Selection of cases for audit u/s 142(2A). - Income Tax - 1415/CBDT

INSTRUCTION NO. 1415/CBDT Dated: September 23, 1981 Reference is invited to Boards letter F.No.246/66/76-A PAC.II dated the 12th July 1977 by which guidelines for selection of cases for audit u/s.142(2A) were given. Further reference is invited to boards letter no. 246/66/76-A PAC.II dated 23rd July 1977 by which criteria for preparation of panel of chartered accountants was laid down to enable the officers to refer expeditiously cases requiring audit u/s.142(2A). 2. The board had occasion to review the working of provisions of section 142(2A) and it was found that during the last three years only 16 cases were referred for compulsory audit under this section. Even in these 16 cases the maximum contribution was only from Nagpur charge referring 6 cases. The estimates committee took adverse note of the same in para 4.19 of their 9th report for the year 1980-81 and recommended as under:- The committee regret to note that a wholesome provision made for referring certain accounts for compulsory audit by auditors to be nominated by commissioners u/s.142(2A) of the I.T.Act w.e.f. 1-4-76 has not been utilised to the extent to which it should have been utilised. During the last 3 years only, 16 cases were referred for compulsory audit under this power. The committee recommend that all preparatory work to give effect to this provision should be completed without any further delay and the power of compulsory audit used in all cases where it is necessary to do so in the interest of revenue. 2. The board desire that you should impress upon your officers to refer more cases for compulsory audit requiring deeper investigation and it should not be difficult as now the preparatory work in this behalf already stands done. 4. Necessary instructions may be issued to all the officers working in your charge.