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TMI BlogNEW INTERNAL AUDIT SYSTEMX X X X Extracts X X X X X X X X Extracts X X X X ..... l make equal distribution of the audit work in respect of cases assessed under the Corporate and non-Corporate Charges, Central Charges, DGIT (Int. Taxation) and DGlT (Exemption) to the two CsIT (Audit); ii. there shall be one CIT(Audit) in the non-metro charges under the direct administrative control & supervision of CCIT (CCA), who shall be responsible for audit work pertaining to all the cases in that jurisdiction; iii. the CCIT (CCA) would not delegate the administrative control & supervision over the CsIT (Audit) to any other CCIT; iv. the CsIT(Audit) would have their headquarters at the same station as that of the CCIT (CCA); v. under each CIT (Audit) there shall be one Addl. CIT, who would be responsible for Internal Audit of bigger cases as per the norms laid down herein below, and for the supervision of the audit work of the Special Audit Parties (SAPs) headed by Dy./Asst. CsIT and the Internal Audit Parties (lAPs) headed by the ITOs; vi. there shall be one SAP headed by Dy./Asst. CIT under each Addl. CIT (Audit), except at Guwahati, Lucknow, Nagpur and Kochi CCA charges where the APs will look after the functions of SAP; vii. there shall be one additional SAP headed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on- metros are given at Annexure-I and II. The Station-wise Special Audit Parties/ Audit Parties/Internal Audit Parties are shown below. Sl. No. Station At CCIT (CCA) Hqrs At field Total SAP IAP IAP SAP IAP 1. Delhi 2+2 2 20 2+2 22 2. Mumbai 2+2 2 34 2+2 36 3. Kolkata 2 2 24 2 26 4. Siliguri 1 1 5. Durgapur 1 1 6. Burdwan 1 1 7. Asansol 1 1 8. Jalpai 1 1 9. Chennai 2 2 12 2 14 10. Coimbatore 3 3 11. Salem 1 1 12. Madurai 2 2 13. Pondichery 1 1 14. Trichy 2 2 15. Hyderabad 1 1 7 1 8 16. Vishakapatnam 2 2 17. Vijaywada 1 1 18. Guntur 1 1 19. Rajamundry 1 1 20. Tirupati 1 1 21. Patna 1 1 3 1 4 22. Ranchi 1 1 23. Dhanbad 1 1 24. Muzaffarpur 1 1 25. Bhagalpur 1 1 26. Jamshedpur 1 1 27. Hazaribagh 1 1 28. Ahmedabad 1 1 9 1 10 29. Surat 3 3 30. Vadodra 4 4 31. Rajkot 3 3 32. Jamnagar 1 1 33. Valsad 1 1 34. Bangalore 1 1 6 1 7 35. Mysore 1 1 36. Hubali 1 1 37. Panaji 1 1 38. Belgaum 1 1 39. Gulbarga 1 1 40. Devangiri 1 1 41. Mangalore 1 1 42. Kochi 1 2 1 3 43. Trivendrum 1 1 44. Kh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it shall be ensured that at least top 100 cases of the charge are included in the basket. The remaining cases may be a representative mix of cases selected for scrutiny (a) under CASS, (b) based on AIR inputs, (c) by approval of CCIT, and (d) cases of delayed refunds including defaults in granting interest. ix. CCIT (CCA) may relax the norms for audit by Additional CIT, SAP and/or IAP so as to ensure that number of auditable cases is not less than the number of cases to be audited by each as per target laid down in sub-para (i) above. x. With regard to e-TDS Returns, after the returns are processed, the Internal Audit Party will check all actions taken by the assessing officers. This would include checking of Interest charged as well as penalty notices issued and penalty levied under various provisions of the IT Income Tax Act, 1961. IV. Role of Various Authorities 1. Role of CCIT (CCA): The CCIT (CCA) shall (i) review the performance of Internal Audit Wing, at least quarterly; (ii) be responsible and accountable for effective functioning and performance of the Internal Audit Wing under the CsIT(Audit); (iii) provide requisite infrastructure (adequate office space & fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CCA); (vii) ensure that the norms for Internal Audit are followed/implemented, and targets thereof, as well as the targets for Receipt Audit, are achieved; (viii) ensure that the internal audit of the auditable cases of a particular month are completed within 30 days, and the records/registers received with the list of auditable cases are handed over to the Addl. Jt. CIT Range/the Assessing Officers within one week thereafter; (ix) ensure that the audit objection memos are sent to the administrative CsIT, with copies to the Addl./Jt. CIT Range and the AOs, within a week of audit; (x) settle, with the administrative CIT concerned, the major internal audit objections having tax effect above Rs1,00,000/- in IT/CT and Rs.30,000/- in Other Taxes, and ensure that the Add!. CIT (Audit) settles the internal audit objections involving tax effect below these limits with the Addl./Jt. CIT Ranges concerned, within 4 months of sending audit memos to the CsIT; (xi) take measures to the effect that a uniform stand is taken by the officers in the Region on a issue/fact of law; and (xii) prepare and send the necessary reports and statistics to the Board/ Directorates and the AGs. 4. Role of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the decision of the CCIT shall be final. 5. Role of Additional CsIT (Audit): The Addl./ Jt. CsIT(Audit) shall, (i) have audit jurisdiction over cases pertaining to jurisdiction of CsIT assigned to him; (ii) have administrative control and supervision over the working of IAPs and SAPs functioning under him; (iii) ensure the effective functioning of the IAPs and SAPs; (iv) submit monthly report to CIT (Audit) with regard to the work done by the IAPs and SAPs; (v) assist the CIT (Audit) in maintenance of Ledger Cards and Registers with regard to Internal/Receipt Audit objections; (vi) coordinate with the concerned Addl. CIT/JCIT Range with regard to expeditious settlement of Internal Audit Objections involving tax effect below Rs.1,00,000 in IT/CT and Rs.30,000 in Other taxes, within prescribed time limit; (vii) ensure that the norms of Internal Audit are followed/implemented and that the targets of Internal Audit are achieved; and, (viii) assist the CIT (Audit) in ensuring proper maintenance of prescribed registers and timely submission of reports and statistics. 6. Role of Add.. CsIT/ JCsIT (Assessment Range): The Addl./Jt. CsIT (Assessment Range) shall, (i) ensure t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Internal Audit Functions of the Department, incorporating the highlights gathered through Inspections and Performance Audit, and submit the Annual Report to the Board by 30th June every year. V. Timely and appropriate action: With regard to remedial action on the internal audit objections, (i) in respect of audit objections involving revenue of Rs.1 ,00,000/- or more in Income Tax/Corporate Tax cases and Rs.30,000/- or more in other Direct Taxes cases, the Commissioners concerned shall be personally responsible for careful examination of such objections and issue of instructions to the A.Os on the appropriate remedial action to be taken within a month of the receipt of the internal audit objection memo; (ii) in respect of audit objections involving revenue below the limits prescribed in (a) above, the Commissioners should ensure that the Addl./Jt. Cs.I.T Ranges issue similar instructions to the AOs within the said period of one month; and, (iii) the choice of such remedial action, whether under section 154 or 147 or 263, should be carefully considered in the light of existing legal provisions and its sustainability in appeal. VI. Remedial action: (i) An Audit objection s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arithmetical inaccuracy in calculation or computation, the accountability of the dealing staff, besides that of the assessing officer, cannot be over-emphasized. Hence, if the mistake is, inter alia. on account of anyone or more of the following reasons, the explanation of the staff responsible for the mistake should invariably be obtained, (a) where an issue is considered/discussed in the body of assessment order, and necessary addition on the issue is directed to be made, or where a deduction is directed to be allowed by the assessing officer, but such directions are not taken into account at the time of calculation of tax, interest and surcharge; (b) where there is totaling mistake in the computation of income; (c) where an income disclosed in the return is not included in the computation in the assessment order, except where the assessing officer has discussed in the body of assessment order and directed not to include it; (d) where there is wrong calculation of tax including application of wrong rate of tax; (e) where there is wrong calculation of interest including application of wrong rate of interest or wrong calculation of period for which interest is leviable; (f) ..... 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