Dear All,
Please check if my understanding is correct as written below each question:
1) The ITO issued the notice to the Tax Auditor (CA Firm) under section 133(6) to furnish the documentary evidences:-
"You have conducted the Audit and prepared audited final accounts in the above mentioned case for the aforesaid year. You are kindly requested to furnish base materials available with you, if any based upon which you have prepared audited final accounts"
Reply:
Sir, please refer our audit report, preparation of financial statements is responsibility of the management of the company and we have limited scope of providing our opinion on the financial statements. In the light of the fact we are unable to meet the requirements of documents as stated by you.
2) What is the course of action available to the CA Firm. Are they legally bound to maintain the confidentiality of their clients' affair. Will they be rightful if they decline to furnish the above information to the AO
Reply:
Further to our reply we would like to bring to your notice that any communication between a CA and his client is a privileged communication and we may need to obtain prior permission from our clients to share some of the documents. So if you can provide us the list of documents required by you we may take appropriate steps to provide you the documents required.
3) Is the ITO's action is lawful in issuance of such notice to the Auditor.
Reply:
The ITO has a right to call for any documents which he requires for completion of assessment and believes to be available with some one else including CA's.
4) What are the perceived consequence in case if they (1) refuse to provide information, and (2) if they provide the requisite information to the ITO.
Reply:
The ITO may conduct search of the CA's premises in extreme situations otherwise penalty of Rs. 10,000/- per default to comply with the notice. (normally nil)
A CA is required to be more diplomatic in dealing with the situation!!!!
Regards
Manoj Pandit
On Mon, 08 Apr 2013 17:07:36 +0530 wrote
>
Hi Rani,
ITO has erred in demanding "base material" from the Auditors.
2) - yes
3) - no
4) since the act of the ITO is wrong, there are no consequences arising therefrom.
You may decline to ITO stating that "there are no provisions in the Act for them being asked directly to provide additional information or any "base material" etc, while the tax audit report as per the Act has been duly submitted to the clients by us."
May be you can add that "your such a notice dated ..... amounts to misuse of powers under section 133(6)"
You may further challenge "what is intended by the "base materials" because the audit is conducted based on the books of accounts etc as maintained by the client and the list of such records maintained by the client aer already disclosed in our tax audit report dated ..... "
However, if you look from the ICAI Code of Conduct / Ethics point of view, you are bound to take due professional care of your cleints' tax matters - though the ITO has erred technically.
Advise - point out the technical errror to the ITO u/s 133(6)
On Fri, Apr 5, 2013 at 12:46 PM, Kailash
Sir,I wish to solicit the valued views of the members on the following :-
1) The ITO issued the notice to the Tax Auditor (CA Firm) under section 133(6) to furnish the documentary evidences:-
"You have conducted the Audit and prepared audited final accounts in the above
mentioned case for the aforesaid year. You are kindly requested to furnish base materials available with you, if any based upon which you have prepared audited
final accounts"2) What is the course of action available to the CA Firm. Are they legally bound to maintain the
confidentiality of their clients' affair. Will they be rightful if they decline to furnish the above information to the AO
3) Is the ITO's action is lawful in issuance of such notice to the Auditor.
4) What are the perceived consequence in case if they (1) refuse to provide information, and (2) if they provide the requisite information to the ITO.
Your valued comments are awaitedThanking you
RANI
--
Best Regards,
CA SUDHIR G AGRAWAL
SUDHIR G AGRAWAL & ASSOCIATES
CHARTERED ACCOUNTANTS
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URL: http://sudhirgagrawalassociates.icai.org.in/
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