Instruction no- 02/2024
Dated- 17/09/2024
Sub-GSTN issued Instruction regarding Standard Operating Procedure (SOP) for handling Internal Audit Objections.
The internal audit mechanism has been established to preven t errors, ensure timely remedy and for enhancing the quality of assessmen ts. The evolving landscape of operations and responsibilities in the Department, especially in the faceless environment, has necessitated that the internal audit procedures be u pdated to ensure its efficiency while enhancing accountability and promoting compliance to tax laws. Accordingly, in supersession of all existing instructions on internal audit in general a nd Instruction No.6/2017 dated 21-07-2017 in particular, the instructions as follows are issued.
1.2 These instructions come into effect immediately and will be applicable to pending internal a udit objections also.
1.3 In these instructions, the term:
(i) 'Act' refers to the Income Tax Act, 1961.
(ii) 'Auditee Officer' refers to the officer who passed the order under audit or his successor-in-office, except for orders passed in a faceless manner, where it refers to the J u risdictional Assessing Officer ('J AO').
(iii) 'Auditor' refers to Addl. CIT/ J t. CIT (Audit), DCIT / ACIT (Audit), ITO (Audit) or any other officer au thorised by the PCCIT or the PCIT I CIT (Audit).
2.0 AUDIT SET UP
2 .1 Internal Audit set-up is u nder the direct supervision and control of the PCClT. It comprises PCIT /CIT (Audit), Addl. CIT/ Jt. CIT (Audit), DCIT / ACIT (Audit), ITO (Audit) or any other officer authorized by th e PCCIT or the PCIT /CIT (Audit).
2.2 For charges such as International Taxation, Transfer Pricing, Cen tral Charges and the Exemption Wing, the responsibility for Interna l Audit will lie with the PCIT /CIT (Audit) reporting to the PCCIT in whose territorial jurisdiction the Auditee Office is located.
3.0 OBJECTIVES AND SCOPE OF INTERNAL AUDIT
3.1 The audit scope extends to all matters that should have been correctly carried out in accordance with applicable legal provisions, instructions, circulars, prescribed procedures and guidelines. It aims to identify errors or omissions and raise an 'objection' through Audit Memo. The scope includes verifying arithmetical accuracy, adherence to judicial pronouncements/ precedents a nd other relevant issues. The objection should be well-founded with cogent justification.
3.2 The practice of raising an 'Audit Observation' is discontinued. Any significant issue noticed, other than audit objection, should be communicated by th e auditor to the jurisdictional PCIT / CIT through the PCIT / CIT (Audit).
4 .0 TARGET OF AUDITORS
The target of auditors shall be to mandatorily complete the audit of all cases allocated during a fmancial year by the end of that financial year. The target for rechecking by the PCIT/CIT (Audit) and Addl. CITjJt. CIT (Audit) shall be as mentioned in para 5.1.
5 .0 RE-CHECKING
5 .1 After completion of the audit, the PCIT/ CIT and Addl. CIT/Jt. CIT (Audit) shall recheck some of the cases of all auditors in which no objection was raised.
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