The Central Board of Direct Taxes (CBDT) has notified Income Tax (22nd Amendment) Rules, 2023 to substitute Rules 14A and 14B of the Income Tax Rules, 1962. The revised rules prescribe the forms and guidelines for conducting audit and inventory valuation under section 142(2A) of the Income Tax Act, 1961.
Key Highlights
Forms Prescribed for Audit and Inventory Valuation Reports
i) Revised Form 6B prescribed for audit report under section 142(2A)(i)
ii) New Form 6D prescribed for inventory valuation report under section 142(2A)(ii)
Guidelines for Determining Audit/Valuation Fees
i) Chief Commissioner to maintain panel of accountants and cost accountants
ii) Expenses to be between Rs 3,750 – Rs 7,500 per hour as specified by Assessing Officer
iii) Accountant/Cost Accountant to maintain timesheet and submit with bill
iv) Chief Commissioner to ensure hours claimed are commensurate with report quality
Changes in Existing Form 6B
i) Heading changed to “Audit report under clause (i) of section 142(2A) of the Income Tax Act, 1961”
ii) Notes updated to refer to accountant nominated under section 142(2A)(i)
Applicability and Effective Date
i) Rules to come into force from 27/09/2023 (date of official gazette publication)
ii) To apply for audits directed on or after 01.06.2007 under section 142(2A)(i)
iii) To apply for valuations directed on or after 01.04.2023 under section 142(2A)(ii)
The new rules and forms notified by CBDT aim to streamline the process of special audit and inventory valuation under section 142(2A). The provisions relating to remuneration and timesheet will bring more clarity and transparency. Overall, the changes will help improve tax administration and compliance.
CBDT Income Tax Notification 82/2023 dated 27/09/2023: IT Rules Amended for Audit and Inventory Valuation u/s 142(2A) of Income Tax Act