Case Law Details
Rule 5-A, sub-rule (2) states that every assessee shall, on demand, make available to the officer authorised or the audit party, records, trial balance and income-tax audit report, if any. So here, the officer will demand the documents just to facilitate the correctness of books of accounts and ultimately, the audit will be conducted by the Audit Party headed by the Chartered Accountant/Cost Accountant, as the case may be, deputed by the Commissioner.
It is Commissioner on whose behalf, the officer will collect the material and the Auditor will perform the audit. In any case, the final report duly signed by the Chartered Accountant will be submitted to the Commissioner. In case of Government Autonomous Body, the function of the audit has been assigned to the Comptroller of Auditor General of India.
From the above, it is crystal clear that in case of private assessee, the Commissioner will refer the matter to an officer to collect the material or Chartered Accountant for the purpose of audit. Thus, for the purpose of audit, the material can be collected either by the officer authorized by the Commissioner or by the Auditor himself. But, audit will be performed only by the Chartered Accountant.
Allahabad High Court
Case :- MISC. BENCH No. – 11954 of 2013
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Title creating wrong awareness about audit replace CMA/CA can only conduct audit under service tax. CMA Ramlakhan Ahirwar
Cost accountant also have same right to conduct audit as given in notification it should also be included CMA
CA means both cost accountant and chatered accountant.
ADVOCATES MUST HAVE SPECIAL POWER IN TAXATION OTHERWISE THEIR BASIC RIGHT TO PRACTICE ANY LAW IS VIOLATED
I agree with Mr. Rajeshji Thakkar…
Why CA institute (which is confine to do practice of accountancy only) practice taxation of law which is illegal in nature u/s section 29 to 33 of the Advocate Act. They should be abide with the other Acts & Legal provisions of the Land… do not suppress it…
Dear CA’s we have argued number of times that CA’s are authorized u/s 288 of income tax they have knowledge about accounts.
BUT DEAR FRIENDS ONLY KNOWLEDGE IN ACCOUNTS & MERE READING OF INCOME TAX ACT IS NOT SUFFICIENT FOR PRACTICE OF LAW ON TAX MATTERS BEFORE ITO & TRIBUNALS.
For practice of law study of LOCAL LAND LAWS- FOR AGRICULTURE PURPOSES,EVIDENCE ACT- FOR RECORDING EVIDENCE & CROSS OF WITNESS, IPC- FOR SAFEGUARD OF ASSESSEES any wrong advice regarding EVIDENCE & OTHERS by non Advocates can create problem UNDER IPC. STAMP ACT, CPC, CRPC ETC because interpretation of laws regarding any law in india biased on VARIOUS LAWS IN INDIA.
INCOME TAX, LOCAL LAND LAW, EVIDENCE ACT, IPC, CPC, CRPC, STAMP ACT,NEGOTIABLE INSTRUMENT ACT, CONTRACT ACT SOME ARTICLE OF CONSTITUTION ARE ALSO FOR PRACTICE OF INCOME TAX LAW.
Certainly misconception has been construed in the heading itself. “The petitioners-assessees prayed for declaring the Sub Rule (2) of Rule 5-A of the Service Tax Rules, 1994, as inserted by Notification No.45/2007-ST to be ultra vires.” To fight the case the learned councel of opposite party submitted that “The audit will be performed by a qualified Chartered Accountant”.
Hence learned councel has referred the profession which does not truncates the right of other professional bodies.
In the given case to conclude “that there is no inconsistency in Rule 5A and Section 72-A of the Finance Act, 1994.” Ld councel pointed out “that in case of private assessee, the Commissioner will refer the matter to an officer to collect the material or Chartered Accountant for the purpose of audit. Thus, for the purpose of audit, the material can be collected either by the officer authorized by the Commissioner or by the Auditor himself. But, audit will be performed only by the Chartered Accountant.”
It is to be noted that since the case had referred that the audit (in the specific case) will be taken care of by CA the judgement emphasis on CA to counter “A writ, order or direction in the nature of Certiorari quashing Sub Rule (2) of Rule 5-A of the Service Tax Rules, 1994, empowering opposite party no. 2 to depute departmental officers as Auditor being arbitrary, illegal and ultra vires to the provisions of the Finance Act, 1994, contained in Annexure No.9 to the writ petition.”
When the case itself firmly establish the existence of Section 72-A of the Finance Act, 1994 and Rule 5-A (2) of the Service Tax Rules, 1994 then it is most unwise part of the writer to have such a confusion.
CA INSTITUTE IS IMPOSING THIER ACT ON ALL BY JUST THINKING ONLY ABOUT THERE MEMBERS BENIFTS.IF CAS ARE HAVING AUDIT POWER THEY SHOULD NOT BE ALLOWED TO DO THE WORK OF SMALL PROPERITORS.AS ADVOCATE ACT CLEARLY SAYS THAT ADVOCATES HAVE RIGHT TO PRACTICE IN LITIGIOUS AND NON LITIGEOUS MATTER. BUT AS PER CURRENT PRACTICE NOT A SINGLE POWER IS IN FAVOUR OF ADVOCATES IN TAXATION.HOW ADVOCATES RIGHTS WILL BE SAFEGAURDED WITHOUT POWER IN TODAYS COMPETITATIVE WORLD.ADOCATES ARE FELLLING HANDICAPE IN TAXATION.BCI MUST TAKE THE FAST & POSTIVE ACTION FOR SMALL & MEDIUM ADVOCATES FIRM WHO ARE IN TAXATION.OTHERWISE JAI SHRI KRISHNA
CAs do not practise in the area of criminal laws or Constitution. The client is more happy when a CA represent an income tax case. So, it is not CAs are doing advocates job. The business man deciding who is capable of what. Please dont think otherwise.
It is true that the section 2(1) of CA Act has given exclusive right of practice of accountancy and certifying the accounts to CA class. On other hand there is no right is given to practice of law. However, most of the CA are engaged them self in practice of law. The practice of law is exclusive right of the Advocate class as per section 29 to 33 of the Advocate Act.
Hon’ble Apex Court has given the stay on practice of litigation and non litigation on to other class in the case of Bar Council of India vs A K Balaji. The Bar Council of India has objected the practice of law carried out by the CA class before the CBDT and requested to CBDT to remove the powers given for authorize representative under section 288 of the Income-tax Act other than
advocate and we also support and that should be considered.
as an advocate I support. And other than advocate should not be allowed practice of litigation of taxation matter.The practice of law is exclusive right of the Advocate class as per section 29 to 33 of the Advocate Act.
Dear All,
Section 72-A of the Finance Act, 1994, on reproduction, read as under:-
“72A. Special audit.-(1) If the Commissioner of Central Excise, has reasons to believe that any person liable to pay service tax (herein referred to as ”such person”),-
(i) has failed to declare or determine the value of a taxable service correctly; or
(ii) has availed and utilized credit of duty or tax paid
(a) which is not within the normal limits having regard to the nature of taxable service provided, the extent of capital goods used or the type of inputs or input services used, or any other relevant factors as he may deem appropriate; or
(b) by means of fraud, collusion, or any willful misstatement or suppression of facts; or
(iii) has operations spread out in multiple locations and it is not possible or practicable to obtain a true and complete picture of his accounts from the registered premises falling under the jurisdiction of the said Commissioner,
he may direct such person to get his accounts audited by a chartered accountant or cost accountant nominated by him, to the extent and for the period as may be specified by the Commissioner.
(2) The chartered accountant or cost accountant referred to in sub-section (1) shall, within the period specified by the said Commissioner, submit a report duly signed and certified by him to the said Commissioner mentioning therein such other particulars as may be specified by him.
(3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of such person have been audited under any other law for the time being in force.
(4) The person liable to pay tax shall be given an opportunity of being heard in respect of any material gathered on the basis of the audit under sub-section (1) and proposed to be utilized in any proceeding under the provisions of this Chapter or rules made thereunder.
Explanation.—For the purposes of this section,-
(i) “chartered accountant” shall have the meaning assigned to it in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949; (38 of 1949);
(ii) “cost accountant” shall have the meaning assigned to it in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959).”
(Emphasis Added)
All the readers are requested that do not carry over by the title of the article. Under Service Tax Act Cost Accountants are also entitled for carrying out Audit. Hence people should not think that only CAs are eligible for Service Tax Audit.
The Premier Accounting Chartered Accountants Body making around effort to disseminate both officially and through their acts and deeds of their membership and muscle to undermine the Costing institute in all possible ways. This is another example of the same.
CMA M K Vijayakumar
Dear ALL,
it is true that most of CA are engaged them self in practice of law. If they can practice in law, advocate should given right to conduct the VAT and other audit. Reason behind this most of advocate who is practicing in Direct In-Direct Taxation more qualified than Chartered accountants.
Vipin Raturi
What CAs are representing before the Tax Authoriies is Income tax which does not involve only law but a matters involving Accounting concepts which only an accountant can explain better than the Advocate by way of his femiliarity with the Accounts of teh Client . May calculations and computations are involved in the Income tax matters . Moreover up to the level of ITAT the most of Appeals aurged on Merit , barring a few involving law . It is only for this reasons CAs are alowed to represent up to the level of ITAT.
So the Advocates fourum need not lament over this issue . This is my view
The heading of the judgment is truncated to carry a different meaning as if the right is available only to Chartered accountants. The High court order is not titled correctly. It mentions about chartered as well as Cost accountants. It is requested, the Editor should take due care of such sensitive issues.
The title should be: Chartered Accountant/Cost Accountant only can conduct Audit under Service Tax not the Dept. Officers : HC
It is true that the section 2(1) of CA Act has given exclusive right of practice of accountancy and certifying the accounts to CA class. On other hand there is no right is given to practice of law. However, most of the CA are engaged them self in practice of law. The practice of law is exclusive right of the Advocate class as per section 29 to 33 of the Advocate Act.
Hon’ble Apex Court has given the stay on practice of litigation and non litigation on to other class in the case of Bar Council of India vs A K Balaji. The Bar Council of India has objected the practice of law carried out by the CA class before the CBDT and requested to CBDT to remove the powers given for authorize representative under section 288 of the Income-tax Act other than advocate.
Now, I want to say, that the power is given to advocate class for audit under the Gujarat VAT Act. The CA class is objecting this power as it is his exclusive right as per CA Act. So, what about the practice of taxation law carried out by them, which is not authorize by their Act and it is exclusive right of advocate?