CA Suhdir Halakhandi

The Mid-year introduction of New formats of Tax audit reports and further extension of date of Tax audit report without extending the date of filing of return has created a lot of controversy and in this respect two writ petitions have been filed in Hon. Delhi high court and Hon. Gujarat High Court by CA Mahesh Kumar and CA Rajni Shah respectively and both are coming up for hearing on 15th Sept 2014.

CA Sudhir Halakhandi has talked with both of them with respect to the matter under consideration which is being produced for the benefit of readers.

1. CA SUDHIR HALAKHANDI:-

Sir, what was the motivating factor behind filing the writ in Hon. High Courts with respect to tax audit report and Income tax return.

CA MAHESH KUMAR:-

The order of the CBDT under section 119 itself is a motivation because it is a defective order and I can’t expect this type of order from a lawmaking responsible authority like CBDT.  My personal opinion is that one cannot file the ITR without completion of audit. Somebody should come forward and take on this at right forum so after reading this order, my opinion was “it is enough” so the result is this writ.

CA RAJNI SHAH:-

My main motivating factor was self belief and also belief in Indian Judiciary too. I was shocked to know that the biggest administrative body CBDT acted without considering hardship to the people at large. Further once notification about new TAR was introduced a representation was made to extend due date of filing of return also but in vein. Hence it was decided by me to approach Hon. Gujarat High Court for such a small but very important matter.

2. CA SUDHIR HALAKHANDI:-

Sir, What are the chances that the case will be decided on 15/09/2014 and further what type of relief you have asked from  the Hon. Court in this respect since the date 30/09/2014 is very near.

CA RAJNI SHAH:-

I have full faith in Indian Judiciary System and also in readiness on the part of the Courts in understanding the problems on hand. In the instant case the due date of filing of returns is 30th September 2014 and if the writ is not decided at the earliest, it will be irrelevant. I have asked for extension of due date for filing of return in line with extension of date for obtaining TAR. Also it is requested to defer new TAR for one more year. I may also plead before Hon., Court for a direction or instruction to CBDT and other Government agencies to introduce and implement all new forms, utilities etc. well in advance and all stake holders must be taken into confidence.

CA MAHESH KUMAR:-

Yes In my opinion the case should take a definite positive conclusion on that day and the date 30/09/2014 is very near so we should get relief as early as possible. As far as relief is concerned I have asked for deferment of the fresh formats to assessment year 2015-16 and further extension of date of ITR. The matter is in the court so we can only hope for the best in the interest of Trade, industry and the profession since my concern for these sections of society is equal.

3. CA SUDHIR HALAKHANDI:-

Sir, are you satisfied with the stand taken and declared by the ICAI in the matter of extension of TAR date without extending the date of ITR.

CA MAHESH KUMAR:-

Not at all , ICAI  should have taken more  strong steps in these type of situations  and in my opinion in the audit matters CBDT should have consulted ICAI which is also an organisation established under Act of parliament so instead of taking sudden decision it should be introduced by taking ICAI into confidence . If this has not done by CBDT then ICAI should have taken the strong steps like me for the better interest of trade, industry and the profession.  I think as apex body of auditors ICAI should consolidate it’s power which is lying in us i.e. in the members and instead of just making representations should Act strongly against such type of unreasonable decisions of Lawmakers.

CA RAJNI SHAH:-

Frankly Yes and No. yes because at least ICAI made a representation in the matter. But no because at such high level, the request must be specific to be made before Government. ICAI asked for deferment of TAR for one year. But alternatively requested to extend date for TAR only and not for due date for filing of due date. Even after this controversial notification was interpreted to show that the due date of TAR is extended and not for filing the ROI, ICAI did not do the needful.

4. CA SUDHIR HALAKHANDI:-

What is your opinion about Midyear introduction of the fresh formats of the TAR and is this a good practice?

CA MAHESH KUMAR:-

This is not a good practice and should be discouraged and I have taken this in my writ also prominently and these types of practices are undesirable practices and should be countered from every front.  This is my firm opinion and it will stand on it throughout my life.

CA RAJNI SHAH:-

CBDT (Government) has inherent powers to introduce new forms and / or amend existing ones. However it is not a good practice to simply throw the new forms or utilities suddenly and then go on revising the same once defects are observed. For such a large civilised country such trial and error method on the part of Government is not good for either party. This is happening year after year and in last year the TAR utility was amended as many as 13 times. In my view the new forms or utility must be tested in depth and then only introduced. Even the format of ITRs are filnalised very late and hence there is hardly any time left before due date of filing of returns.

CA SUDHIR HALAKHANDI

Thanks a lot to both of you sirs and wish you all the very best.

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0 responses to “Interview with Tax Audit Report Petitioners”

  1. PJ says:

    views expressed by CA Mahesh Kumar & CA Rajni Shah are appreciable along with the step they have taken. However In all these discussion relating to extension of date for filing of IT return applicability of the forms from the next financial year have taken a back seat.

  2. KC says:

    To B.S.K Rao & Mandeep Singh. Please understand that Form 3CD is not the begining and end of tax audit. The audit under 44AB gives just ensures that accounting principles are applied correctly in determining the income. So that the tax officers need not look into details of how the transactions are accounted. It ensures that the revenues are correctly accounted, proper cut-off is maintained etc. As per your logic, it can argued that Form 3CD should be scrapped. But tax audit always has his benefit and the department knows it.

  3. NSG says:

    Mr.Mandeep Singh

    What is the need for Advocates and Courts?

  4. MANDEEP SINGH says:

    I am always surprised from the policies of our government regarding financial audit under INCOME TAX, VAT & SERVICE TAX etc.
    DAY BOOK,CASH BOOK,LEDGER & STOCK registers are maintained regarding financial data of any business. Till today, I am not understand what is need of separate audit regarding same financial data under different tax acts. What is motive behind it of our government, ministry of finance & ICAI for given such kind advice . What is need to verify same books again & again under different tax acts.
    NOW QUESTION ARISES WHETHER OUR GOVERNMENT’s MAIN INTENTION BEHIND IT TO OBTAIN PROPER COMPLIANCE FROM ASSESSEES REGARDING TAX LAWS THAN IT IS NOT A ” AUDIT”. IT IS A LEGAL OPINION ON TAX LAWS AND CHARTERED ACCOUNTANTS ARE NOT AUTHORIZED TO GIVE LEGAL OPINION ON TAX LAWS. IF THEY DOING THAN IT WILL BE CALLED AS” UNAUTHORIZED PRACTICE OF LAW”

  5. B S K RAO says:

    INTERVIEW OF B.S.K.RAO, AUDITOR & TAX ADVOCATE, SHIMOGA-577201

    Before mandating to upload tax audit report, the cost of compliance of 44AB cases in Income-Tax Act was just Rs 10,000/- for marginal assesses doing business in the range of 1 to 1.5 Crores. Now, after mandating to upload tax audit report the same cost of compliance to marginal assesses have gone up to Rs 35,000/- inclusive of DSC Charges. More than this, Non-CA Tax Professionals & assesses should roam around in search of empty slots of CAs to give compliance under Income-Tax Act in Tax Audit cases. To sum-up Section 44AB is troubling the assesses & Non-CA Tax Professionals to support voluntary compliance in Income-Tax Act. Therefore, Ministry of Finance should consider this point & delete Section 44AB from Income-Tax Act.

  6. BSKRAO says:

    Mukesh Sir well said. This is what I am question to CBDT since from 2001, why so much of importance for TAR with out taking utility from it. Even the assessing officer will not ask for TAR in scrutiny proceedings. Further, it is troubling the assesses, Non-CA Tax Professionals and also causing strict hurdle in the process of voluntary compliance under all Indian Taxation Laws.

  7. BSKRAO says:

    (1) CBDT is the policy making body for Income-Tax Law in India. Hence, there is duty on the part of CBDT/DIT to collect & maintain data of section wise wrong claims & amount involved in violation of provisions of Income-Tax law reported in Column No.17, 21, 23, 24 & 27 of Tax Audit Report-Form No.3CD to take policy decisions & also to enable assessing officers of Income-Tax Deptt. to utilize such data to conclude quality assessments. (Very purpose of uploading the same in e-filing website of Income-Tax Deptt.). For the Asst. Year 2013-14 relating to Financial Year 2012-13, Tax Audit Report-Form No.3CD uploaded to e-filing website of Income-Tax Deptt. through Deptt. utility as per CBDT Notification No.34/2013/F.No.142/5/2013-TPL Dt.01.05.2013

    (2) Tax Auditor U/s 44AB of Income-Tax Act is appointed and remunerated by interested assesses. Therefore, the process of tax audit involves adjustment/deletion of transactions involved in violation of provisions of Income-Tax law from books of accounts maintained in digital format. If the Income-Tax Deptt. wants to disprove the above statement, kindly provide statistical information about total of section wise wrong claims & total of amount involved in violation of provisions of Income-Tax law reported in each Column No.17, 21, 23, 24 & 27 of Tax Audit Report-Form No.3CD separately, which relates to returns filed in ITR-4 & ITR-5 uploaded to e-filing website of Income-Tax Deptt. for the Asst. Year 2013-14 (Financial Year 2012-13), U/s 6(1) of Right to Information Act.

    AGAINST THE ABOVE RTI MADE BEFORE DIT(SYSTEMS), I RECEIVED BELOW REPLY:-

    CPIO denied to provide information stating that no such data has been captured in Systems Directorate as Section wise wrong claims reported in Tax Audit Report – Form No.3CD and total of amount involved in violation of provisions of Income-Tax law reported in each column No.17, 21, 23, 24 & 27 of Tax Audit Report-Form No.3CD. Accordingly this is not information as per Section 2(1) of RTI Act, 2005, and thus cannot be provided.

    IN THE ABOVE SITUATION WHY SO MUCH OF IMPORTANCE FOR TAX AUDIT U/S 44AB OF INCOME-TAX ACT, 1961 ?

  8. MUKAMBIKA.K says:

    MUKESH SIR ,
    YOUR VIEWS ARE VERY MUCH IMPRESSIVE SIR I AGREE FULLY WITH YOUR VIEW

  9. Rajesh Bane says:

    We hope all will be well in future

  10. Rajnish Mishra says:

    Thanks a lottttt to both of you. A very much needed and welcome stape you have taken. Wishing you both ALL THE BEST.

  11. mukesh says:

    Namaste. The whole exercise of report is out of date and is not practical as lot of things go un reported. It is well know that the audit reports are not being viewed by anyone. Its a national waste. The energy of the people should be utilised for constructive activities and not otherwise. This is possible by dialogue between the Government and professional fraternity. And one expects the professional fraternity to be sincere and honest. So also the Government.

    Change is in the air and let us change for better. Let us put our energies into constructive activities. Let us simplify things around us collectively, the people and Government acting in unity. This is the call of the time.

    In this scenerio, CBTD should have immediate dialogue and set at rest the spiralling waste of energy and time.

    Thanking all in anticipation of changes.

  12. MANDEEP SINGH says:

    Sir,
    kailash goyal ji,
    you have commented very good. We are following Reports u/s 44AB in income tax laws till today since 1984 without evaluating its output. These reports are not beneficial on revenue as well as on assessee side. Now these reports have become part of litigation. Due to that government loosing revenue since 1984, In present CBDT is facing unnecessary litigation.
    I think only solution for it, delete all reports from income tax. out of them one main is u/s 44AB. In commuter era, we need to change 30 years old trend to get certificates.

  13. kailash goyal says:

    We are very sorry to learn that in the morden age still the law makers behave like in old times do the Mohammad Tuglak and no body is ready to check them . By introducing New TAr and wanting its implementation within such time what denotes . They are putting the peopel in lot of trouble as well as unrest . THe ICAI has not issued the Guidance Note Till date.

    I hope Prime Minister sholud Intervene and have a check on the BRuracractes to avoid such mess of the things .

  14. bharat adesara says:

    Sir Both of you have done good.As ICAI is authority,i am surprised to learnt that ICAI do not initiatesuch strong steps that you both have taken.

    Govt must instruct CBDT and other revenue dept not issue/amend any form etc in mid year.

    wish you best and hope the descision will be in favour of profession,trade and industry at large.

  15. satish boob says:

    friends,its a very good move.but it could have better if P I L public interest litigation be filed along with organizations such as chamber of commerce etc.best of luck.

  16. Ranu Jain says:

    First of all, Thanks to Members of ICAI for taking such steps.

    In my opinion also, it is necessary to stop the unfair practice of introduction of Forms randomly without considering the relevant provision of Law and its effects.
    Introduction of any forms must be in line with the provisions of the relevant Law and authorities must have been taken care of such issues cautiously.

    Further any such steps must be taken in advance not retrospectively that means should apply for futures years, if the authorities feels that the same is necessary then they have to ask for opinion of all the stakeholders.

    In this case also, applicability of the new forms must be deferred by the Court and also issue the instruction to the authorities for the use of their power in the interest of the nation.

  17. K G SURESHSA says:

    sir,

    thanks to both CA’S for taking intiatives for the benifit of tax payers

  18. MANDEEP SINGH says:

    Sir,
    CBDT controls all issues related to tax system. ICAI is a professional body & there should be no interference of professional body in tax related issues. No professional body should be permitted to interference in any matters related to CBDT. If such interference permitted than it can make adverse effect on policies which are made for better tax collection & for develop easy accounting system for assessees.
    SIR REPORTS U/S 44AB FOR NON- CORPORATE ASSESSEES NOT REQUIRED FOR SMOOTH TAX COLLECTION. IT IS NOT BENEFICIAL TILL TODAY SINCE 1984.I AM IN STRONG FAVOUR THESE REPORTS IMMEDIATELY DELETED FROM INCOME TAX & OTHER TAX ACTS.

  19. Tp India sERVICES says:

    hi sirs,
    thanks to both the CAs for taking initiatives for the benefit of all tax payers in India.

  20. Akshay Jain says:

    Dear Sir(s)

    It is a very positive and optimistic move from both of you & I personally feel that our hon’ble court will provide relief to the tax payers and consultants the most.

    Your submission is definitely correct that extension of date vest U/s 139 & not u/s44 AB & hence any extension provided for TAR will be in accordance with extension provided u/s 139 (1)ROI.

    Will pray to god that everyone would be releaved soon.

  21. M K U Varma says:

    Dear Sirs,

    I am really happy to learn that you have done something which ICAI, the apex body which MUST STEP IN VERY FIRST to avoid this sort of hardship to one and all.

    At the same time, I felt that you should have something what is needed if an assessee wants to file his return on 1st of April, if one wants. The Govt. must be ready by 31st. Thsi is not happening since last FOUR years or more.

    Best of luck for a favourable outcome
    M. K. U. VARMA

  22. sandeep sheth says:

    The ICAI has to take the strict action to safegaurd the interest of their members and the public at large. The ICAI has set up under the act of parliament , no one should allow to take it for granted. If one can represent to the CBDT and if the representation fails the ICAI has to file the writ instead of individual member filing the writ.

  23. CA. Mitesh Doshi says:

    Sincere thanks to these 2 legends… At least they are thinking and working something for common interest…

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