It has been further clarified by the Central Council on the earlier decision
taken by the Council regarding; *an internal auditor of an assessee, could
not be appointed as his tax auditor........* These directions will not be
applicable in case of, internal auditors whose appointment have been made as
tax auditors before December 12, 2008 and they can carry out the tax audit
of the financial year ending on March 31, 2009, i.e., Assessment Year
2009-2010.
Internal Auditor cannot be tax auditor – Further Clarification
*Details are hoisted on **www.icai.org*
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The Council in its 281st meeting held from 3rd to 5th October, 2008 decided
that an internal auditor of an assessee, whether working with the
organization or an independently practicing Chartered Accountant being an
individual chartered accountants or a firm of chartered accountants, could
not be appointed as his tax auditor.
The said decision came into effect from December 12, 2008. As per the
decision an internal auditor cannot carryout tax audit on or after December
12, 2008. Subsequently representations have been received pointing out the
hardship being caused by the above said decision in respect of those
internal auditors who have been appointed as tax auditors for the financial
2008-09 on or before December 12, 2008. The Council considering this
hardship has decided that the decision taken by the Council at its meeting
between 3rd to 5th October, 2008 shall be applicable to all appointments as
tax auditor made on or after December 12, 2008 and accordingly those
internal auditors whose appointment have been made as tax auditors before
December 12, 2008, can carry out the tax audit of the financial year ending
on March 31, 2009, i.e., Assessment Year 2009-2010 only.