The Central Board of Direct Taxes (CBDT) vide notification no. G.S.R. 697(E) issued on 27th September 2023 has notified the new amendments the Income Tax Rules, 1962 in pursuant to the Special Audit under Section 142(2A) of the Income Tax Act, 1961. These rules may be called the Income-tax (Twenty Second Amendment) Rules, 2023.
In exercise of the powers conferred by sub-section (2A) of section 142 read with section 295 of the Income-tax Act, the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
In the Income-tax Rules, 1962, for rule 14A, the following rule shall be substituted namely:––
“14A. Forms for report of audit or inventory valuation under section 142(2A).––
(1) The report of audit of the accounts of an assessee which is required to be furnished under clause (i) of sub-section (2A) of section 142 shall be in Form No. 6B.
(2) The report of inventory valuation of an assessee which is required to be furnished under clause (ii) of sub-section (2A) of section 142 shall be in Form No. 6D.”.
In the principal rules, for rule 14B, the following rule shall be substituted namely:––
“14B. Guidelines for the purposes of determining expenses for audit or inventory valuation. ––
(1) Every Chief Commissioner shall for the purposes of clause (i) and clause (ii) of sub-section (2A) of section 142 shall maintain a panel of ––
(i) accountants, out of the persons referred to in the Explanation to sub-section (2) of section 288; and
(ii) cost accountants, out of the persons referred to in the Explanation to section 142.
(2) Where the Assessing Officer directs ––
(i) for audit under clause (i) of sub-section (2A) of section 142 on or after the 1st day of June, 2007; or
(ii) for inventory valuation under clause (ii) of sub-section (2A) of section 142 on or after the 1st day of April, 2023,
the expenses of, and incidental to, audit or inventory valuation (including the remuneration of the Accountant or Cost Accountant, qualified Assistants, semi-qualified and other Assistants who may be engaged by such Accountant or Cost Accountant) shall not be less than three thousand seven hundred and fifty rupees and not more than seven thousand and five hundred rupees for every hour of the period as specified by the Assessing Officer under subsection (2C) of section 142.
(3) The period referred to in sub-rule (2) shall be specified in terms of the number of hours required for completing the report.
(4) The Accountant or Cost Accountant referred to in clause (i) or clause (ii) of sub-section (2A) of section 142 shall maintain a time-sheet and shall submit it to the Chief Commissioner or Commissioner, along with the bill.
(5) The Chief Commissioner or the Commissioner shall ensure that the number of hours claimed for billing purposes is commensurate with the size and quality of the report submitted by the Accountant or Cost Accountant.”.
In the principal rules, in Appendix II,––
(a) in Form No. 6B:––
(i) for the heading of the Form, the following shall be substituted, namely:––
“Audit report under clause (i) of section 142(2A) of the Income-tax Act, 1961”;
(ii) in the Notes, for serial number 2 and entries relating thereto, the following serial number and entries shall be substituted, namely – “2. This report has to be given by the accountant nominated by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income-tax under clause (i) of section 142(2A) of the Income-tax Act, 1961.”
Following the report, annexures containing the Inventory Valuation Report prepared by the Cost Accountant have also been included in the form also with Details of Financial Results (as per the Audited Accounts of the Assessee), Details of inventory valuation for the relevant period under reporting by the Cost Accountant (wherever ICDS II is applicable), and Details of inventory valuation for the relevant period under reporting by the Cost Accountant (wherever ICDS II is not applicable).
The notification came into force on the same date of its publication i.e., 27th September 2023.
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