As per the recent Report No 32 of 2014 (Performance Audit) of CAG, 22 chartered accountants have done more than 400 tax audits for assessment year 2013-2014 instead of the present limit of 45 tax audits. Out of the list one chartered accountant has done 2471 tax audits for the assessment year 2013-2014.
To maintain quality of tax audit conducted by chartered accountants, ICAI has issued guidelines. Such guideline prescribed a limit of 45 tax audit assignments that can be under taken by a chartered accountant in a financial year under section 44AB of Income tax act, 1961.
In case of a firm, such specified number of tax audit limit shall be applicable for every partners of the firm.
Recently, ICAI has raised the limit of tax audit assignments from 45 to 60 to be made effective from audits conducted during financial year 2014-2015.
CAG report says “As per the information provided by DGIT (Systems) of ITD (August 2014), 65898 CAs submitted at least one TAX for AY 2013-2014. Out of total 65898 records of CAs, 81.13 per cent of CAs adhered to the limit prescribed by ICAI. Remaining 18.87 per cent of CAs (12435 CAs) submitted more than 45 TARs”
Here is a table as in CAG report which shows stratification of the total number of tax audit report (TARs) issued by CAs and its percentage;
|Range of Tax Audit Reports issued||Total Number of Accountants||Percentage of Total Accountants|
Another table showing top 22 chartered accountants who issued more than 45 TARs for AY 2013-2014
|Chartered Accountants||Membership Number||Number of TARs|
|Partha Pratim Mukhopadhyay||056366||990|
|Rajesh Kumar Gupta||074194||640|
|B C Vadivel||206700||612|
|Samir Pushpvadan Gandhi||039251||551|
|A Kulathooran Pillai||018792||510|
|Chetan Premchand Shah||031239||487|
|Suresh Kumar Goyal||084153||417|
|Hetal Bhailalbhai Dhamelia||119864||415|
|TS Ventakaraman Lakshmi||022214||414|
|Jai Bhagwan Mittal||084512||401|
Report further stated that “the information available with DGIT (system) 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 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”