TMI BlogAUDITOR’S RESPONSIBILITY AND AUTHORITYX X X X Extracts X X X X X X X X Extracts X X X X ..... keep in view, the prevalent trade practices, the economic realities as also the industry and business environment in which the assessee/taxpayer operates. Therefore, the auditor should take a balanced and rational approach while conducting the audit. Besides, the auditor is expected to play a key role in promoting voluntary compliance by the assessees/taxpayers. During the course of the audit, if certain technical infractions, without any revenue implications, arising due to bona fide oversight or ignorance of the assessee/taxpayer, are noticed, the assessee/taxpayer should be guided for immediate correction. Such cases should also be mentioned in working papers. The auditor should also apprise the assessee/taxpayer of the provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted . They should be speaking documents that clearly explain why a particular area was included in the audit plan as well as the basis for arriving at every objection that goes into the draft audit report after audit verification. The documentary evidence which has been relied upon in arriving at certain conclusion should invariably be cited and included. 3.3 Dealing with the public: 3.3.1 The objective of the Central Excise Department is to collect correct amount of duties/taxes levied under the Central Excise/Service Tax Law in a cost effective, responsive, fair and transparent manner and also to maintain public confidence in the system of tax collection. This should be reflected in the auditor s conduct and attitude. The audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 Confidentiality should be maintained in respect of sensitive and confidential information furnished to an auditor during the course of audit. All records submitted to the audit parties in an electronic or manual format, should be used only for verification of levy of excise duty/service tax or for verification of the tax compliance. These shall not be used for any other purposes without the written consent of the assessee. Maintaining the confidentiality is necessary to secure the trust and co-operation of the assessee/taxpayer. 3.4 Authority for an auditor: 3.4.1 There is no separate cadre known as `Auditor' either under the Central Excise Law or under the Service Tax law. The departmental audit is conducted by the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d premises for carrying out verifications and checks for conduct of audit when authorised by the Commissioner under rule 22 of the Central Excise Rules 3.4.3.3 Rule 22 of the Central Excise Rules, 2002 provides that the Commissioner may empower an Officer or depute an audit party for carrying out scrutiny or verification of records of the assessee. The rule also obliges an assessee to make available records for such scrutiny. The statutory backing for rule 22 flows from clause (x) of section 37(2) and the general rule making powers under section 37(1) of the Central Excise Act, 1944. Clause (x) of section 37(2) empowers the Central Government to make rules for verification of records and returns to check the correctness of levy and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer, who is assigned the duties of audit in Service Tax, is the proper officer for conduct of Service Tax audit. 3.4.4.2 The Service Tax Law through the Finance Act, 1994 and Service Tax Rules, 1994 do not prescribe any specific records to be maintained by the assessee/taxpayer. However, Rule 5 of the said Rules deals with records. In this regard the following provisions are relevant: i. In exercise of the rule making powers under clause (k) of sub-section (2) of section 94 of the Finance Act, 1994, the Central Government has inserted a new rule 5(A)(2) in the Service Tax Rules, 1994 vide notification no. 23/2014-Service Tax dated 5th December, 2014. This rule, inter alia, provides for scrutiny of records by the audit party deput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is not volunteering to submit the same on the basis of letter issued by the auditor. However, where it is felt necessary that recording of the statement of the taxpayer/assessee is necessary, the Audit Commissioner may forward such cases to the jurisdictional Executive Commissioner, with a selfcontained note for taking appropriate/necessary action like carrying out further investigation, issue of show cause notice etc., as deemed fit. In this regard, in case of difference of opinion between the Audit Commissioner and the Executive Commissioner the Principal Chief Commissioner/Chief Commissioner may decide the issue. - Manuals - Ready reckoner - Law and practice - Reference Guide - Quick Commentary Tax Management India - taxmanageme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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