Special audit

Section 66(1)

If at any stage of scrutiny, inquiry, investigation or any other proceed- ings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examined and audited by a chartered accountant or a cost accountant as may be nominated by the Commissioner.

AI Explanation

If an officer, considering the case's nature and complexity, thinks there's an issue with the declared value or credit, they can direct the registered person to undergo a special audit. This direction needs approval from the Commissioner, and it involves examining the records, including books of account, by a chartered accountant or cost accountant nominated by the Commissioner.

Section 66(2)

The chartered accountant or cost accountant so nominated shall, within the period of ninety days, submit a report of such audit duly signed and certified by him to the said Assistant Commissioner mentioning therein such other particulars as may be specified:

Provided that the Assistant Commissioner may, on an application made to him in this behalf by the registered person or the chartered accountant or cost accountant or for any material and sufficient reason, extend the said period by a further period of ninety days.

AI Explanation

The nominated chartered accountant or cost accountant must submit an audit report within ninety days. The report should be signed and certified by the auditor and include specific details. However, if needed, the Assistant Commissioner can extend this period for another ninety days, based on a valid application or sufficient reasons.

Section 66(3)

The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the registered person have been audited under any other provisions of this Act or any other law for the time being in force.

AI Explanation

Even if the registered person's accounts have been audited under other provisions of the law, the special audit provisions apply.

Section 66(4)

The registered person shall be given an opportunity of being heard in respect of any material gathered on the basis of special audit under sub-section (1) which is proposed to be used in any proceedings against him under this Act or the rules made thereunder.

AI Explanation

The registered person has the right to be heard concerning any material gathered during the special audit. This material may be used in proceedings under the Act or its rules.

Section 66(5)

The expenses of the examination and audit of records under sub-section (1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and such determination shall be final.

AI Explanation

The Commissioner determines and pays the expenses related to the special audit, including the remuneration of the chartered accountant or cost accountant. This determination is final.

Section 66(6)

Where the special audit conducted under sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under section 73 or section 74.

AI Explanation

If the special audit reveals unpaid taxes, errors in refunds, or misuse of input tax credit, the proper officer can take action under section 73 or section 74 of the Act.