List of CAs issuing more than 400 TAR; 18.87% CAs issued more than 45 Tax Audit Report- CAG

[CA MANJUNATH R S]

Control on number of tax audit assignment

In order to maintain the quality of tax audit to be conducted by CAs, ICAI issued Guidelines¹⁵ for the Members under the provisions of the Chartered Accounts Act, 1949. It prescribed a limit of 45 tax audit assignments that can be under taken by a CA in a FY under Section 44AB of the Income Tax Act, 1961. In case of a Firm, specified number of tax audit assignments shall be applicable for every partners of the Firm. In view of the enhancement of professional competence of members to perform service in IT enabled environment, ICAI raised (February 2014) the limit of tax audit assignments from 45 to 60, to be made effective from audits conducted during FY 2014-15 onwards.

We observed that there was no system in field offices of ITD to see that a CA had not crossed the limit prescribed by ICAI on number of tax audit assignments. ICAI has prescribed Form of Tax Audit particulars to be maintained by members/Firm. We approached ICAI (August and September 2014) to intimate whether any mechanism exit to ensure the compliance of its guidelines by CAs. It was informed by ICAI (September 2014) that maintenance of records is self regulatory mechanism and the information so maintained can be called upon by ICAI for checkingadherence of the guidelines. However, any formal complaint received by ICAI was acted upon within the framework provided in the Chartered Accountants Act and the Misconduct Rules framed there under.

As per the information provided by DGIT (Systems) of ITD (August 2014), 65,898 CAs submitted at least one TAR for AY 2013-14. Out of total 65,898 records of CAs, 81.13 per cent of CAs adhered to the limit prescribed by ICAI. Remaining 18.87 per cent of CAs (12,435 CAs) submitted more than 45 TARs. Excess number of TARs ranged from 46 to 2471. Table 3.1 shows stratification of the total number TARs issued by CAs and its percentage.

15 Council Guidelines no. 1-CA(7)/02/2008 dated 08 August 2008

Table 3.1: Stratification of total TARs issued by CA for AY 2013-14

Range of TARs issued	Total Number of Accountants	Percentage of Total Accountants
1-45	53,463	81.13
46-100	10,838	16.45
101-200	1,364	2.07
201-300	166	0.25
301-400	45	0.07
401-500	10	0.02
501-1000	11	0.02
> 1000	1	0
Total Accountants	65,898

Table 3.2 shows top 22 CAs who issued more than 45 TARs for AY 2013-14.

Table: 3.2 showing CAs issuing more than 400 TAR for AY 2013-14

Chartered Accountants	Membership Number	Number of TARs
1.        Pralay Chakraborty	059736	2,471
2.        Partha Pratim Mukhopadhyay	056366	990
3.        R Muralidharan	024060	796
4.        Rajesh Kumar Gupta	074194	640
5.        Swapan Acharyya	062815	638
6.        D Sundararajan	010150	619
7.        B C Vadivel	206700	612
8.        Raj Hans	087767	586
9.        Samir Pushpvadan Gandhi	039251	551
10.    Navin Agarwal	078175	522
11.    Poulose Shaji	022909	513
12.    A Kulathooran Pillai	018792	510
13.    Sukdeb Haider	051185	494
14.    Chetan Premchand Shah	031239	487
15.    P Ramalingam	019516	478
16.    Arun Kumar	097929	461
17.    S Vairavanathan	004736	457
18.    Radhakanta Das	062863	428
19.    Suresh Kumar Goyal	084153	417
20.    Hetal Bhailalbhai Dhamelia	119864	415
21.    TS Ventakaraman Lakshmi	022214	414
22.    Jai Bhagwan Mittal	084512	401

 The information available with DGIT (Systems) has not been shared by ITD to ICAI nor did ICAI approach ever to ITD to furnish such information. In view of lack of monitoring of number of tax audit assignments either by ITD or ICAI, the purpose of maintaining the quality of tax audit have suffered. As the work of tax audit assignments is voluminous work, issuing more than prescribed TARs is fraught to suffer in quality.

In the interest of revenue, the Act should have provision to prescribe for quality of tax audit assignments rather than relying on ICAI. Therefore, ITD may consider making suitable provision in the Act by restricting number of tax audit assignments in consultation with ICAI. In an automated environment of e-filing by CAs, prescribed limit can be adhered by providing suitable controls.

There is no system in ITD to validate the membership number issued by ICAI to stop unscrupulous CAs practicing the profession.

Source- http://www.saiindia.gov.in/english/index.html

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Thanks & Regards,

CA Manjunath R S  BBM, ACA
Partner
M/s Suman & Manjunatha
Chartered Accountants,
No 20/3, 1st Floor,
Opp Vasavi Convention Hall,
Vanivilas Road, Basavanagudi,
Bangalore - 560 004

Ph:- +91 98809 19391