ICAI raises concerns over accountant definition in DTC Bill

ICAI has contended that expanding the definition would result in individuals with "limited knowledge" issuing requisite certificates.

Raising serious concerns over the proposal to widen the definition of 'accountant' in the Direct Taxes Code, ICAI has told Finance Ministry that the proposed change could result in huge revenue leakages for exchequer.

ICAI, the apex grouping of chartered accountants, has contended that expanding the definition would result in individuals with "limited knowledge" issuing requisite certificates. Such a scenario would lead to huge revenue leakages, the body said during a recent meeting with senior Finance Ministry officials.

Representatives from the Institute of Chartered Accountants of India (ICAI) met Revenue Secretary Rajiv Takru last week and said that the proposed change is a cause of major concern to the entire profession, the institute said.

The draft Direct Taxes Code (DTC) Bill, 2013, has defined accountant as a chartered accountant within the meaning of the Chartered Accountants Act, 1949, and shall include a company secretary within the meaning of the Company Secretaries Act, 1980.

It would also include a cost accountant within the meaning of the Cost and Works Accountants Act, 1959, or any person having such qualifications as the Board may prescribe.

The current Income Tax Act defines accountant as a chartered accountant within the meaning of the Chartered Accountants Act, 1949.

ICAI told the Finance Ministry that "issuance of audit certificates by persons having limited knowledge of audit of accounts will not only be professionally incorrect and but will raise many concerns including causing huge revenue leakages".

The final view on the draft, which has been prepared by Finance Minister P Chidambaram, will be taken by the new government to be formed after the general elections are over in mid-May.

The DTC Bill, which aims to replace the existing I-T Act 1961 and overhaul the taxation system, has been pending since 2009 and has undergone various changes.