Para 2.3.3 — MSO (Audit)
Original Rule Text
2.3.3 The Audit Department should not in any way substitute itself for the revenue authorities in the performance of statutory duties. However, Audit should satisfy itself that the requirements of legality and regularity are observed in individual assessments and in general that the departmental machinery is sufficiently safeguarded against error and fraud and that so far as can be judged, the procedures are calculated to give effect to the requirements of law.
What This Means
Audit should never try to perform the job of the revenue authorities, such as making tax assessments themselves. However, audit must verify that individual assessments meet the requirements of legality and regularity. Audit must also satisfy itself that the overall departmental system has adequate safeguards against errors and fraud, and that the procedures are designed to properly enforce the requirements of the law.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Audit must not substitute itself for revenue authorities
- 2Individual assessments should be checked for legality and regularity
- 3Departmental systems must be evaluated for fraud and error safeguards
- 4Procedures should give effect to the requirements of law
- 5Audit maintains an oversight role, not an operational role
Practical Example
While auditing an Income Tax office, auditors do not reassess a taxpayer's income themselves. Instead, they check whether the assessing officer followed the proper procedure, applied the correct tax rates and exemptions as per law, and whether the department has adequate systems like random scrutiny, data analytics, and internal checks to catch errors and prevent fraud.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why can't audit reassess a taxpayer directly?▼
What is meant by 'calculated to give effect to the requirements of law'?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.