Modification of the term "Accountant" as appearing in the Explanation below sub-section (2) of section 288 of the Income Tax Act, 1961 to include the "Cost Accountant" therein
The Institute of Cost Accountants of India (ICAI) is a statutory body set up under an Act of Parliament in the year 1959. The Institute as a part of its obligation regulates the profession of Cost and Management Accountancy for the last 75 years. The Institute, as a part of its obligation towards the society and the country at large, has been associated and taken part in all the major tax reforms in the country starting from Direct Tax to Indirect Tax regime including VAT/Central excise/Service Tax ending with the biggest tax reform in India in the way of implementation of GST. The Institute pursues the vision of cost competitiveness, cost management, efficient use of resources and structured approach to cost accounting as the key drivers of the profession. The Institute operates through four regional councils at Kolkata, Delhi, Mumbai and Chennai and 98 Chapters situated at important cities in the country as well as 9 Overseas Centre. It is under the administrative control of Ministry of Corporate Affairs, Government of India.
The Institute and its members have been contributing constructively in the field of accountancy and Taxation besides cost & management accounting at par with its peer Institutions. The members of the Institute are professionally qualified and experts to handle the critical issues relating to Accounting and taxation in and outside the Country. With members of the Institute both in practice and employed in industry, the Institute has been one of the major pillars of the accounting and taxation system of country. In this context, we request you to kindly note and peruse that there is an urgent need to amend meaning of the term “accountant” as assigned in the Explanation below section 288 of the Income Tax Act, 1961 so as to bring both Cost Accountants and Chartered Accountants at par under its ambit.
Section 288 of the Income Tax Act describes the persons entitled to appear before any Income Tax Authority or the Appellate Tribunal, as an "authorized representative" of the assessee, in connection with any proceedings under the Act [otherwise than when the assessee is required to attend personally for examination on oath or affirmation]. Subsection (2) gives list of such persons. Clause
(iv) thereof includes 'an accountant' and clause
(v) says 'any person who has passed any accountancy examination recognized in this behalf by the Board'.
As per explanation below sub-section (2), "accountant" means a Chartered Accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) who holds a valid certificate of practice under sub-section (1) of section 6 of that Act, and includes, in relation to any company, any person who is eligible for appointment as an auditor of the said company in accordance with the provisions of subsection (3) of section 141 of the Companies Act, 2013 (18 of 2013).
Suggested Draft Modification in Explanation below Section 288 (2) (iv):
[Explanation. - In this section, "accountant" means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 who holds a valid certificate of practice under sub-section (1) of section 6 of that Act, or a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) who holds a valid certificate of practice under sub-section (1) of section 6 of that Act, but does not include [except for the purposes of representing the assessee under sub-section (1)] -
(a) in case of an assessee, being a company, the person who is not eligible for appointment as an auditor of the said company in accordance with the provisions of sub-section (3) of section 141 of the Companies Act, 2013 [18 of 2013]; or who is not eligible for
appointment as auditor of the said company in accordance with the provisions of sub-section (3) of section 148 of that Act;
Note: While modifying meaning of the term 'accountant', for inclusion of cost accountant at par with chartered accountant, simultaneously sub-rule (3) of Rule 50 of the Income Tax Rules, 1962 would need to be deleted wherein cost accountancy examination is recognized for the purpose of Clause (v) of sub-section (2) of section 288.
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