5th
June, 2018
To
Mr.
Sushil Chandra
The
Chairman,
Central
Board of Direct Taxes,
Ministry
of Finance,
Government
of India,
North
Block,
New Delhi
110 001.
Dear Sir,
Sub: Notification No. 23/2018 dated 24th
May, 2018 amending Rule 11UA of the Income-tax Rules, 1962
We are voluntary bodies of Chartered
Accountants with membership from across India with a combined membership of
more than 14,000 CAs. We would like to place before you a representation on
behalf of our members in connection with the recent notification issued by the
CBDT amending Rule 11UA of the Income-tax Rules, 1962.
As per the said amendment, the term
“Accountant” has been omitted from clause (c) of sub rule (2) of Rule 11UA.
Thereby, effectively, valuation of unlisted shares and securities can now be
done only by registered merchant bankers.
This amendment is not in the interest of the
tax payers of the country. It is a known fact that the number of registered
merchant bankers (for the purpose of Rule 11UA) is very small. Tax payers have
generally been approaching Chartered Accountants for this purpose. The
Institute of Chartered Accountants of India (ICAI) has taken several
initiatives in the recent past to encourage its members to learn and attain
expertise in the field of valuation. Valuation Standards have been prescribed
by the ICAI to help Chartered Accountants in discharging their duty as valuers.
Apart from this, even under the Companies
Act, 2013, Chartered Accountants have been recognised as being eligible for
registration as valuers as laid down in section 247 of the said Act.
Further, in the various regulations issued
under the Foreign Exchange Management Act, 1999 also, valuation (including
valuation as per DCF method) by Chartered Accountants has been recognised for
long.
The Wealth-tax Rules too recognise Chartered
Accountants as being eligible for providing valuation reports.
In light of the above, it is indeed shocking
for us to note the sudden amendment in Rule 11UA derecognising Chartered
Accountants as valuers. No reasons are forthcoming for this amendment.
Therefore, on behalf of the tax paying
community of India, and on behalf of the tax professionals who assist the tax
payers in honestly complying with the tax laws of the country, we strongly urge
you to withdraw the amendment to Rule 11UA of the Income-tax Rules, 1962 and to
reinstate the position as it existed prior to the amendment.
Assuring you and the Government of India our
fullest support in the massive nation building exercise that is in progress,
We remain,
Yours sincerely
Sd/-
Narayan Pasari Chintan
Doshi
President President
Bombay
Chartered Accountants’ Society Ahmedabad Chartered
Accountants’ Association
Sd/-
Sd/-
Raghavendra
T.N. Gyanesh Verma
President
President
Karnataka
State Chartered Accountants’ Lucknow
Chartered Accountants’
Association
Society
