TaxTMI 
TaxTMI 
Supersession of Instruction No.9 of 2006, Dated 7-11-2006; Instruction No.16 of 2013, Dated 31-10-2013 and Circular No. 8/2016, Dated 17-3-2016
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....endency will be resolved with launching of a web-based portal by the office of the C&AG "osparas.ap.nic.in" where CIT-wise / AO wise pendency have been hosted. The portal has the facility for uploading of reply by the CIT concerned. In due course of time, the interface of ITBA would also be linked with C&AG's new portal for complete work flow automation. 1.3 With the technological assistance of ITBA and CAG portal in place, Standard Operating Procedure (SOP) have been aligned to workflow in ITBA, with defined roles and responsibilities of each functionary in the hierarchy. The timelines for each step to be executed by officer concerned has been laid down hereunder. 1.4 In supersession of all existing instructions on this subject in general and instruction No 9 of 2006, Instruction No 16 of 2013 and Circular No 8/2016 in particular, this instruction is issued for strict compliance by all concerned. 2. Audit Procedure followed by CAG office 2.1 The field offices of CAG (Comptroller and Auditor General of India) carry out normal audit of assessments which is referred to as 'compliance audit'. Further, audit of non-assessment areas including, inter alia, e....
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.... not produced to audit Part-V Disclaimer Certificate 2.4 The objections are settled after considering the replies sent by the PCIT. The C&AG prepares an Audit Report in respect of Direct Tax which contains illustrative cases to support their conclusion regarding loss of Revenue due to mistake in making assessments. These illustrative cases are taken from Local Audit Reports based on quantum of loss of revenue, even if objections are not accepted by the department. 2.5 As a first step towards conversion of audit objection to "Draft Para", the Director (ITRA) sends particulars of objections to the PCIT through a 'Statement of Fact' (SOF). The SOF to make Draft Para can be proposed even in cases where objection has been settled after completion of remedial action. After incorporating the response, if any, from the PCIT to the SOF, illustrations selected for inclusion in the Audit Report are sent to the Board for comment. On receipt of Draft Paras from the office of the C&AG, the A&J division of the Board, calls for report from the PCIT in Proforma A & B to prepare its response to the Audit Report. 2.6 The Audit Report of CAG for each financial year is present....
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....mistakes involving legal question / mixed issue so that a view may be prepared for response on receipt of LAR. 5. Local Audit Report (LAR) stage 5.1 The Local Audit Report (LAR) is sent by the Group Officer concerned, dealing with audit of Direct taxes in the office of Director General of Audit or Principal Director of Audit (Central) [referred to as 'concerned CAG officer' in this Instruction] to the Assessing officer with a copy to PCIT and CIT(Audit). Until the time the process of receiving LAR on system begins, the Assessing officer shall enter all the objections in the LAR in 'Revenue Audit' Module of ITBA in the columns given at Annexure-1 to this instruction. 5.2 The PCIT shall, after calling for the report from AO and Range head, if needed, take a decision as to, whether or not, the objection is acceptable. Action when objection is acceptable 5.3 Where the Revenue Audit objection is accepted, the PCIT shall decide if the relevant order under audit requires revision u/s 263 as remedial action. If yes, he shall call for the relevant records and proceed to initiate action u/s 263. 5.4 In other cases, the PCIT shall communicate his decision not to in....
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.... field level, the PCIT shall enter in ITBA system, the outcome of meeting referred to in 5.9 above, as per minutes recorded. In such cases the ADG (Audit) shall be able to generate a summary of objection containing all information as in proforma at Annexure-2 of this Instruction in order to take up the matter in the headquarter office of C&AG. 5.12 The ADG(Audit), acting on behalf of CBDT, shall hold meeting with the Principal Director of Audit (Direct Taxes) in the Hq office of C&AG to discuss the objections remaining unresolved at field level. For this purpose, the ADG(Audit) may constitute a team of officers as deemed appropriate, including CIT(A&J), CBDT and officers from Directorate of L&R, so that the latest judicial position on a legal issue may be brought to the notice of officers of CAG during discussion. Minutes of the meeting may be recorded and sent to all concerned. However no remedial action shall be initiated if the objection raised by CAG is not found acceptable in the meeting. 6. Draft Para stage 6.1 Where Statement of Facts (SOF) proposing to include an objection as draft para in audit report is received, the PCIT shall examine the issue (irrespective of whe....
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....Annexure-6. For Audit Set-up 9.2 The CIT(Audit) shall be able to generate MIS report in Annexure-4 for his jurisdiction or for each PCIT charge. The PCCIT shall be able to generate similar MIS report for his jurisdiction or CIT(Audit) wise, or CCIT wise or PCIT wise as may be required. The ADG(Audit) shall be able to generate similar MIS report for all or any of the PCCIT or CCIT or PCIT or any CIT(Audit) in India. For CCIT or PCIT 9.3 The PCIT shall be able to generate, as and when required, MIS report in Annexure-4 for his charge with break-up for each Range or AO in his charge. The PCIT shall also be able to generate list of all pending audit objections in Annexure-5 for his charge or any Range or any AO in his charge. 9.4 The ADG(Audit) may, with the approval of Member(A&J), specify any other periodic MIS that is required to be generated through ITBA. 9.5 Until such time as Audit Module in ITBA becomes functional, the reports as per existing guidelines shall continue to be sent. 10. Monitoring by CCIT 10.1 PCCIT shall review the progress of settlement of revenue objections in the CCIT Regions under his administrative control on quarterly basis and take necessary....
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....ew so far as taking of remedial action, accountability measures and necessary action against the officer / staff responsible for the mistake is concerned. 15. When the Audit Module of ITBA becomes functional, entire work flow of audit, including all correspondence, shall be through ITBA system. The correspondence with C&AG official, if received in physical form, shall be entered in the system by the authority concerned. 16. These instructions may be brought to the knowledge of all concerned for strict compliance. This issues with the approval of the Board. Abbreviations used in this Instruction PDGIT Principal Director General of Income-tax PCCIT Principal Chief Commissioner of Income-tax DGIT Director General of Income-tax CCIT Chief Commissioner of Income-tax PCIT Principal Commissioner of Income-tax and includes Commissioner of Income-tax ADG Additional Director General of Income-tax Concerned CAG officer Concerned Group Officer dealing with audit of Direct Taxes in the offices of Director General of Audit/ Principal Director of Audit (Central) Range head Additional or Joint Commissioner of income-tax heading the Range AO Assessing Officer Annexure-1 ....
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....oncerned Annexure-2 SUMMARY OF UNRESOLVED OBJECTIONS FOR DISCUSSION BY ADG(AUDIT) WITH HQ OF THE C&AG S. No. Particulars 1 PCCIT and CCIT Region 2 PCIT/CIT charge 3 Assessment unit having jurisdiction 4 Name of the Assessee 5 Assessment Year 6 Reference No. of LAR 7 Loss of Revenue reported 8 Audit objection as in LAR 9 Reply of the PCIT 10 Rejoinder, if any, received from ITRA 11 Outcome of meeting of at field level (refer para 5.11) Annexure-3 PROFORMA-A PROFORMA REPORT ON THE DRAFT AUDIT PARA No. . . . . . . . . . . . . . .PROPOSED TO BE INCLUDED IN THE AUDIT REPORT BY THE C&AG FOR THE YEAR . . . . . . . . . . . . . . . Board's reference calling for the report . . . . . . . . . . . . . . .Dated . . . . . . . . . . . . . . . Date of receipt of draft audit para from board : Date of uploading the report in Proforma-A : PART A 1 Name of the assessee 2 PAN 3 PCIT's Charge 4 Assessment year 5 Date of filing of return, if any 6 Total Income as per return (where applicable) 7 Tax and interest payable on returned income/Net wealth 8 Date of assessment/other order subject of audit 9 Section under which order under audit was m....
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....s history of the officer's/staff's other mistakes and consequential action against the officer/staff (enclose copy of ledger card) 15 Does the case require looking into from the vigilance angle? If so, State what action is being taken? 16 If remedial action got barred by limitation, whether responsibility has been fixed and what action has been taken against the officer and/or staff responsible for (i) making mistake (ii) letting the remedial action barred. 17 Name(s) of all AO, Range Head, PCIT holding charge chronologically from the time LAR was received till Remedial Action Taken and or action Time Barred 18 If there has been delay in sending reply, or if reply has not been sent, after receipt of LAR, reasons thereof and action taken against the officer/staff concerned. 19 Whether the case was earlier checked by Internal Audit? 20 If seen by internal audit and mistake not detected, whether explanation of audit unit concerned, called for? 21 PCIT's comments thereon. 22 General remedial measure taken to avoid recurrence of such mistakes in future 23 Whether the case was reviewed for similar mistakes in earlier and later years? 24 Is there any impl....