TMI BlogSupersession of Instruction No.9 of 2006, Dated 7-11-2006; Instruction No.16 of 2013, Dated 31-10-2013 and Circular No. 8/2016, Dated 17-3-2016X X X X Extracts X X X X X X X X Extracts X X X X ..... tual problem of reconciliation of pendency will be resolved with launching of a web-based portal by the office of the C AG osparas.ap.nic.in where CIT-wise / AO wise pendency have been hosted. The portal has the facility for uploading of reply by the CIT concerned. In due course of time, the interface of ITBA would also be linked with C AG's new portal for complete work flow automation. 1.3 With the technological assistance of ITBA and CAG portal in place, Standard Operating Procedure (SOP) have been aligned to workflow in ITBA, with defined roles and responsibilities of each functionary in the hierarchy. The timelines for each step to be executed by officer concerned has been laid down hereunder. 1.4 In supersession of all existing instructions on this subject in general and instruction No 9 of 2006 , Instruction No 16 of 2013 and Circular No 8/2016 in particular, this instruction is issued for strict compliance by all concerned. 2. Audit Procedure followed by CAG office 2.1 The field offices of CAG (Comptroller and Auditor General of India) carry out normal audit of assessments which is referred to as 'compliance audit'. Further, aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tro, corporate, non-corporate etc) Part-IIB Minor Audit Observations in the prescribed limits applicable to different categories (sections A, B, C, D etc) Part-III Other Audit Observations - NMV (No Monetary Value) paras Part-IV List of cases not produced to audit Part-V Disclaimer Certificate 2.4 The objections are settled after considering the replies sent by the PCIT. The C AG prepares an Audit Report in respect of Direct Tax which contains illustrative cases to support their conclusion regarding loss of Revenue due to mistake in making assessments. These illustrative cases are taken from Local Audit Reports based on quantum of loss of revenue, even if objections are not accepted by the department. 2.5 As a first step towards conversion of audit objection to Draft Para , the Director (ITRA) sends particulars of objections to the PCIT through a 'Statement of Fact' (SOF). The SOF to make Draft Para can be proposed even in cases where objection has been settled after completion of remedial actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n objection are not found correct, the AO shall give reply to the audit specifying correct facts. 4.3 In case of legal question or mixed issue(s), the AO shall specify as to whether or not, the factual aspect of the objection is correct and convey the correct facts relating to the factual issue(s) to the LAP. For the legal question raised as such or in a mixed issue, the Assessing officer may state that the reply would follow after due examination of the matter. 4.4 The Assessing officer shall send a status report to the PCIT as regards mistakes involving legal question / mixed issue so that a view may be prepared for response on receipt of LAR. 5. Local Audit Report (LAR) stage 5.1 The Local Audit Report (LAR) is sent by the Group Officer concerned, dealing with audit of Direct taxes in the office of Director General of Audit or Principal Director of Audit (Central) [referred to as 'concerned CAG officer' in this Instruction] to the Assessing officer with a copy to PCIT and CIT(Audit). Until the time the process of receiving LAR on system begins, the Assessing officer shall enter all the objections in the LAR in 'Revenue Audit' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CAG officer after lapse of two months. 5.10 The CIT(Audit) shall also be invited to the meeting and he shall play an active role for maintaining consistency of approach on a particular issue. In the meeting, efforts will be made to resolve the difference of opinion and arrive at common view, as far as possible. Detailed 'Minutes of the Meeting' shall be recorded and sent to all concerned . However no remedial action shall be initiated in respect of objections not accepted by PCIT even after discussion in meeting. Unresolved cases: 5.11 Where a Revenue audit objection remains unresolved at field level, the PCIT shall enter in ITBA system, the outcome of meeting referred to in 5.9 above, as per minutes recorded. In such cases the ADG (Audit) shall be able to generate a summary of objection containing all information as in proforma at Annexure-2 of this Instruction in order to take up the matter in the headquarter office of C AG. 5.12 The ADG(Audit), acting on behalf of CBDT, shall hold meeting with the Principal Director of Audit (Direct Taxes) in the Hq office of C AG to discuss the objections remaining unresolved at field level. For this purpose, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the format as prescribed in the existing Instruction shall continue to be maintained. 9. Reporting system: 9.1 All work including correspondence regarding revenue audit shall be done through ITBA system. The statistical and other reports, as may be required, shall be generated from the ITBA system itself. However for monitoring and control following standard MIS reports are prescribed: ( a ) Statistical report, to ascertain progress, in respect of number of audit objections raised, settled, pending etc in the format given at Annexure-5. ( b ) List of pending audit objections with particulars as may be required out of those prescribed in Annexure-6. For Audit Set-up 9.2 The CIT(Audit) shall be able to generate MIS report in Annexure-4 for his jurisdiction or for each PCIT charge. The PCCIT shall be able to generate similar MIS report for his jurisdiction or CIT(Audit) wise, or CCIT wise or PCIT wise as may be required. The ADG(Audit) shall be able to generate similar MIS report for all or any of the PCCIT or CCIT or PCIT or any CIT(Aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visory officers. 12.2 However, until the time Audit Module in ITBA system is fully functional, the ledger card will continue to be maintained in the offices of the PCIT concerned as well as the CIT(Audit) in the format as in existence prior to this Instruction coming into force. 13. The ADG (Audit) 13.1 ADG (Audit) shall act as the coordinating agency for the various CsIT (Audit) to promote uniformity of view on same issue. 13.2 He shall monitor progress of settlement of objections both internal and revenue. 13.3 The ADG (Audit) shall try to reconcile the view of department and CAG in cases remaining unresolved at field level so that the number of draft paras may be minimized. 14. The above instructions would apply mutatis mutandis to the Revenue Audit's observations in cases covered in Performance Review so far as taking of remedial action, accountability measures and necessary action against the officer / staff responsible for the mistake is concerned. 15. When the Audit Module of ITBA becomes functional, entire work flow of audit, including all correspondence, shall be through ITBA system. The correspondence with C AG official, if received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to audit (after adjustment of pre-paid taxes) 15 Name Employee code of AO who made the order under audit 16 (i) Date of Internal Audit, if done (ii) Whether this Objection was raised by the Internal Audit Yes/No 17 Local Audit Party No 18 Amount of under assessment/over assessment 19 Revenue effect Tax + interest 20 Objection Major or Minor Drop down 21 Category - Factual/Legal/Mixed 22 Section(s) involved in objection 23 Body of objection as per LAR 24 Issue in objection in brief (150 character) (drop down list as below) Suggested form of drop down list for column 24 above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C AG S. No. Particulars 1 PCCIT and CCIT Region 2 PCIT/CIT charge 3 Assessment unit having jurisdiction 4 Name of the Assessee 5 Assessment Year 6 Reference No. of LAR 7 Loss of Revenue reported 8 Audit objection as in LAR 9 Reply of the PCIT 10 Rejoinder, if any, received from ITRA 11 Outcome of meeting of at field level (refer para 5.11) Annexure-3 PROFORMA-A PROFORMA REPORT ON THE DRAFT AUDIT PARA No. . . . . . . . . . . . . . .PROPOSED TO BE INCLUDED IN THE AUDIT REPORT BY THE C AG FOR THE YEAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in which the mistake occurred must be stated 20 Date of issue of notice and section for initiating remedial action. 21 Date of order passed as remedial action 22 Amount of additional demand raised ascribable to Audit objection 23 If remedial action is barred by limitation, reasons and circumstances thereof. [Name] Pr COMMISSIONER OF INCOME-TAX 24 Comments of CCIT concerned (Name) Chief Commissioner of Income-tax Annexure-4 PROFORMA-B PROFORMA REPORT ON THE DRAFT AUDIT PARA No . . . . . . . . . . . . PROPOSED TO BE INCLUDED IN THE AUDIT REPORT BY THE C AG FOR THE YEAR . . . . . . . . . . Board's reference calling for the report. . . . . . . . Dated . . . . . . . . . PART 'B' (only in respect of objections that are accepted by PCIT) 1 Name of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply has not been sent, after receipt of LAR, reasons thereof and action taken against the officer/staff concerned. 19 Whether the case was earlier checked by Internal Audit? 20 If seen by internal audit and mistake not detected, whether explanation of audit unit concerned, called for? 21 PCIT's comments thereon. 22 General remedial measure taken to avoid recurrence of such mistakes in future 23 Whether the case was reviewed for similar mistakes in earlier and later years? 24 Is there any implication under the other Direct Tax Laws? If so, whether appropriate action has been taken? [Name] PRINCIPAL COMMISSIONER OF INCOME-TAX 25 Comments of CCIT concerned [Name] Chief Commissioner of Income-tax Annexure-5 Monthly report of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 Break up for the authorities below should be available till basic unit i.e. AO, IAP etc. Annexure-6 List of pending audit Objections Report for the: [PCCIT / CCIT/DGIT / PCIT / CIT(Audit)] drop down Status as on: [normally as on last day of the previous month/any specific date] PART-I - MAJOR AUDIT OBJECTIONS S. No. Unique Audit Objection Number Date of raising of objection Name of the assessee PAN Status of Assessee Spl Range/ Circle/ Ward AY : Date of order under audit LAR reference Gist of objection in Brief 1 2 3 4 5 6 7 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
