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Indian Lawyers Calls For Changes To Tax Audit System

by Mary Swire, Tax-News.com, Hong Kong

02 January 2014


Lawyers should be permitted to sign and endorse tax audit certificates and reports, the Bar Council of India (BCI) has said.

The BCI has written to the Indian Finance Ministry and Central Board of Direct Taxes (CBDT) to inform them that a close reading of the Income Tax Law and Advocates Act has "made it clear that such audit reports/certificates could be signed only by advocates."

A new report, published following a BCI committee investigation, calls for an end to the current system whereby only chartered accountants (CAs) complete such processes and appear before the relevant tax authorities.

The report states: "CAs are trained in accounts only and not in interpretation of tax law and procedures." It claims that to practice income tax law and fill in tax audit report forms, "one should specialize in [the] interpretation of income tax law and procedures, besides analysing [the] intention of the legislature, Civil Procedure Code, and [the] impact of furnishing affidavit ad sworn statements in the course of I[ncome] T[ax] proceedings."

The committee concluded that "when legal practitioners are the only class of persons entitled to practice law, there is no justification for prohibiting advocates from issuing certificates or report under the IT Act."

The BCI alleges that were the system changed, the tax base would grow and revenue collection would improve.

TAGS: compliance | Finance | tax | tax compliance | India | legal services | law | audit | tax planning | tax reform | trade association | trade | services

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