TMI BlogAudit procedure streamlined.X X X X Extracts X X X X X X X X Extracts X X X X ..... Local Audit. All co-operation assistance should be extended to the Revenue Audit Party (RAP) during the audit process. The records requisitioned by the RAP should be entered in the 'Register' maintained for this purpose and complete records should be made available. If it is not possible to make available any particular record required by the RAP, the reasons for the same should be communicated to the RAP, in writing. The record should on no account be withheld on flimsy grounds. 2.2 The CsIT should ensure that complete and accurate record of revenue audit objections are maintained in the 'Registers' prescribed in Chapter-12 of the Internal Audit Manual, 2003 [ref pages 156-157 ], and in the Revenue Audit Module of AST. The CsIT should also ensure that the pendency of objections are reconciled within a month of receipt of the annual statements furnished by the AGs to CsIT. 2.3 The Revenue Audit party issues an Audit Memo ( Half Margin Note) on any irregularity or mistake observed in regard to individual cases. The AO should furnish a reply to the Audit Memo, in all cases, including cases where the validity of the objection needs further consideration, stating clearly whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above endorsement, the DIT(Audit) will move ahead with the preparation of the comprehensive ATNs after securing such further information and particulars from the field formations as may be required. 2.10 After the receipt of the Audit Report presented to the Parliament, the DIT(Audit) will give concluding shape to the ATNs on Audit Paras, and send these to the Board, through the DGIT(Admin.), for submission to the C AG of India after necessary vetting and consideration in the Board. 3. Accountability: 3.1 Furnishing of records to Revenue Audit : It has been noticed that, in spite of the existing Instruction Number 1071 dated 28-6-1977, records and the relevant registers are not being made available to RAP without adequate reasons, which, (a) invites adverse comments from the Hon'ble Public Accounts Committee and the C AG of India, and, (b) results in loss of substantial revenue which could be collected on account of audit objection had the records been produced to the Audit in time. Henceforth, the C.Cs./Ds.G. IT., through the Cs.l.T concerned, shall ensure that, (a) the relevant records are given to the officials of the C AG on requisition, and that, (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter involves interpretation of statute and there is no decision of any High Court on the matter. However, in cases falling under (b), (c) and (d) above, the remedial action initiated can be dropped only with the prior approval of the Board. For this purpose, the CIT should immediately send a reference to the Board for decision, not later than three months from receipt of LAR by the CIT concerned, stating cogently therein the detailed reasons for consideration of the proposal for dropping of the remedial action initiated. (v) Remedial action need not be initiated in a case where, (a) the CIT is of the view that the interpretation of fact or law by the audit is in conflict with a decision of the Supreme Court and the decision squarely applies to the facts of the case, or (b) the CIT is of the view that the interpretation of fact or law by the audit is in conflict with a decision of the jurisdictional High Court, which is squarely applicable to the facts of the case and the operation of which has not been stayed by the Supreme Court, or (c) the CIT is of the view that the Assessing Officer has acted in conformity with Board's Instruction/Circular, or (d) the audit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the receipt of the Draft Para Key by the CCs (CCA), with a copy to the Board, to facilitate preparation of the Action Taken Note (ATN). 7. Explanation of officers / staff concerned and disciplinary action: With a view to enforcing accountability, the CCsIT / DsGIT concerned should ensure that the following procedure is strictly followed: 7.1 Ledger Card : The present system of maintaining Ledger Cards, as detailed in Chapter 5 of the Internal Audit Manual, 2003 should be followed meticulously. (a) the Ledger Cards should be maintained by the CsIT concerned, and, (b) a quarterly report thereof should be sent to the CCs (CCA) [the CIT (Audit) in metropolitan charges], and, (c) the CCs (CCA) [the CIT (Audit) in metropolitan charges] should maintain a centralized data of the Ledger Cards of his region; 7.2 Calling of Explanation Action thereon : Explanation of the officer and staff concerned should invariably be obtained where the Revenue Audit objection, involving revenue of Rs. 1,00,000 or more in Income-tax/Corporate Tax and Rs. 30,000/- or more in other Direct Taxes, have been accepted, or the mistakes, inter alia, arise from any one or more of the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly allowed. 7.5 However, where objection is against summary assessment under section 143(1) and the objection pointed out by Audit could not have been considered at the time of summary assessment under section 143(1), the explanation of the AO staff should not be called for. 7.6 Procedure for Appropriate Action against the erring officer/staff; (a) The CIT in whose charge the mistake has occurred [ the CCIT concerned where the default in terms of 7.3 above is on part of the CIT ] should call for the explanation of the officer / staff responsible for the mistake, and indicate whether the explanation is acceptable or not and as to whether the mistake was bona fide or otherwise; (b) After considering the explanation of the officer / staff concerned, where it is proposed that a simple warning should be issued, the final decision to give simple warning should be taken by the CIT in whose charge the mistake occurred but he should communicate his decision along with the facts of the case to the Commissioner under whom the officer / staff is working and the latter should administer the warning; (c) where the mistake pointed out in the Revenue Audit objection is of a serious n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not correct, full correct facts must be stated (ii) Reasons for acceptance or non-acceptance must invariably be given (iii) If the objection is acceptable, the circumstances in which the mistake occurred must be stated 4. (a) Date of issue of notice(s) initiating remedial action and the section under which issued ? (b) Whether appropriate remedial action was taken with CIT's/Addl. CIT's prior approval as per Board's instruction. If so, when? If not, reasons thereof. (c) Date of order revising the assessment(s)/other order(s) (d) Amount of additional demand raised ascribable to Audit objection or amount of refund allowed/adjusted PART'A' Contd. (e) If the amount of revenue mentioned by the Audit is not correct, give reasons. (If the Variation is due to Variation of the total income after receipt of audit objection on account of appeal, revision etc., the same should be clearly indicated.) 5. (a) If no remedial action is taken, give reasons (b) If remedial action is barred by limitation, reasons and circumstances thereof. RECEIPT OF DRAFT AUDIT PARA FROM BOARD : Date PROFORMA REPORT SENT TO BOARD : Date [Name] COMMISSIONER OF INCOME ..... X X X X Extracts X X X X X X X X Extracts X X X X
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