This follows a recommendation by the Income Tax (I-T) department after the Satyam accounting fraud issue broke in January following founder Ramalinga Raju's confession. I-T officials said since the returns were e-filed, there was no provision to check whether or not the tax audit reports were certified by the chartered accountant.
Current norms require all companies to conduct audits under section 44 AB, which is otherwise known as "tax audit". The section covers almost all listed or unlisted companies whose total sales or turnover exceeded Rs 40 lakh. In the case of individuals, gross professional receipts should be over Rs 10 lakh.
These companies are mandatorily required to file their returns electronically. While a tax audit report is certified by a chartered accountant, there is no provision for this in an e-filing system. Therefore, it is difficult to ascertain whether the tax audit has been done properly.
Source: Business-standard Tax audit report may be made mandatory for e-filing of returns
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By ugesh sarkar, Section News
Posted on Fri Jun 12, 2009 at 01:53:46 AM EST
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Officials explained that these measures might not rule out fraud but could at least throw up some indicators about the company.
I-T departments across India have also made a recommendation for rolling back the time bar for assessment of cases to March from December. Before 2007, the time limit for assessment of cases was March 31, 2009, which coincided with the closure of the financial year and transfers of personnel.
However, in 2007, the time limit was reduced to December 31 so that officers could also be involved in the recovery of taxes following the assessment. This deadline, however, left very little time for proper scrutiny and investigation of cases, said officials.
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