Dealing with IT officials.

This query is : Resolved

Guest

Guest (Querist)

30 September 2007 During my articleship, i discover a lot of clients who actually dont maintain any books of accounts. They just give bank statements & TDS certificates etc. By this we are supposed to do tax audit. We prepare approximate balance sheet and give a clean report with out disclosing any serious issues like not maintaining cash book, journal register etc. How would a practicing CA handle an IT official if he calls for scruiting assessment or any other special hearing ? Will he be liable under any act ?

R.V.RAO

R.V.RAO (Expert)
Follow

30 September 2007 YES WHAT YOU SAID IS TRUE TO THE EXPERIENCE OF ANY C.A OR AUTHORISED REPRESENTATIVE.
BUT THEN THE LAW CASTS AN OBLIGATION UNDER COMPANIES ACT AND IT ACT THAT THE AUDITOR CERTIFY THE NECESSARY REPORTS LIKE THE STATUTORY AUDIT REPORT AND TAX AUDIT REPORT.
BY SIGNING THE SAME HE ACCEPTS THE PROFESSIONAL RESPONSIBILITY.
AS FAR AS SCRUTINY ASSESSSMENTS ARE CONCERNED IT IS THE ASSESSING OFFICER WHO CALLS FOR THE DESIRED INFO. TO COMPLETE THE ASSESSMENT UNDER THE IT/ST ACT.
IT IS THE ASSESSEE WHO FURNISHES THE DESIRED INFO. EITHER IN PERSON OR THROUGH HIS OR THEIR AUTHORISED REPR.
THE AUTH. REPR. IS NOT BUT THE ASSESSEE IS RESPONSIBLE TO FURNISH ALL REQUIRED INFO. TO THE ASSESSING OFFICER.THE ASSESSEE TAKES THE RISKS OR COSEQUENCES FOR FURNISHING OR NONFURNISHING OF THE INFO. CALLED FOR BY THE ASSESSING OFFICER.
THERE IS NO LIBILITY FOR AUTHORISED REPR. UNDER THE RELEVANT ACT.
BUT THEN HIS ABILITY OF HANDLING THE AND COMPLETING THE ASSESSMENTS DIRECTLY AFFECTS HIDS STANDING WITH HIS CLIENT. THEREFORE THE AUTH. REPR. HANDLES THE SITUATION TO THE SATISFACTION OF BOTH HIS CLIENT AS WELL AS THE DEPT. BECAUSE HE IS PAID FOR THE SAME.CONTACTS AND P.R IS A PART OF THE JOB.THEN AS YOU KNOW EVERYTHIG HAS A PRICE IN THIS WORLD. THERE ARE NO FREE LUNCHES.
R.V.RAO

Ravi Shankar

Ravi Shankar (Expert)
Follow

30 September 2007 In practice, the Balance Sheet is prepared first (for filing the IT return) and then, when the case is picked up for scrutiny, the Books of a/c are prepared so as to match the financial statements prepared earlier. Nevertheless, all the errors that one might have committed in preparing the Balance Sheet might surface when the b/a are prepared.

As regards handling the I.T dept., a lot depends on the standing the CA/AR has in the profession and how easily the officer can be 'moulded'...

Upgrade to CAclubindia Pro. Subscribe Now!

Mallidi Ramabrahmananda Reddy

Mallidi Ramabrahmananda Reddy (Expert)
Follow

30 September 2007 The above two answers clearly explained the situation.Your are growing bud. Don't learn such unwated method of professional work. Kindly support the pride of sincere and honest chartered accountants by carrying the profession with professional ethics

sivasankar

sivasankar (Expert)
Follow

01 October 2007 Hi,
If you do not find the books of accounts in view,kindly give a qualified report that books are not maintained properly.
In fact we give qualified report to clients who bring us the books in last two weeks of October because on cannot audit the books in a very short time.