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The circular no 5 dated 26-07-2007 states the following:

” The report of audit under section 44AB is not to be attached with the return. It should not be furnished separately also before or after the due date. However, an assessee should get the report of audit from an accountant under said section before the due date of the furnishing of the return and should fill out the relevant columns of these forms on the basis of such report. The assessee should retain the report with himself. It may be furnished in original during the assessment proceedings. No penalty under section 271B shall be initiated or levied for not furnishing the tax audit report on or before the due date. However, if the audit report has not been obtained before the due date, provisions of section 271B shall be attracted. ”

It is very much evident that the circular lays down in an Unequivocal manner that  the assesses should fill out the relevant columns of these forms on the basis of audit report and No penalty under section 271B shall be initiated or levied for not furnishing the tax audit report

The non penalty clause can’t be interpreted in isolation of the preceding lines. One can not segment it to suit to one’s convenience.

In my opinion, “filling the out the relevant columns of ITRs on the basis of Audit Report” is ‘furnishing” of Audit report as envisaged under section 44AB and 271B.

If for any reason ITR can’t be filed before 3oth September, I strongly recommend that the assessee should fill out only Tax Audit Part (i.e., Part A-OI) in applicable ITR and file it (just like the ITR either manually or electronically as the case may be ) by due date (i. e. 30-09-2009). No doubt, it will require a revision of the ITR later (with all of its drawbacks) . However To me this seems the only pragmatic solution.

Please note that audit report is not required to be filed in paper form whatsoever.

The rate of CST at present is 4% against C-form. Though it is a Central Sales Tax, the Central government does not get any revenue and is totally a revenue receipt of the selling State. The CST at present contributes a substantial amount exchequer to the States and is deep rooted in the tax structure. Also, we have an unbalanced state wise economy in which some states have considerable revenue from CST but majority are consumer states. It was for all such reasons that CST is continued in the VAT regime.  

The Government has proposed to reduce CST to 2% in 2006 and ultimately abolish it in 2007. However, CST and VAT are not compatible. CST has not been made VATable. That is, CST paid cannot be claimed for credit under present VAT system.  

Today, all the business units needs to find a local sourcing of materials for a temporary period of two years, which would not be possible for many traders who have been dealing on inter-state purchases for the last several years. The additional tax burden have to be ultimately borne by the final consumer. Until CST is abolished, the main objective of VAT will be lost and will seriously undermine the benefits of VAT in rationalizing the supply chain management and removing distortions in inter-state movement of goods.

The ministry of company affairs (MCA) intends to insert a clause in the Companies Act that will make audit firms also liable to prosecution as against the existing provisions that limits penal action only to chartered accountants, writes Anindita Dey.

The proposal, being pushed by government agencies, has found favour with MCA and the amendments could be made when the recently-introduced Companies Bill comes up for discussion in Parliament.

“This is the fallout of the Satyam [ Get Quote ] case where the accounting firm got away, while the auditors who represented the firm face punishment. Therefore, there should be appropriate action for the firm as a whole so that it is held liable for such fraudulent practices,” said sources privy to the discussions.

They explained that the logic behind the proposition was that auditors work on behalf of a firm with clearly laid down guidelines. They also share the revenues from the audit and are well aware of the developments in audit assignments. Therefore, an auditor does not work independent of his or her firm.

Proposal for Nomination of Chartered Accountants u/s 14A and 14AA of the Central Excise Act, 1944 for special audit

Sections 14A and 14AA of the Central Excise Act, 1944 provide for special audit, under certain circumstances, to be done only a Cost Accountant, and not by a Chartered Accountant.

In this connection, it may be mentioned that a Chartered accountant is a professional who is regulated by the Chartered Accountants Act, 1949 and has been given the onerous responsibility to attest the fairness, correctness of financial statements as also certify the tax compliance under Income Tax Act, 1961. The syllabus of the final examination has a paper on indirect taxation which tests the in-depth knowledge of the person in this subject. Every Chartered Accountant goes through rigorous 3-years articleship training, which is unparallel in India for any other professional course. A Chartered Accountant possesses complete knowledge of indirect taxation, skill of doing audit and the experience of audit and taxation. There are many Chartered Accountants who have been authoring books on central excise for decades and some of them have been part of important Committees including the Kelkar Committee. Further, there are insignificant number of practising Cost Accountants available, particularly in smaller cities/town, in comparison to the vast and geographical spread of Chartered Accountants in practice, whose number is ever increasing. The Chartered Accountants are not only highly skilled and fully equipped to handle special audits, but are also easily available.
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The economic slowdown will not prevent the government from meeting its 2008-09 direct tax collection target. “We are confident of achieving the 2008-09 target of Rs 3,95,000 crore,” said N.B. Singh, chairman of the Central Board of Direct Taxes (CBDT). According to CBDT officials, British telecom firm Vodafone will pay Rs 10,000 crore as capital gains tax following an order by Bombay High Court.

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DEPUTY GENERAL MANAGER

MARKET INTERMEDIARIES REGULATION &

SUPERVISION DEPARTMENT

DIVISION OF POLICY AND SUPERVISION - III

Tel: 26449261, Fax: 26449021

Email: manojk@sebi.gov.in

MIRSD/ DPSIII/ Cir-26/ 08

August 22, 2008

The Managing Director / Executive Director

of all Stock Exchanges

Dear Sir,

Sub: Internal Audit for stock brokers/clearing members

In continuation with the Circular No.F.1/5/SE/83 dated May 31, 1984 of Government

of India, Ministry of Finance, Department of Economics Affairs, Stock Exchange

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NEW DELHI: While filing tax return this year, you need not attach Form-16 with the form. In a statement on Friday, Central Board of Direct Taxes (CBDT) said that annexures and certificates like Form-16, relating to tax deducted at source are not required for income tax returns filing.

“No annexures, TDS/TCS certificates are required to be annexed to the returns of income.” an official statement said. A senior CBDT official said that all informations regarding TDS are recorded in the PAN (permanent account number) data of a tax payer.

He said the department collects data on TDS from various sources and keep it in the PAN data banks of tax payers. Therefore, he said, the tax payers should just provide the TDS informations in the specified column in the return form. If the figure provided in the return is not matched with the data collected in PAN, then the department would ask the tax payer to furnish the Form-16.

The credit for TDS and tax collected at source (TCS) will be allowed on the basis of details furnished in the relevant schedules of the return forms. Assessing officer will not disallow claim in this regard (return against excess tax paid) only on the ground that the TDS/TCS certificates have not been filed along with the return of income, the statement said.

Also, to enable tax-payers to file returns in the electronic mode, the new return forms have been made annexure-less, except ITR-7, which is the returns for trusts. The electronic return filed with electronic signature will be treated at par with a physical sign.

In case of tax return filed without electronic signature, the department said, the tax payers will get an acknowledgement, which will have return receipt number. A tax official said the tax payer should send the acknowledgement to the department. He said only after receiving the acknowledgement form the tax payer, the assessing officer can assess return filed in the electronic form. The department also said a tax payer can make electronic payment of taxes from the account of any other person.  Source: TOI

RBI/2007-08/280

DGBA.GAD. No. H. 10875 / 42.01.038 /2007-08 April 10, 2008

As you are aware, the Central Board of Direct Taxes vide their Notification No. 34/2008 dated 13-3-2008 (copy enclosed) have made electronic payment of taxes mandatory for the following categories of tax payers w.e.f. 01.04.2008 :

a. A company

b. A person (other than a company), to whom provisions of Section 44AB are applicable.

2. In this regard the following instructions may be kept in mind while implementing the Government Notification:

i) the status of all corporate taxpayers can be identified from the name itself. Further, the 4th digit of the PAN of all corporate assessee would necessary be “C”. Physical challans from such assessees shall not be accepted across the counter.

ii) In case of tax payers covered under Section 44AB, there should be no insistence of any proof of eligibility to pay tax through physical challans at the bank counters. The responsibility of making e- payment rests primarily with the taxpayer. Hence, the word of taxpayers should be taken as final.

iii) the acknowledgement for e-payment should be made available immediately on screen by the bank concerned.

iv) the transaction id of e-payment should be reflected in the bank’s statement.

v) each bank should prominently display on its e-payment gateway page, the official /s to be contacted in case the taxpayer faces any difficulty in making the payment, completing the e-transaction, generating the counterfoil etc.

vi) each bank should give the ITD and NSDL a list of officials with contact particulars, to be contacted if required for any problems faced by ITD or taxpayers.

4. Necessary instructions may be issued to your branches concerned.

Yours faithfully,

(M.T.Varghese)

General Manager

The Institute of Cost and Works Accountants of India on Saturday said it is launching a ‘Certificate Course in Accounting Technician’ to cater to junior accounting job requirements in rural areas.

The course is being introduced in both English as well as Hindi languages and the fee is Rs 8,600, the institute said in a statement.

The course has a duration of one year and would have six papers, practical training, orientation programme and computer training.

It is divided into two parts. In the first part, called the Entry Level, a student has to appear for four papers and in the second part — Competency Level — a student has to take two papers.

The first entry level examination will be held in December 2008, it said.

Any student who has completed 10+2 will be eligible for examination at entry level. Commerce graduated would be exempted from entry level.

Enhanced entitlement to train Articled Assistants notified.enhancement has come into operation effective from 17th August, 2007

Click here 

Source

NOTIFICATION NO. 208/2007

In exercise of the powers conferred by section 295, read with proviso to sub-section (3) of section 40A of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely : -

1. (1) These rules may be called the Income-tax (8th Amendment) Rules, 2007.

(2) They shall come into force with effect from the assessment year 2008-09.

2. In the Income-tax Rules, 1962, for rule 6DD, the following rule shall be substituted, namely:

‘Cases and circumstances in which payment in a sum exceeding twenty thousand rupees may be made otherwise than by an account payee cheque drawn on a bank or account payee bank draft.

6DD. No disallowance under clause (a) of sub-section (3) of section 40A shall be made and no payment shall be deemed to be the profits and gains of business or profession under clause (b) of sub-section (3) of section 40A where any payment in a sum exceeding twenty thousand rupees is made otherwise than by an account payee cheque drawn on a bank or account payee bank draft in the cases and circumstances specified hereunder, namely:

(a) where the payment is made to

(i) the Reserve Bank of India or any banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(ii) the State Bank of India or any subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);

(iii) any co-operative bank or land mortgage bank;

(iv) any primary agricultural credit society or any primary credit society as defined under section 56 of the Banking Regulation Act, 1949 (10 of 1949);

(v) the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);

(b) where the payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender;

(c) where the payment is made by

(i) any letter of credit arrangements through a bank;

(ii) a mail or telegraphic transfer through a bank;

(iii) a book adjustment from any account in a bank to any other account in that or any other bank;

(iv) a bill of exchange made payable only to a bank;

(v) the use of electronic clearing system through a bank account;

(vi) a credit card;

(vii) a debit card.

Explanation.- For the purposes of this clause and clause (g), the term “bank” means any bank, banking company or society referred to in sub-clauses (i) to (iv) of clause (a) and includes any bank [not being a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)], whether incorporated or not, which is established outside India;

(d) where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee;

(e) where the payment is made for the purchase of

(i) agricultural or forest produce; or

(ii) the produce of animal husbandry (including livestock, meat, hides and skins) or dairy or poultry farming; or

(iii) fish or fish products; or

(iv) the products of horticulture or apiculture,

to the cultivator, grower or producer of such articles, produce or products;

(f) where the payment is made for the purchase of the products manufactured or processed without the aid of power in a cottage industry, to the producer of such products;

(g) where the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person who ordinarily resides, or is carrying on any business, profession or vocation, in any such village or town;

(h) where any payment is made to an employee of the assessee or the heir of any such employee, on or in connection with the retirement, retrenchment, resignation, discharge or death of such employee, on account of gratuity, retrenchment compensation or similar terminal benefit and the aggregate of such sums payable to the employee or his heir does not exceed fifty thousand rupees;

(i) where the payment is made by an assessee by way of salary to his employee after deducting the income-tax from salary in accordance with the provisions of section 192 of the Act, and when such employee -

(i) is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and

(ii) does not maintain any account in any bank at such place or ship;

(j) where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike;

(k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person;

(l) where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers cheques in the normal course of his business.

Explanation.- For the purposes of this clause, the expressions “authorised dealer” or “money changer” means a person authorised as an authorised dealer or a money changer to deal in foreign currency or foreign exchange under any law for the time being in force.’.

[F. No. 142/4/2007-TPL]