Abolish Section 271J for imposing Penalty of Rs 10,000/- on Chartered Accountants
The proposed Section 271J prescribing imposition of penalty of Rs. 10000/-, on Chartered Accountants or a merchant banker or a registered valuer on allegation of furnishing incorrect information or incorrect report or certificate should be strongly protested. It would give powers to Assessing Officers to threaten CAs even for no fault on their part.
read more....
read more....
Our Institute has strong mechanism and like disciplinary Committee to impose and punish guilty CA’s who do not perform proper due diligence before providing any information or certificate.
We request all Chartered Accountants, Merchant Banker and Registered Valuer to sign the petition so that it can be represented to Finance Minister
There are few CA’s who have welcomed the section and questioned why the same required to be removed. Following are the reasons it can be used as a tool by Assessing Officer for harassment
- Most of the CA’s who deal with Assessing Officer of Income Tax Department has experience Assessing Officer raising wrong demand and interpret section wrongly, mostly in case of honest tax payers. It is possible that they will misuse this section against CA’s frequently
- ·Auditors are watchdogs not bloodhounds - An auditor is not bound to be detective and to work with their suspicion, that there is something wrong. Practically speaking in case of Tax Audits it is not possible to check 100% of all transaction and in many cases CA’s are entitled to rely upon their representation given by the assessee. What if the representation is wrong? Will Assessing Officer charge the Penalty on CA in case of false representation by assessee for Tax Audits?
- Many CA’s feel that penalty to be increased to Rs 1 Lakh, however we feel the question is not about quantum of penalty it is about reputation and wastage of time as we all feel it may be misused.
- ·Imagine in case of scrutiny, there is an addition of demand, what if the AO takes stand that auditor has provided with incorrect information and so charge penalty? If we can-co related this with one more example, what if such penal provision is for lawyers? So in every case that he losses the court will charge the penalty for providing false information? It sounds hilarious!!
- ·Lastly we already have one regulator ICAI who has various committees which regulates CA in case he is found guilty of providing incorrect information in any report or certificate. So we do not want double regulation by empowering AO to penalize CA
Do share in all the network and lets get maximum signature so that we can convince the government to scrap the section 271 J
Update 08 Feb 2017
CBDT: Incorrect IT returns filed will also attract 10K fine on CA’s
“Under Section 271J, we have entrusted responsibility with CA, who file audit report, valuation and other things.....so if they file any incorrect information in the return they are also liable for token penalty of Rs. 10,000/-.” CBDT Chairman Sushil Chandra.
It means not only in case of Audit report or other report but also for every Income Tax Return filed Chartered Accountant will be equally liable for false information provided by their client.
How we as a Chartered Accountant will verify all data given by client to file the returns? For example, hypothetically if there are 1000 clients for which you are filing returns, and it is found that 500 have provided false information or incorrect information, knowingly or unknowingly then in such case also CA will have to pay fine of Rs 10,000/- in each case. So total fine will be 50 Lakhs in above example. The fine amount will be much more than amount we charge to file the returns.
If CBDT chairman interprets the section 271J and imposes penalty on all wrong filings, imagine what AO can start interpreting and misusing the section.
We request all CA’s to share the petition and spread the word so that the section cannot be miss used against CA’s
Thanking you