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(1) Any officer under this Act, authorised by the proper officer not below the rank of Joint Commissioner, shall have access to any place of business of a registered person to inspect books of account, documents, computers, computer programs, computer software whether installed in a computer or otherwise and such other things as he may require and which may be available at such place, for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue.
(2) Every person in charge of place referred to in sub-section (1) shall, on demand, make available to the officer authorised under sub-section (1) or the audit party deputed by the proper officer or a cost accountant or chartered accountant nominated under section 66-
(i) such records as prepared or maintained by the registered person and declared to the proper officer in such manner as may be prescribed;
(ii) trial balance or its equivalent;
(iii) statements of annual financial accounts, duly audited, wherever required;
(iv) cost audit report, if any, under section 148 of the Companies Act, 2013;
(v) the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961; and
(vi) any other relevant record,
for the scrutiny by the officer or audit party or the chartered accountant or cost accountant within a period not exceeding fifteen working days from the day when such demand is made, or such further period as may be allowed by the said officer or the audit party or the chartered accountant or cost accountant.71.1. Introduction
This provision empowers any officer authorised by the officer not below the rank of Joint Commissioner to have access to any place of business of a registered person to inspect books of account, documents, computers, computer programmes, computer software and such other things as may be required and which may be available at such place, for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue.
71.2. Analysis
For this purpose, the officer should be authorized by the officer not below the rank of Joint Commissioner.
Such an authorized officer shall have access to any place of business of registered person to inspect books of account, documents, computers, computer programs, computer software (whether installed in a computer or otherwise) and such other things as he may require as available at such premises.
The object is to carry out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue.
The person in charge of the premises should make available the following :
1. Records maintained by the registered person and declared to proper officer;
2. Trial balance;
3. Audited financial statements wherever required;
4. Cost audit report, if any;
5. Income Tax audit report, if any;
6. Other relevant records.
The documents/records should be made available within 15 working days or such extended period as may be allowed.
The documents/records can be called for by the Audit officer or Chartered Accountant or Cost Accountant nominated by the department.
71.3. Comparative review
In the current indirect tax laws, and even in various State VAT laws similar provisions exist.
71.4. Related provisions
Section Description Remarks
Section 65 Audit by tax authorities For such purpose access to business premises is permitted under section 71
Section 66 Special Audit -do-
71.5. FAQs
Q1. What are the documents or records that a person in charge of a place of business shall make available in terms of Provisions of section 71?
Ans. The person in charge of a place of business shall, on demand, make available:
• Records maintained by the registered person and declared to proper officer;
• Trial balance;
• Audited financial statements wherever required;
• Cost audit report, if any;
• Income Tax audit report, if any
• Other relevant records
Q2. Who are the persons empowered to call for documents/records for audit, verification, checks and scrutiny?
Ans. Audit Party deputed by the Proper Officer or a Chartered Accountant or a Cost Accountant nominated u/s 66 by the department for conducting the audit are the persons empowered to call for documents/records for audit, verification, checks and scrutiny.
71.6. MCQs
Q1. The documents called for should be Provided within _______________
(a) 20 working days
(b) 15 working days
(c) 60 days
(d) 30 days
Ans. (b) 15 working days
Q2. Who is liable to furnish information to empowered officers?
(a) Director
(b) Accountant
(c) CEO
(d) Person in charge of Place of Business
Ans. (d) Person in charge of Place of Business
Q3. What empowered officers can do with the information furnished to them?
(a) Audit
(b) Scrutiny
(c) Verification and Checks
(d) All of the above Ans. (d) All of the Above
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