The Hindu Business Line : Unprepared preparer

Will the TRP, by signing the return, court trouble and stick his neck out? In all fairness, he should not be made the fall guy for the shenanigans of his client. The proposed regime of Tax Return Preparer bristles with a number of doubts.

Where is the TRP?

The proposed Section 139B of the Income-tax Act, 1961 neither seems to have a parallel nor any serious provocation. Yes, the Department has been facing a lot of problems stemming from incomplete and inaccurate returns blithely, if not wantonly, filed.

Lack of knowledge of the nuances of accounts and income-tax law are at the root of such returns though, at times, sheer indifference (could not care less attitude) and vexation were also contributory factors. But will the Tax Return Preparer (TRP) improve things? The proposed regime bristles with a number of doubts.

Will resort to the services of TRPs be mandatory? For, if it were not going to be compulsory, the very purpose, un-stated of course, of bringing them on scene — to ensure completeness and accuracy of returns — would be defeated.

But the Explanatory Memorandum to the proposal seems to suggest that the regime would be optional.

Much the same is conveyed by the opening part of Section 139B, which says that the new regime would be without prejudice to the existing regime for returns enshrined in Section 139. In the event, it would have takers only if responsibility for inaccuracies and incompleteness can be conveniently deflected to the TRP.

It remains to be seen whether the comprehensive CBDT notification — contemplated by the proposed new section to provide for the nitty-gritty of the TRP regime — which would follow hot on the heels of the Presidential assent to the Finance Bill facilitates such deflection. In this regard, the proposed Section 139B(2) is a tad wishy-washy when it conceives a TRP essentially as an assistant but hastens to require his signature on the return.

Will the TRP, by signing the return, court trouble and stick his neck out? An auditor saves his skin by prefacing his audit report with the rhetorical words "based on the books produced and explanations offered to him."

The TRP too in all fairness should not be made the fall guy for the shenanigans of his client. After all, he cannot be expected to grill his client police-like. Nor is he likely to be cast in the role of a roving fishing enquiry officer.

What if he in the course of his assignment stumbles upon something revealing to the taxman but disconcerting to his client? Will he be expected to spill the beans or play ball with his benefactor? Will he be the agent of the department or his client? These and other details must be spelt out.

That chartered accountants and advocates have been denied the opportunity of acting as a TRP is a trifle perplexing. What is wrong if a person needing the services of a TRP plumps for a CA or an advocate?

Barring these two professionals seems to be born of the puerile desire to give gainful employment to lesser wannabe tax experts. But otherwise the list is all right and there is no reason why the tribe of authorised representatives should not be also allowed to act as TRPs subject of course to the code of conduct the proposed new section talks of.

(The author is a Delhi-based chartered accountant.)

S. Murlidharan