairman, Central Board of Revenue and Deputy Controller & Auditor General of India, Sri.D.K.Rangnekar former Editor, Economic Times, who were the members of Direct Taxes Committee, popularly known as Wanchoo Committee & gave dissenting note on the issue.

    (3) The word “Chartered” of The Institute of Chartered Accountants of India (Financials) denotes some thing of a dominion state of affair as against Sovereign Independent Republic of India. On date, there are 46 Plus Mandatory CA Certificates in Income-Tax Act, which were inserted on the behest of ICAI (Financials) since from 1984. Because of 46 Plus mandatory CA Certificates in Income-Tax Act, 1961 Non-CA Tax Professionals viz. Legal Practitioners, Cost & Management Accountants, Company Secretaries & Income-Tax Practitioners can not exercise the authority granted in the statute fully & independently. This is practically causing strict hurdle for voluntary compliance. This position of Non-CA Tax Professionals is comparable to decree of court which can not be executed.

    (4) Audit means “verification”, depending on the purpose they are classified as Energy Audit, Environment Audit, Product Audit, Process Audit, Legal Audit in USA & Tax Audit in Indian Income-Tax Act. Here, person conducting audit should be specialized in that subject. Hence, the word “Audit” is not the domain of Chartered Accountants. Assessing officers of Income-Tax Deptt. who come from different streams conducting audit in scrutiny assessment proceedings are not Chartered Accountants. In conclusion, person specialized in Income-Tax law should issue Certificates/Reports in Income-Tax Act.

    (5) On careful study of Section 288(2) of Income-Tax Act read with Rule 12A of Income-Tax Rules, it has to be presumed that all five class of persons referred in Para No.1 above possess 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. Further, Accounting Standard framed by ICAI (Financials) & IFRS not required for Income-Tax Practice. Here the question is, when such other four class of Non-CA Tax Professionals are authorized to prepare return under Rule 12A of Income-Tax Rules, there is no justification to prohibit them for issue of Certificates/Reports in Income-Tax Act. Therefore, it is clear that on introduction of CA Certificates in Income-Tax Act, original intention of legislature in Rule 12A of Income-Tax Rules has been struck down.

    (6) In the enclosed Tax Audit Data provided by DIT(S), it is evident that only 65,570 CA’s are practicing throughout India. Due to Tax Audit ceiling, Non-CA Tax Professionals handling tax audit cases have to roam around in search of empty slots of CA Signature to give compliance in case of their clients during due dates. This has also resulted in high cost of compliance, due to high demand & extra payment made for reservation of empty slots of CA Signature. CA Certificates in Income-Tax Act are causing strict hurdle for voluntary compliance not only in Income-Tax Act, but also in other Central and State Govt. taxation laws. In another 10 years, Non-CA’s who entered the Tax Profession in 1980’s will all eliminate & Govt. has to relay on only CA’s for seeking compliance under all Indian taxation laws.

    (7) Particulars of Total Income-tax admitted in tax audit cases for Asst. Year 2012-13 & 2013-14 that relates to return filed in ITR-4, 5 & 6 as provided by CPC, Bangalore as at 28.05.2014 are as under:-

    Particulars………………..Asst. Year 2012-13….Asst. Year 2013-14

    Income-Tax Admitted in ITR-4…Rs. 23,986 Crores..Rs. 23,952 Crores
    Income-Tax Admitted in ITR-5…Rs. 20,712 Crores..Rs. 21,556 Crores
    Income-Tax Admitted in ITR-6…Rs. 2,92,266 Crores..Rs. 2,34,456 Crores

    Margin derived by farmers is not taxed in Income-Tax Act, but margin derived by next sellers of such agricultural output is taxed in their hands in Income-Tax Act. Presuming the output of corporate assessees reach the ultimate consumer in three stages & considering tax admission in corporate case & 50% of such corporate assessees do business with non-corporates covered by tax audit, who are in between the corporates & retailers and also considering non-corporates engaged in service sector, I am of the strong view that combined Income-Tax admission as per return filed in ITR-4 & 5 covered by tax audit U/s. 44AB should have crossed at least Rs. 15,00,000/-Crores. (Basis being 80:20 ratio of Ag. & Ind. Output).

    (8) In latest e-filing website of Income-Tax Deptt. only CA’s are treated as Tax Professionals with special login to upload CA Certificates (Impracticable procedure), without which Non-CA Tax Professional can not give compliance to the Deptt., if given his clients are under the risk of penal provision. These CA Certificates barricade support for voluntary compliance from Non-CA Tax Professionals & new Non-CA Tax Professionals are not entering tax profession on one hand and total number of practicing CA’s are not increasing on the other hand (Considering the output & death rate of practicing CA’s).

    (9) Indian legislature provided special class of persons called Advocates in Advocates Act, 1961 to practice all Indian laws. Therefore, appearance clause not yet all required in any Indian statute. Bar Council of India Vs A.K.Balaji [SLP (Civil) No(s) 17150-17154/2012] Dt.04.07.2012 (SC) and A.K.Balaji Vs Govt. of India (2012) 35 KLR 290 21.02.2012 (Madras HC) it was clearly held by Hon’ble Supreme Court & Madras High Court that Advocates alone are entitled to practice the Profession of Law both in litigious & non-litigious matters, nullifying the effect of Section 33 of Advocates Act. This also confirms to Section 29 of Advocates Act. The verdict of Supreme Court is the declared law of land, binding on all throughout the territory of India under Article 141 of Indian Constitution & contravention liable for action under Article 129 read with Article 142(2) of Indian Constitution. Income-Tax Act being “LAW” Advocates alone are entitled to Practice, Plead & Act before the assessing officers of Income-Tax Deptt. On date, appearance clause Section 288(2) of Income-Tax Act has been subjected to review of Apex Court.

    (10) Furnishing Certificate & Reports in Income-Tax Act require both interpretation of facts & law. Interpretation of facts is not a tough job, but interpretation of law is a tough job. Practice of law is the Prerogative Power of Advocates in India. Whereas practice of Cost Accounts, Management Accounts & Financial Accounts are not the prerogative powers of respective professional body. Because, penalty has been prescribed U/s 45 of Advocates Act, 1961 for persons illegally practicing the Profession of Law. Under Indian Constitution CAG are the Auditors with wide powers, carrying out meaningful job. Due to T.D.Venkat Rao (SC) case only Chartered Accountant issue Tax Audit Certificate in Income-Tax Act. In view latest verdict in the case of Bar Council of India Vs A.K.Balaji (SC) Section 288(2) of Income-Tax Act require deletion from the the statute. In the result only CAs will conduct Tax Audit & only Advocate will plead & act before the Income-Tax Authorities. Can any one imagine the ill effect of this situation to Govt. revenue & troubling assessees to approach more than one Tax Professional to give compliance in Income-Tax Act.

    (11)In developed countries like Australia 70% to 80% of population are under tax net, whereas in India only 2% of population are under tax net. This is because of confining certification powers only to Chartered Accountants in Income-Tax Act, 1961 as discussed above. On date ample tax compliance work is there, but there is no required Tax Professionals to support voluntary compliance. I hope that Ministry of Finance will consider my above submissions & make necessary amendments to Income-Tax Act/Direct Taxes Code, keeping in mind that “more persons in the line of tax practice more revenue”.

  20. CA Rajesh Pabari says:

    @B. S. K. Rao Sir,

    Kindly explain the point for giving statistics in this topic.

  21. CA Rajesh Pabari says:

    @ Gaurav Shah,

    As of now, it is not required. One can file return by themselves.

  22. V. SHRI KUMAR says:

    Only to address the voluminous task of tax filing, the IT Department has introduced e-filing, which is a boon to the tax-payers, especially salaried and senior-citizens. And the speed with which the tax returns are validated and refunds are processed by the Department is fairly satisfactory. Entrusting the work of certification to professionals, i.e. CAs or I.Tax practitioners is adding one more layer to the work and will certainly result in avoidable accumulation of scrutiny of returns and financial burden to the IT Department/tax payers.

  23. Umesh says:

    if salaried people are uploading individually there would not be problems, because company uploading data in TDS return. Please do not make complicated & costly to lower income people.

  24. Gaurav Shah says:

    As it is mentioned in the article, that every ITR filed should be checked & verified, i would like to ask, is it mandatory to get these ITRs Stamped by the C.A. or any other professionals?, awaiting the quick rply.

  25. B.S.K.RAO says:

    Particulars of Total Income-tax admitted in tax audit cases for Asst. Year 2012-13 & 2013-14 that relates to return filed in ITR-4, 5 & 6 as provided by CPC, Bangalore as at 28.05.2014 are as under:-

    Particulars…………Asst. Year 2012-13..Asst. Year 2013-14

    Tax Admitted in ITR-4..Rs. 23,986 Crores..Rs. 23,952 Crores
    Tax Admitted in ITR-5..Rs. 20,712 Crores..Rs. 21,556 Crores
    Tax Admitted in ITR-6..Rs.2,92,266 Crores..Rs. 2,34,456 Crores

    Margin derived by farmers is not taxed in Income-Tax Act, but margin derived by next sellers of such agricultural output is taxed in their hands in Income-Tax Act. Presuming the output of corporate assessees reach the ultimate consumer in three stages & considering tax admission in corporate case & 50% of such corporate assessees do business with non-corporates covered by tax audit, who are in between the corporates & retailers and also considering non-corporates engaged in service sector, I am of the strong view that combined Income-Tax admission as per return filed in ITR-4 and 5 covered by tax audit U/s 44AB should have crossed at least Rs. 15,00,000/-Crores. (Basis being 80:20 ratio of Ag. & Ind. Output).

  26. shanmuganathan says:

    For claim under section 80 D for medical insurance, the return forms may have the policy numbers,name of the insurer etc. which may be linked with the data of the insurance companies for checking the correctness of the claim. Since the activities of insurance companies are computerised that data may be linked with IT return data for cross verification.

  27. s sudarshana says:

    The suggestion is retrograde as it assumes everybody tries to suppress the facts to avoid or pay less income tax. Whoever goes for assistance on filing of return to the Charted Accountant, is likely to get more ‘ideas’ as how to reduce the tax or avoid it!
    Now, all the savings/investment made to avail benefit u/s 80-C, has invariably has the PAN also of the assessee, that data can be checked automatically by the IT dept without any ‘physical verification’.
    Regarding section 24(b) etc, nobody can enter something just like that as the figure is an input from the bank or financial institution which has lended the money where PAN is invariably provided.
    Expenditure for exemption on section 80-D is a grey area and scope exists for someone to give wrong figure in the return. Though this is a theoritical position, in reality one wont spend anyting (qualifying for rebate u/s 80-D) or spends many times more than what qualifies.
    Instead of bringing one more layer of check and consequent delay, the present system of taking up of about 5 to 10% for thorough check of the returns filed online is quite fair. May be they should impose more fine for willful wrong claim or suppression of income as a deterrent to false submission.

  28. RAMESHWAR says:

    This topic leaves message that CA work is like an antivirus software company, which writes virus and also makes its antivirus, so that it exists in market.

  29. Ravindra says:

    This is A suggestion for work generation for so called professionals.
    For the sake of simplification in tax laws alone, it is much more justifiable to scrap the rule/laws allowing deductions like sec. 80C and at the same time raising the income tax applicability limit for income . This will no doubt put many professionals out of business but it is what is required than have regime of tax terrorism.

  30. MukeshSingh says:

    People understand how to claim deduction u/s 80C, 80D & 24(b)….Nothing to worry for it by ICAI…..yea Govt. should outright reject this bcoz the exchequer is going to dent for sure as whatever Govt. is getting today will be going to reduce drastically & the cutting edged pie shall be in the pocket of icai…..

  31. CA Rajesh Pabari says:

    The argument of ICAI is squarely wrong. I see it as a gimmick to create more petty opportunities for chartered accountants. (What ICAI ignoring is how other big firms are eating away existing practice of the small and medium scale practicing units. Rather than working on big issues, suggesting such trivial measures wont help create a better accounting industry, its high time to stand up tall and do something)

    What Income Tax Department should do for the long term is to device a mechanism to verify the claims made by the assesses (Corroborative evidence). If the departments gets data from all the financial institutions, insurance companies as to the payments made by respective payers (Tracking by PAN number). It would be just a machine task to get a verification whether the claim of the assessee is right or not.

    Prescribing verification of returns by professionals for all the assesses is like creating a nuisance for the filers.

    I strongly disagree with the way things moving on here and the nearly useless suggestions of ICAI in this manner.

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