Caro

Statutory Audit 1097 views 2 replies

krishna iyer

Sr.Finance Manager

197 Points Posted on 10 April 2014

Dear Sirs,

I require valuable advice on the following:

In the CARO report, we have to disclose disputed tax not deposited with statutory agencies and the forum where the dispute is lying.

In excise and service tax there is a system of issuing show cause notices by adjudicating authorities (Commissioner, deputy commissioner, assistant commissioner etc , depending on the size of tax involved), which are contested by the clients. This is only the first step in the dept to demand duties, but there are appellate forums where we can contest lower level orders .

whether show cause notices are to be disclosed under CARO . Any institute guideline on this

regards

Replies (2)

Milind M. Kulkarni

Practicing CA

597 Points Posted on 14 April 2014

In my view, Show Cause Notice is not the demand for tax. It is an opportunity given to the tax payer to explain why the amount of tax stated in the notice should not be collected from the tax payer. The tax payer is supposed to reply to the notice and not file any appeal against it. Further, you reply to the same authority who issued the Show Cause Notice and not to any higher authority. Therefore according to me, it is not a disputed tax liability.

Disputed tax liability would be the one which is actually demanded by tax authorities and is not in the show cause stage and against which, an appeal lies with any of the appeallete authorities.

If anyone has different views, I would be happy to consider the same.