Tax Audit must remain with Chartered Accountants, Says Select Committee Report
On Monday, the Select Committee presented its report on the Income Tax Bill 2025 in the Lok Sabha, suggesting 285 amendments to the past bill to make it shorter and simpler. To review the amended Income Tax Bill 2025, the Lok Sabha Speaker Om Birla appoints a Select Committee of the Lok Sabha, including a total of 31 members. The committee is headed by BJP leader Baijayant Panda. The Income Tax Bill 2025 was introduced in the lower house of the parliament, Lok Sabha, on February 13, 2025.
In the meeting one of the witnesses strongly urged that the definition of ‘accountant’ under Section 288 of the income tax Act should remain unchanged, stressing that the function of audit must remain the exclusive domain of Chartered Accountants (CAs). The witness says that they noticed several representations were being made by other professional bodies, including company secretaries, seeking to gain eligibility for conducting tax audits.
However, it was declared that such professionals lack the core tax expertise and audit proficiency required for this highly specialised function. The reference was made to Section 44AB of the existing Income Tax Act, which mandates that tax audits must be conducted by a Chartered Accountants having a Valid Certificate of Practice – Failing which, the right to conduct audits is compromised.
It was stated that the Legislature has made clear boundaries among the various professional institutes through distinct statutes.
The Chartered Accountants Act, 1949, allocated responsibility for tax and financial audits to CAs; the Cost and Works Accountants Act, 1959 governs cost audits; and the Company Secretaries Act, 1980 focuses on compliance, corporate law, and governance.
The submission clarified that there is no purpose on the part of CAs to invade upon the responsibilities of other professions, such as cost audits or corporate compliance, and similarly, other professionals should not look for entry into the domain of tax audits. Taking reference from legal and judicial precedents, including the Supreme Court judgement in T.D. Venkata Rao vs. Union of India, it was highlighted that CAs possess a specialised aptitude for audit due to the depth of training and qualification required. Along with this, international best practices were related to professionals with robust financial and accounting backgrounds, like Certified Public Accountants (CPAs) in the United States and Chartered Accountants in the United Kingdom.