Include ‘Cost Accountant’ in definition of ‘Accountant’ under Income Tax Bill 2025: ICMAI

Release of Memorandum to include “Cost Accountant” in the Definition of “Accountant” under Section 515(3)(b) of the Income-Tax Bill, 2025

Institute of Cost Accountants of India (ICMAI) has welcomed the introduction of the Income-Tax Bill 2025 as a progressive step toward simplifying India’s direct tax framework. In a Memorandum submitted to the Select Committee of Lok Sabha, the ICMAI has urged the inclusion of “Cost Accountant” in the definition of “Accountant” under Section 515(3)(b) of the Bill. This inclusion would enhance the recognition and utilization of Cost Accountants’ expertise in taxation, compliance, and financial analysis. Cost Accountants are equipped with specialized knowledge spanning taxation, GST, cost accounting, and financial management, making them capable of contributing effectively to India’s evolving tax regime. The Institute emphasizes that CMAs already play significant roles under various legislations, including the Companies Act 2013, where they are recognized as internal auditors. Globally, Cost Accountants are considered equivalent to other accounting professionals and perform critical roles in tax compliance and auditing. Including CMAs under the Bill aligns with international standards and ensures a more inclusive tax framework.

THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
(Statutory Body under an Act of Parliament)
CMA Bhawan, 3 Institutional Area, Lodhi Road, New Delhi-110 003
Phones : +91-11-24622156-58, Mob : +91-9910030124, 7978082048
E-mail : president@icmai.in, bbnayak_26@yahoo.co.in
Website : www.icmai.in

G:142:02:2025 February 20, 2025

MESSAGE

Dear Professional Colleagues,

I am pleased to inform you that the Institute has released a comprehensive memorandum for the inclusion of “Cost Accountant” in the definition of “Accountant” under Section 515(3)(b) of the Income-Tax Bill, 2025. The memorandum has been officially submitted to the Hon’ble Prime Minister’s Office, the Hon’ble Finance Minister, the Secretary, Ministry of Corporate Affairs (MCA), and the Select Committee of the Lok Sabha tasked with examining the Income-Tax Bill, 2025. Link to download the Memorandum: https://publuu.com/flip-book/404268/1772072

The Institute has also constituted a Task Force to review and provide its recommendations on the Income-Tax Bill 2025.

These steps are part of our Institute’s persistent representations to the Ministry of Finance, Government of India, advocating for the rightful recognition of Cost Accountants in the realm of taxation compliance. I wish to inform you that the Institute submitted detailed recommendations on simplifying the language of the Income-Tax Act to enhance clarity, mitigate litigation, ensure tax certainty, and reduce compliance burdens. The critical role of Cost Accountants in promoting financial transparency and governance was also highlighted during the stakeholder consultation meeting for Comprehensive Review of the Income-Tax, 1961 held under the Chairmanship of Revenue Secretary, Ministry of Finance on 18^th September, 2024 at North Block, New Delhi.

In light of the anticipated enactment of the Income-Tax Bill, 2025, following its review by the Select Committee, I appeal to all Regional Councils and Chapters of our Institute to lend their wholehearted support to the submission of this memorandum. I urge you to adopt a positive, disciplined, and unified approach in seeking broader support for the inclusion of Cost Accountants under the definition of “Accountant.” Your active involvement is essential to amplify our collective voice and achieve this milestone for our profession.

Let us continue working together with dedication and resolve to further the recognition and growth of our profession.

With best regards,

President, ICMAI

*******

THE INSTITUTE OF COST ACCOUNTANTS OF INDIA

PRESS NOTE

Release of Memorandum to include “Cost Accountant” in the Definition of “Accountant” under Section 515(3)(b) of the Income-Tax Bill, 2025.

At the outset, the Institute of Cost Accountants of India extends its welcome to the Income Tax Bill 2025, introduced on 13th February 2025. We acknowledge it as a significant milestone to simplify India’s six-decade-old direct taxation structure. The Bill aims to streamline provisions, eliminate obsolete references, establish a more concise & transparent legal framework to reduce litigation and improve voluntary compliance. This clearly reflects the resolve of Govt. to introduce fundamental structural changes to achieve the goal of ease of doing business.

We, from the Institute, are determined to play our role effectively in realizing the Vision of Viksit Bharat@2047. The Institute has submitted a Memorandum to the Select Committee of Lok Sabha to Examine the Income-Tax Bill, 2025, requesting the inclusion of “Cost Accountant” in the definition of “Accountant” under Section 515(3)(b) of the Income-Tax Bill, 2025. This will ensure greater representation in the business scenario, inclusivity and utilization of the specialized skills of Cost Accountants in taxation and compliance-related activities under the evolving tax regime.

The demand for inclusion in the definition of Accountants is backed by our Expert Knowledge through CMA Curriculum that extensively covers all areas of Income Tax, GST, Accounts, Banking, Finance, Cost & Management Accounting, Auditing, Information Technology, Strategic Risk Management, Corporate Laws, Ethics, etc. followed by international examination standards. CMAs are recognized as Internal Auditors under the Companies Act 2013, thus acknowledging their expert knowledge in the domain of internal controls, risk assessment and deep understanding of accounts & finance. CMAs are even authorized to conduct Statutory Financial Audit under various State Legislations. CMAs are experts of micro analysis that gives them a unique advantage to work in Income Tax Domain to protect any loss to the exchequer. Furthermore, the Tax Audit under the existing Income Tax Act is actually not an audit; it is merely compilation of tax related data from the already audited financial statements. Ratio given at Para 27 by the Honorable Supreme Court in civil case 29 of 2021 refers. CMAs are equally capable of compiling such data as per the prescribed format. Therefore, CMAs should be included in the definition of “Accountant” under Section 515(3)(b) of the Income-Tax Bill, 2025.

About the Institute of Cost Accountants of India:

The Institute of Cost Accountants of India (ICMAI) is established under the special Act of Parliament, namely, The Cost Accountants Act, 1959 as a statutory professional body for the regulation and development of the profession of Cost and Management accountants in India. The Institute is under the administrative control of the Ministry of Corporate Affairs, Government of India. The Institute is a founder member of International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA). The Institute is also an Associate Member of ASEAN Federation of Accountants (AFA) and member of International Integrated Reporting Council (IIRC), UK.

President’s Office- ICMAI
Email ID: presidentoffice@icmai.in ; Mob. No. 9466664492

*****

MEMORANDUM

For inclusion of
“COST ACCOUNTANT”
in the definition of “Accountant” given
Under Section 515(3)(b) of
The Income-Tax Bill, 2025
About the Institute

The Institute of Cost Accountants of India (ICMAI) is a statutory body set up under an Act of Parliament in the year 1959. The Institute as a part of its obligation, regulates the profession of Cost and Management Accountancy, enrolls students for its courses, provides coaching facilities to the students, organizes professional development programmes for the members and undertakes research programmes in the field of Cost and Management Accountancy. The Institute pursues the vision of cost competitiveness, cost management, efficient use of resources and structured approach to cost accounting as the key drivers of the profession. In today’s world, the profession of conventional accounting and auditing has taken a back seat and cost and management accountants increasingly contributing towards the management of scarce resources like funds, land and apply strategic decisions. This has opened up further scope and tremendous opportunities for cost accountants in India and abroad.

The Institute is headquartered in Kolkata having four Regional Councils at Kolkata, Delhi, Mumbai and Chennai, 117 Chapters in India and 11 Overseas Centres. The Institute is the largest Cost & Management Accounting body in the world with about 1,00,000 qualified CMAs and over 5,00,000 students pursuing the CMA Course. The Institute is a founder member of International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA). The Institute is also an Associate Member of ASEAN Federation of Accountants (AFA) and member in the Council of International Integrated Reporting Council (IIRC), UK.

Vision Statement

“The Institute of Cost Accountants of India would be the preferred source of resources and professionals for the financial leadership of enterprises globally.”

Mission Statement

“The CMA Professionals would ethically drive enterprises globally by creating value to stakeholders in the socio-economic context through competencies drawn from the integration of strategy, management and accounting.”

Institute Motto

From ignorance, lead me to truth From darkness, lead me to light From death, lead me to immortality Peace, Peace, Peace

MEMORANDUM

For inclusion of
“COST ACCOUNTANT”
in the definition of “Accountant” given
Under Section 515(3)(b) of
The Income-Tax Bill, 2025

EXECUTIVE SUMMARY

Memorandum for Inclusion of “Cost Accountant” in the definition of “Accountant”

Under Section 515(3)(b) of the Income-Tax Bill, 2025

1. The Institute of Cost Accountants of India (ICMAI) was set up under the Cost Accountants Act enacted by Parliament in 1959 to regulate and develop the profession of Cost Accountancy in India.

2. The Institute of Chartered Accountants of India (ICAI) was set up under the Chartered Accountants Act enacted by Parliament in 1949 to regulate and develop the profession of Chartered Accountancy in India.

3. Historically, the Income Tax Act of 1961 defined the term ‘accountant’ to mean Chartered Accountants (CAs), as the Cost Accountants’ profession was still in its infancy.

4. However, over the years, Cost Accountants have evolved with rigorous training and have contributed significantly to the areas of taxation, accounting, management accounting, cost accounting and auditing.

5. Both ICAI & ICMAI are founder members of all international bodies of accountants, viz., International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA).

6. Today, both Cost Accountants and Chartered Accountants are widely recognized under various statutes and play critical roles in tax compliance and representation before authorities. Some of the areas under various statutes where Cost Accountants have been representing before the Govt. Authorities with other peer accounting professionals are stated as under:

• Goods and Services Tax [GST] – {Initially, under section 35(5) of CGST Act, Chartered Accountants as well as Cost Accountants were eligible for GST Audit though section 35(5) has been omitted later} [Special audit u/s 66 (i) of CGST shall be conducted by Chartered Accountant or Cost Accountant]
• Customs Act
• Erstwhile Central Excise Act
• Service Tax Act
• VAT Audit/Certifications under all states’ VAT Act
• Tax Return Preparer (Amendment) Scheme, 2018
• Appearances before Sales Tax Authorities
• Certification under Foreign Trade Policy
• Stock Audit, Concurrent Audit, Forensic Audit and other professional services of various Banks.
• In Companies Act 2013, section 138 defines that Internal Auditor shall be a Chartered Accountant or Cost Accountant.
• Both are eligible for Insolvency professional by Insolvency and Bankruptcy Board of India (“IBBI”) and Registered Valuer under 247 of the Companies Act, 2013.

7. The 49^th Report of the Parliamentary Standing Committee on Finance (15^th Lok Sabha) on the “Direct Taxes Code Bill, 2010” emphasized the necessity for broader inclusion of finance professionals. By recommending the inclusion of Cost Accountants, the Committee recognized their critical role in providing SMEs with a cost-effective and simplified tax compliance option.

8. The Direct Taxes Code (DTC) 2013 formally proposed to expand the definition of “accountant” to include Cost Accountants and Company Secretaries, showing progressive legislative intent towards recognition of broader professional expertise.

9. The 122^nd Report of the Department Related Parliamentary Standing Committee on Commerce on Ease of Doing Business (December 21, 2015) supported this approach by explicitly recommending the inclusion of Cost Accountants, Company Secretaries, and other financial professionals in the definition of “accountant.”

10. Both CA and CMA are known as “Accountant” as well as “Auditor”, as pronounced by Supreme Court & High Courts in several judgements.

11. Notably, Section 142(2A) of the Income Tax Act, 1961 allows the appointment of Cost Accountants for inventory valuation.

12. Globally, Cost Accountants are treated at par with other accounting professionals. South Asian and European Countries recognize Cost Accountants as ‘accountants’ and ‘auditors.’

13. Inclusion of “Cost Accountant” in the definition of “Accountant” under Section 515(3)(b) of the Income-Tax Bill, 2025 will provide a fair opportunity and recognition to the professional expertise of Cost Accountants, ensuring a more inclusive and strengthened tax framework of the Country.

MEMORANDUM

For Inclusion of “Cost Accountant”
in the definition of
“Accountant”
Under Section 515(3)(b) of the
Income-Tax Bill, 2025

The Institute of Cost Accountants of India (erstwhile The Institute of Cost and Works Accountants of India) was first registered as “Indian Institute of Cost and Works Accountants” on the 14^th June, 1944 under the Indian Companies Act, 1913. On 28^th May, 1959, the Institute was established by a special Act of Parliament, namely, the Cost Accountants Act, 1959 as a statutory professional body for the regulation and development of the profession of Cost and Management accountants in India. The Institute is under the administrative control of the Ministry of Corporate Affairs, Government of India.

The Institute is headquartered in Kolkata having four Regional Councils at Kolkata, Delhi, Mumbai and Chennai, 117 Chapters in India and 11 Overseas Centres. The Institute is the largest Cost & Management Accounting body in the world with about 1,00,000 qualified CMAs and over 6,00,000 students pursuing the CMA Course. The Institute is a founder member of International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA). The Institute is also an Associate Member of ASEAN Federation of Accountants (AFA) and member of International Integrated Reporting Council (IIRC), UK.

The Institute of Cost Accountants of India has made persistent representations to the Ministry of Finance, Government of India for inclusion of “Cost Accountant” in the definition of “Accountant” given in the Explanation to section 288(2) of the Income Tax Act, 1961 (Now section 515 (3) (b) of the Income Tax Bill, 2025). (Detailed list is enclosed as Annexure-I)

Despite several representations over the years, this long-pending request remains unaddressed, including in the newly introduced Income Tax Bill, 2025 tabled in the parliament on 13^th February 2025, which also does not recognize ‘Cost Accountants’ under the said definition given in section 515 (3) (b) of the Income Tax Bill, 2025.

The New Income Tax Bill 2025, introduces significant reforms to India’s tax system, including notable changes to transfer pricing regulations. A key amendment allows for the multi-year determination of the Arm’s Length Price (ALP). Under this provision, taxpayers can opt to apply the ALP determined for a particular assessment year to similar international or specified domestic transactions for the two consecutive years immediately following that year. This change aims to reduce compliance burdens by eliminating repetitive analyses for identical transactions over multiple years. It is to be noted that the Cost Accountants are the only professionals who are reporting related party transactions in Cost Audit Report since last fifteen years.

Further, the Institute hereby reiterates its submission for Inclusion of “Cost Accountant” in the definition of “Accountant” under Section 515(3)(b) of the Income-Tax Bill, 2025, as follows:

• Parliamentary Standing Committee on Finance in its 49th Report of 15^th Lok Sabha, relating to “The Direct Taxes Code Bill, 2010” had already recommended inclusion of Cost Accountant in the definition of ‘Accountant’. The Committee observations (Page 336 Para No. 17.9) are as follows:

“The Committee observed that the Ministry’s reasoning for non-inclusion of related professionals in the definition of accountant is a very strict construction of the term.

In the view of the Committee, the suggested amendment may provide the Small and Medium Enterprises (SMEs) a wider and cost effective scope for selection of professionals and will be an important initiative towards simplified tax compliance regime.

The Ministry may therefore re-consider the suggestion to widen the scope of the definition of “accountant”.

• Direct Taxes Code (DTC) 2013 proposed that the definition of “accountant” should include a Company Secretary within the meaning of the Company Secretaries Act, 1980. The relevant extract of the DTC 2013 (Page 202 Para No. 320(2)) are reproduced below:

“(2) “accountant” means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act, and shall include-

(i) a company secretary within the meaning of the Company Secretaries Act, 1980;

(ii) a cost accountant within the meaning of the Cost and Works Accountants Act, 1959; or

(iii) any person having such qualifications as the Board may prescribe, for the purposes specified in this behalf.”

• 122^nd Report of the Department Related Parliamentary Standing Committee on Commerce on Ease of Doing Business dated 21^st December 2015, recommended expanding the definition of ‘accountant’ under the Income Tax Act to include other Finance Professionals, specifically mentioning Cost Accountant. The relevant extract of the 122^nd Report (Page 22 Para No. 8.19) are reproduced below:

“8.19 The Committee notes the response of the Government that a proposal to give certain rights to the Cost Accountants and Company Secretaries under the definition of ‘accountant’ under the Income Tax Act is under consideration. It recommends that the definition of ‘accountant’ under the Income Tax Act may be expanded so that people representing the companies’ cases may also include non-Chartered Accountants viz. cost accountants, company secretary, income tax experts, practicing advocates, etc.”

• C&AG Observations – The C&AG, in its Report No. 32 of 2014 (Performance Audit), observed serious flaws in the existing practice of tax audit & certification work performed by the Chartered Accountants. This had resulted in substantial loss of tax revenue to the Government. [22 CAs signed more than 400 tax audit reports for AY 2013-14. One signed 2471 reports and another, 990 reports. This is fraught with serious quality of tax audits.]
• Both CA and CMA are known as “Accountant” as well as “Auditor”, as pronounced by Supreme Court & High Courts in several judgements.
• Independent Audit – It would be more prudent if tax audit of an entity is independently done by a professional other than the chartered accountants who has already conducted financial audit of the same entity.
• Competition – Monopolistic and restrictive practices breed inefficiency, complacency, & corruption. Thus, allowing monopoly of all tax audits and various certifications required under the IT Act only to the CAs is not in the best interest of the Department nor it benefits the assessee.
• Globally, the term ‘accountant’ includes all accountants who are granted professionally qualified degrees by their respective national accounting bodies. Generally, no difference is made among them. In India, the roots of the Income Tax Act, 1961 lies in the original Act enacted during the British period in 1922. Similar legislations were adopted by Pakistan. In the UK, Cost & Management Accountants are recognized as ‘accountants’ at par with the accountants qualified from other five National Accounting Institutes. In Pakistan & Bangladesh, the Cost Accountants are treated at par as ‘accountants’ and also as ‘auditors’ under all Statutes governing corporate law practice and taxation practice. In the current era of globalization and WTO regime, where the accountancy profession is gaining.
• No Threat to CAs – Number of CMAs presently in practice are about 3-4% compared to that of CAs in tax practice. Allowing CMAs to undertake tax audit & certification work under the IT Act will surely bring healthy competition that would benefit the tax administration system as well as the assessees, especially the MSME assessees. CMAs would rather become an important asset for the Department [with no threat to the profession of chartered accountants, as is being wrongly perceived].
• Computation of arm’s length price for transfer pricing u/s section 92C by using cost plus method, profit split method and transactional net margin method require calculations based on the cost accounting principles. These cases can be best computed and certified by a cost accountant giving ease to the Transfer Pricing Officers.

Equality of CA and CMA

• Both ICAI & ICMAI are National level Accounting Institutes set-up by the Parliament of India. Both are members of all international bodies of accountants, viz., IFAC, CAPA, and SAFA.
• Globally, the term ‘accountant’ includes all accountants that are granted professionally qualified degrees by their respective national accounting bodies. Generally, no difference is made amongst them.
• The University Grant Commission (UGC) vide do no.9-35/2016/CPP-Il dated 15th April 2021 consider the CA/CS/ICWA (now CMA) qualification equivalent to Post Graduate Degree.
• National Recognition Information Centre of UK (NARIC, UK), which is the designated agency for recognition of international qualifications and professional skills, have benchmarked and recognized the CMA and CA Qualification as equivalent to Master’s Degree in UK.
• Regulation 166 of the Chartered Accountants Act, and Regulation 111 of the Cost & Works Accountants Act have identical provisions i.e. Members in practice to engage only in the profession of “accountancy”.
• Both the professionals, i.e., CAs and CMAs have similar Curriculum and Pedagogy for their students so far as it relates to the domain areas of accountancy, audit, corporate laws, and direct & indirect taxes. Only the nomenclature may be different but the course content is the same. CMA subjects emphasizes heavily on the areas of cost optimization, optimum utilization of scarce resources, pinpointing areas requiring cost controls etc. and the curriculum is suitably designed to equip members accordingly. Comparative Study of CMA Syllabus 2022 with CA New Scheme is enclosed as Annexure-II.
• Both qualifications are equally recognized by Government of India for entry into the Indian Cost Accounts Service and other senior positions under different organizations. Similarly, both have equal recognition for all middle/ senior level positions in the industry. [Actually, in number of companies, CMAs hold the position of CEO/CFO.]
• Large number of Central and State Statutes recognize both CA and CMA absolutely at par in several professional areas of accounting and audit. Both are equally allowed to appear before statutory and quasi-judicial authorities. Detailed list of areas of practice for Cost Accountants is enclosed as Annexure-III. Some of the areas under various statutes where Cost Accountants have been given equal opportunities with other peer accounting professionals are mentioned under:

♦ Goods and Services Tax [GST]

♦ {However under section 35(5) of CGST Act, Chartered Accountants as well as Cost Accountants were eligible for GST Audit though section 35(5) has been omitted later} [Special audit u/s 66 (i) of CGST shall be conducted by Chartered Accountant or Cost Accountant]

♦ Customs Act

♦ Erstwhile Central Excise Act

♦ Service Tax Act

♦ VAT Audit/Certifications under all states’ VAT Act

♦ Tax Return Preparer (Amendment) Scheme, 2018

♦ Appearances before Sales Tax Authorities

♦ Certification under Foreign Trade Policy

♦ Stock Audit, Concurrent Audit, Forensic Audit and other professional services of various Banks.

♦ In Companies Act 2013, section 138 defines that Internal Auditor shall be a Chartered Accountant or Cost Accountant.

♦ Both are eligible for Insolvency professional by Insolvency and Bankruptcy Board of India (“IBBI”) and Registered Valuer under 247 of the Companies Act, 2013.

• The Government of Kerala, Personnel and Administrative Reforms Department vide its order dated 20.11.2024, has recognized the Cost Accountant qualification as equivalent to that of Chartered Accountant for the purpose of appointment to the posts and service in various Departments/PSUs/ Institutions under the State Government in the appropriate field.
• As per US Laws, Indian Cost Accountants’ firms registered with the PCAOB are permitted to undertake statutory financial audit of all US-SEC listed companies operating anywhere in the world.
• Members of both the Institutes viz. the cost accountant and chartered accountant are governed by exactly the same code of conduct, disciplinary mechanism, and professional ethics.
• Both the Institutes have issued Accounting and Auditing Standards that are binding on their Members in practice.

Judicial Ratios

What is an accountant? According to the Wikipedia, the free encyclopedia, and also the Australian Accountants Directory they are, “a practitioner of accountancy or accounting, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources” Therefore, as per the dictionary meaning as well as in the legal parlance, both Cost Accountant and Chartered Accountant are known as “Accountant” as well as “Auditor”. In this context, the following judgments are relevant:

• Hon’ble Supreme Court upheld the decision of Mumbai High court and held both Cost Accountants and Chartered Accountants as ‘Accountant’ under section 61 of the Maharashtra Value Added Tax Act, 2002. Further, both are recognized as ‘Accountants’ under the VAT Acts of 22 States & UTs of India. [2008 14 STT 348, (2008) 14 VST 69 Bom]

♦ A It may be noted that VAT audits are akin to the tax audit.

• Hon’ble Karnataka High Court in W.A. No. 31061/2013 (CS) has ruled that ‘Auditor’ does not mean a person holding the degree of Chartered Accountant under section 63 of the Karnataka Co-operative Societies Act, 1959 read with Article 243ZM of the Constitution of India.

♦ Writ Petition Nos. 2026-2031 of 2015 filed by the Karnataka State Chartered Accountants in Karnataka High Court challenging the inclusion of Cost Accountants and Cost Accountant Firms for Statutory Audit of annual accounts of Cooperative Societies was dismissed on 29.03.2016.

• Provisions u/s 44AB [introduced in 1984] read with section 288 of the Income Tax Act were challenged by various associations of Income Tax or Sales Tax Practitioners in different High Courts and later in the Supreme Court. All these Courts held that the tax practitioners cannot be covered under the meaning of the term ‘accountant’. Institute of Cost Accountants of India, being set-up by an Act of Parliament, was never a party in any such case. Hence, there was no view expressed by any Court in India that the Cost Accountants cannot be called as ‘accountant’ within the meaning assigned under the Income Tax Act, 1961. We are of the strong opinion that supplementary tax-audit report under section 44AB of the Act signed by the cost accountants can definitely throw significant tax related issues before the Tax Assessment Officer enabling realization of higher tax revenue.
• On the qualification of “Accountant” under the Income Tax Act 1961, the Courts said that Audit is a specialized function by independent professional with necessary qualification who should have qualified with specialized subject of accountancy & auditing in the syllabus; and should have sufficient training & skill to do audits. Income Tax audit also involves the compliance of tax provisions in books of accounts & its authenticity that requires superior & special qualifications possessed & recognized by law. Therefore, the Courts held that the qualification of Chartered Accountants has been recognized by law as a professional qualification of accountants whose syllabus has adequate coverage of Accountancy & Audit and the Members are allowed to practice after training & having gathered experience in skills of audit. Keeping the Court observations in view and comparing the syllabus, pedagogy and training requirements, both Cost Accountants and Chartered Accountants qualify to be an Accountant and an Auditor under the Income Tax Act.

Summary/ highlights of the viewpoints & pronouncements of various Hon’ble Court Judgments listing principles recognizing the qualification of ‘Accountant’ that equally recognizes and applies to Cost Accountants is given in Annexure-IV.

Keeping in view the judicial pronouncements, there appears no reason of assigning restricted meaning to the term ‘accountant’ to mean only a chartered accountant under the provisions of Income Tax Act.

Read Full text of the ICMAI Memorandum: https://publuu.com/flip-book/404268/1772072