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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.... level in field formation. The perpetual problem of reconciliation of pendency 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 &#....
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....nt categories (sections A, B, C, D etc) Part-III Other Audit Observations - NMV (No Monetary Value) paras Part-IV List of cases 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, c....
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....issue(s) to the LAP. For the legal question raised as such or in a mixed issue, the Assessing officer may state that the reply would follow after due examination of the matter. 4.4 The Assessing officer shall send a status report to the PCIT as regards 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 ....
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.... of opinion and arrive at common view, as far as possible. Detailed 'Minutes of the Meeting' shall be recorded and sent to all concerned . However no remedial action shall be initiated in respect of objections not accepted by PCIT even after discussion in meeting. Unresolved cases: 5.11 Where a Revenue audit objection remains unresolved at 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....
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....A system. The statistical and other reports, as may be required, shall be generated from the ITBA system itself. However for monitoring and control following standard MIS reports are prescribed: (a) Statistical report, to ascertain progress, in respect of number of audit objections raised, settled, pending etc in the format given at Annexure-5. (b) List of pending audit objections with particulars as may be required out of those prescribed in 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 hi....
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....ior to this Instruction coming into force. 13. The ADG (Audit) 13.1 ADG (Audit) shall act as the coordinating agency for the various CsIT (Audit) to promote uniformity of view on same issue. 13.2 He shall monitor progress of settlement of objections both internal and revenue. 13.3 The ADG (Audit) shall try to reconcile the view of department and CAG in cases remaining unresolved at field level so that the number of draft paras may be minimized. 14. The above instructions would apply mutatis mutandis to the Revenue Audit's observations in cases covered in Performance Review 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 approva....
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....Improper carry forward of loss 6 74(1)- Improper carry forward of capital loss 7 74-Incorrect set off after 8 years 8 80-IB-Incorrect deduction-SSI after 31/3/02 9 80-Improper carry forward of loss in belated return 10 92C-Arithmetical mistake in determining adjustment 11 92C-lncorrect ALP-Incorrect operating expense of comparable 12 115JB-Incorrect working of net profit 13 184-Remuneration amount not given in deed 14 195(2)-Allowance of expense though TDS not deducted 15 234A(3)-Incorrect levy of interest 16 234A(3)-Non levy of interest u/s 234A(3) 17 234A-Short levy of interest 18 234B-lncorrect calculation of interest period 19 234B-Short levy of interest 20 234C-Short levy of interest 21 271(1)(b)-Non-levy of penalty u/s 271(1)(b) 22 271(l)(b)-Non-levy of penalty-No reasons given 23 271D- Non-levy of penalty u/s 271D 24 271D-Non-levy of penalty u/s 271D 25 271F- Non-levy of penalty u/s 271F 26 271F-Non-levy of penalty on return filed beyond AY 27 Others - to be filled in by officer concerned Annexure-2 SUMMARY OF UNRESOLVED OBJECTIO....
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....sp; 19 The circumstances in which the mistake occurred must be stated 20 Date of issue of notice and section for initiating remedial action. 21 Date of order passed as remedial action 22 Amount of additional demand raised ascribable to Audit objection 23 If remedial action is barred by limitation, reasons and circumstances thereof. [Name] Pr COMMISSIONER OF INCOME-TAX 24 Comments of CCIT concerned (Name) Chief Commissioner of Income-tax Annexure-4 PROFORMA-B 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 . . . . . . . . . PART 'B' (only in respect of objections that are accepted by PCIT) 1 Name of the assessee 2 PAN 3 Assessment year 4 Whether the additional demand has been recovered? If so, date of collection. 5 If not recovered, the reasons for non-recovery. 6 Has any....
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....Report for the : [PCCIT /CCIT/DGIT/PCIT/CIT(Audit)] drop down Status as on : [normally as on last day of the previous month / any specific date] PART-I - MAJOR REVENUE AUDIT OBJECTIONS No. of Objections pending as on 1.4.20..... Revenue effict Received during the month Received up to the end of month Settled during the month Settled up to the end of month Pending at the end of month (1+4-6) Revenue effect of objections in Col (7) Replies sent but pending Objections (not accepted) out of(4) Revenue effect in respect of column 9 Objections that are accepted out of (3) Revenue effect in respect of column 12 1 2 3 4 5 6 7 8 9 10 11 12 13 Break up for the authorities below should be available till basic unit i.e. AO, IAP etc. PART-II - MINOR REVENUE AUDIT OBJECTIONS No. of Objections pending as on 1.4.20........ Revenue effect Received during the month Received up to the end of month Settled during the month Settled up ....