Tax Audits Specialty of Chartered Accountants, Says ICAI President Nanda
Charanjot Singh Nanda, the newly appointed president of the Institute of Chartered Accountants of India (ICAI), emphasized on Wednesday the importance of keeping tax audits exclusive to chartered accountants, highlighting their specialized training for this role. His remarks came in response to recent proposals suggesting that other professionals be recognized as accountants under the new Income-Tax bill.
This shift, if implemented, would enable company secretaries and cost accountants to perform tax audits, a lucrative area currently reserved for chartered accountants (CAs).
“I value maintaining cordial relationships with other organizations, such as the Institute of Company Secretaries of India and the Institute of Cost Accountants of India. Nevertheless, tax audit expertise fundamentally belongs to chartered accountants,” Nanda stated during his inaugural press conference since assuming the presidency last week.
He pointed out, “While we study cost accountancy and compliance with the Companies Act as part of our curriculum, we do not assert expertise in those fields. Our primary training is in audits,” reinforcing the need for mutual respect for specialized roles.
Additionally, it is important to note that anyone who has passed the CA exams is permitted to conduct tax audits.
Anticipated Inputs on New Income-Tax Bill
Nanda revealed that a five-member committee established by the ICAI is diligently reviewing the new Income-Tax bill’s 536 sections. This committee will prepare a report for submission to the finance ministry and parliamentary select committee by March 10.
Focus on Work-Life Balance
In response to ongoing discussions about weekly work hours and differing views on work ethics, the ICAI plans to launch a committee dedicated to promoting work-life balance. This committee will collaborate with regional panels to raise awareness among members.
Relations with NFRA
Nanda expressed his intent to foster positive relationships with the National Financial Reporting Authority (NFRA), insisting that the perspectives of the ICAI should be respected. Tensions arose last year regarding NFRA’s efforts to align the country’s audit standards with international practices.
Strategic Priorities
Outlining the ICAI’s goals for the coming year, Nanda highlighted a drive to gain governmental backing for elevating Indian chartered accountants firms to an international level. The institute aims to strengthen its disciplinary framework to ensure prompt justice, endorse increased technological integration, enhance its global presence, focus on sustainability, and improve facilities for aspiring chartered accountants.
Disciplinary Actions
The ICAI has taken disciplinary measures against 241 chartered accountants for various professional misconducts during the 2024-25 period, with some cases related to tax audits concluded following Supreme Court rulings. Nanda noted that there were 119 penalties in the previous year and 91 the year before that, encompassing penalties and name removals (temporary and permanent, based on the severity of the misconduct).