Para 2.3.4 — MSO (Audit)
Original Rule Text
2.3.4 It is not the duty of Audit to review a judicial decision nor does Audit normally review the judgment exercised by officers in individual cases in areas purely falling in their discretion. But it must be recognized that an examination of such cases is important for judging the effectiveness of assessment procedures, recovery procedures, etc. Where the information available on an individual case is insufficient to enable Audit to ascertain how the requirements of the law have been complied with, Audit may consider it is its duty to ask for any further information to enable it to form the judgment required of it as to the effectiveness of the system.
What This Means
Audit does not normally review judicial decisions or question the discretionary judgment exercised by revenue officers in individual cases. However, examining such cases is important for evaluating whether assessment and recovery procedures are working effectively overall. If the information in a case file is insufficient for audit to determine how the law was complied with, audit can request additional information to form its judgment about the system's effectiveness.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Audit does not review judicial decisions
- 2Discretionary judgments in individual cases are normally not questioned
- 3Examination of individual cases helps evaluate overall system effectiveness
- 4Audit can request additional information when case files are insufficient
- 5Focus is on the effectiveness of assessment and recovery procedures
Practical Example
An Income Tax officer used discretion to settle a tax dispute with a company for Rs 8 crore instead of the assessed Rs 12 crore. Audit does not question this judgment call, but when reviewing multiple such settlements, audit notices a pattern of consistently large reductions. Audit requests detailed case files to assess whether the settlement procedures are functioning effectively or are being misused.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why does audit examine individual discretionary cases if it doesn't question them?▼
What if the department refuses to provide additional information?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.