SPECIAL AUDIT

SPECIAL AUDIT

• Dealers requiring special audit in certain situations

If, at any stage of the proceeding under DGST Act, the Commissioner can ask for special audit in the following situations:-

• Where the nature and complexity of the business of a dealer is so complicated or,
• To safeguard the interest of the revenue.

Commissioner may direct the dealer by a notice in writing to get his records including books of accounts, examined and audited by an accountant or a panel of accountants or any other professional or panel of professionals nominated by the Commissioner in this behalf.

• Who is required to Audit the accounts?

Audit can be carried out by any of the following:

• a CA within the meaning of the Chartered Accountant’s Act, 1949;
• a person who by virtue of sec 226(2) of the Co. Act, 1956, is entitled to be appointed to act as an auditor of companies registered; or
• a cost accountant within the meaning of the Cost and Works Accountants Act, 1959;
• a person referred to in sec 619 of the Companies Act, 1956; or
• any other professional nominated by the Commissioner in this behalf.

Commissioner may also appoint panel of accountants or professionals.

• Special audit is over and above any other audit.

The provision of sec 58A(1) shall have effect notwithstanding that the accounts of the dealer have been audited under any other provision of DGST Act or any other law for the time being in force or otherwise.

• Delivery of Audit Report

The auditor shall deliver a report of such examination and audit in the format specified by Commissioner, duly signed and verified by such accountant or panel of accountants or professional or panel of professionals and setting forth such particulars as may be specified.  

• Time Period for submission of report to the Commissioner

Every audit report shall be furnished by the dealer to the Commissioner within such period as may be specified by the Commissioner.

Exception

However, the Commissioner may, on an application made in this behalf by the dealer and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit.

NOTE: The aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed 180 days from the date on which the direction for special audit is received by the dealer.

• Fees and Incidental Expenses to be borne by dealer himself

All expenses of the examination and audit of records (including the remuneration of the accountant or a panel of accountants or professional or panel of professionals) shall be paid by the dealer as determined by the Commissioner and that determination shall be final. Default in such payment shall be recoverable from the dealer as tax and in the manner provided for the recovery of arrears of tax under DGST Act.

Authors note: According to my own opinion this fee should be a charge on pocket of Department and not assessee. Special Audit is an audit for the department and not for the benefit of assessee. Besides in Sec 142 of IT Act, 1961 similar provision exists wherein fee is to be paid by Central Government.*

If assessee can file Writ petition in High Court against fixation of liability to pay auditor fee there are chances that is judicial pronouncement might be given in favor assessee i.e. the fee payable to auditors is responsibility of Delhi Sales Tax Department and not assessee.

• Miscellaneous

Panel of Accountants finalised by the department for the purpose of special audit u/s 58A of the DGST Act 2004. Panel was applicable to take up the cases which are assigned to them by the department upto 31.03.08.

Name of the firm Address

• M/s Anil Ashok & Associates 4117, 1stFloor, Naya Bazar, Delhi
• M/s Bhupinder Shah & Company C-12, Raj Nagar, C.H.B.S., Pitampura, Delhi- 110034
• M/s Dhanesh Gupta & Company 1-1/16, Ansari Road, Shanti Mohan House, Darya Ganj, New Delhi-110002
• M/s Goel Mintri & Associates JD-18B, Near Ashiana Chowk, Pitampura, Delhi-110034
• M/s K.C. Gupta & Company 5269, Shradhanand Marg, Delhi-110006
• M/s Khandelwal Jain & Co. 221, Hans Bhawan, Bahadur Shah Jafar Marg, Delhi
• M/s Kapoor Bhushan & Co. DP 55, Maurya Enclave, Pitampura, Delhi
• M/s Lunawat & Company 54, Daryaganj, New Delhi-110002
• M/s P.K. Singhal & Co. E-24, IIIrd Floor, Jawahar Park, Laxmi Nagar, Delhi-1100092
• M/s Ravi Ramesh & Associates D-131, 2ndFloor, Rajender Nagar, New Delhi- 110060
• M/s Rawla & Co. 504, Surya Kiran, 19, Kasturba Gandhi Marg, New Delhi
• M/s Rajesh Gupta & Associates A-1, Palika Place Annexe, Panchkulan Road, New Delhi
• M/s SPG Associates 105/4855-56, Harbans Street, 24, Ansari Road, Darya Ganj, New Delhi
• M/s Vijay Mukesh & Company D-4, Naveen Shahdara, Delhi-110032

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