The Union Budget 2023 has inserted a new provision mandating valuation of inventory by a Cost Accountant for the proceedings relating to section 68 of the Income Tax Act, 1961.
Clause 68 of the Bill seeks to amend section 142 of the Income-tax Act relating to inquirybefore assessment.
Sub-section (2A) of the said section provides that if, at any stage of the proceedings before him the Assessing Officer, having regard to the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of the accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the assessee, and in the interests of revenue, is of the opinion that it is necessary, he may with the previous approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, direct the assessee to get his accounts audited by an accountant, and to furnish report as per rules.
It is proposed to amend the said sub-section (2A) so as to enable the Assessing Officerto get the inventory of the assessee also valued by a cost accountant.
It is also proposed to insert an Explanation in the said section to define “cost accountant”to mean a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Costand Works Accountants Act, 1959 and who holds a valid certificate of practice under subsection(1) of section 6 of the said Act.
These amendments will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.
Subscribe Taxscan Premium to view the Judgment
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
