Tax audit by advocate

The Bar Council of India (BCI) wants chartered accountants and auditors banned from advising on income tax matters of values below Rs 60 lakh, therefore leaving the domain exclusively to advocates, reported the New Indian Express.

The regulator has sent a communication dated 11 September to the Central Board of Direct Taxes (CBDT) in Delhi and the Income Tax Appellate Tribunal (ITAT) in Bangalore to delete clauses in Section 288(2) of the Income Tax Act 1995 that allow persons other than advocates from advising on tax matters, if the value of the matter is below Rs 60 lakh.

The BCI was acting on the report of its members S Prabakaran and Rameshchandra G Shah, which was considered at its 28 July meeting.

According to the report:

“Originally, under sec 44AB of IT Act, persons carrying on business having turn over exceeding Rs 60 lakh per year have to submit Tax Audit Report in Form 3CD duly signed only by CAs. The Act was redefined, and sec 44AD added to it in April, 2011, which included all business class assessees having a turn over `60 lakh and below within the ambit of tax audit. In view of the redefined clause, assessees approaching the CAs can declare less income and pay less tax. If they approach a legal professional, they have to declare fixed percentage of income and pay more tax, because of no authority to attach such Tax Audit Report. Then, nobody will approach the legal professionals and they will be indirectly threatened to extinction from income tax practice. This will amount to virtual withdrawal of the right conferred on legal professionals under Sec 288(2)(iii) of IT Act.”

The Bar Council of India (BCI) wants chartered accountants and auditors banned from advising on income tax matters of values below Rs 60 lakh, therefore leaving the domain exclusively to advocates, reported the New Indian Express.

The regulator has sent a communication dated 11 September to the Central Board of Direct Taxes (CBDT) in Delhi and the Income Tax Appellate Tribunal (ITAT) in Bangalore to delete clauses in Section 288(2) of the Income Tax Act 1995 that allow persons other than advocates from advising on tax matters, if the value of the matter is below Rs 60 lakh.

The BCI was acting on the report of its members S Prabakaran and Rameshchandra G Shah, which was considered at its 28 July meeting.

According to the report:

“Originally, under sec 44AB of IT Act, persons carrying on business having turn over exceeding Rs 60 lakh per year have to submit Tax Audit Report in Form 3CD duly signed only by CAs. The Act was redefined, and sec 44AD added to it in April, 2011, which included all business class assessees having a turn over `60 lakh and below within the ambit of tax audit. In view of the redefined clause, assessees approaching the CAs can declare less income and pay less tax. If they approach a legal professional, they have to declare fixed percentage of income and pay more tax, because of no authority to attach such Tax Audit Report. Then, nobody will approach the legal professionals and they will be indirectly threatened to extinction from income tax practice. This will amount to virtual withdrawal of the right conferred on legal professionals under Sec 288(2)(iii) of IT Act.”

I have a suggestion,

Don’t you think it would be a great idea if BCI makes a tax council under advocate acts and where tax practicing advocates are have to be register themselves with a separate membership no contacting their existing State Bar Council Enrollment Number (SBCE No).

BCI tax council would keep control over those tax register advocates, and they will handle the tax matters including tax audit, but a domain experience of 5 years or so would be must to become a tax practicing advocate.

Revenue matters:

1-      BCI Tax Council may collect a general membership fees from all tax practicing advocates time to time through which a great revenue will be generate to run the council

2-      BCI Tax Council can setup a governing body to look over grievance matter of assesses

3-      Where BCI Tax Council can start a weekly, monthly and Quarterly journal which will educate people regarding tax matters, like offence and punishments and general tax knowledge with reference of High Court & Supreme Court judgments and day to day changes in tax matters.

4-      Central Board of Direct Taxes (CBDT) and Income Tax Appellate Tribunal (ITAT) will have to consider my another suggestion like to reduce the tax slab and audit limit where maximum people can participate to pay tax and file their returns, through which a huge tax will be collected and the tax collection  revenue will be increased.

5-      There must be standard fee structure for the tax audit and lot’s more

6-      I have another idea to make India free from corruption, I can make India free from corruption within a year, for this I need a new Law has to be passed by the parliament as per my suggestions or the existing law has to be amended with immediate effect, Not only corruption, crime rate will be down almost 90%, crimes Like, money property, honor, kidnapping, rape, murder and bribe etc….

Regards

First thing that I congratulate you for your studies.

Your suggestions are better for the future of Lawyer community... you must communicate this to the Bar council members of your area. or send communications to them...

I think it is not possible to even lower the curruption by any means.. we have to change the mentality of the every person and it is not possible.. Now days curruption is incresed in every state. Nothing will done by enacting laws... It is not so simple....

but your suggestions are good and required to be considered by the Bar council...

Dear Mahesh, Thanks for your suggestions, I will do so…………

Yes regarding corruption, I can make it within a year, I am sure about it, not only corruption I have an idea to reduce terrorism attack and Naksalwad attack (internal terrorist attack in India).

I have already communicated the same thing to President and Prime Minister of India but have not received any update from them. Thinking to sending another letter to them, do you think, if I would contact any news channel for the same will it be helpful for my idea to reach maximum people.

we all  advocate  of ALIGARH (U.P.) strongly  recommended that only advocate should be allowed to practice before any authourty of law, SEC 288 (2) should be ammended as per supreme court jugment

Congratulations on your higher education. I appreciate your ideas for the lawyer community. You can approach the bar council team with your ideas for development. However clearing corruption must start from our day-to-day life.  For more info about tax visit: www.allindiaupdates.in

<a href="https://cadivya.com/"  >Statutory Audit Procedure</a> is done annually by auditing accounts and transactions to manage risks, CA Divya can help you with Statutory audit services.