Gulam Rabbani :
The Appellate Division of the Supreme Court has ruled that the provisions of concerned law provide that the Comptroller and Auditor-General of Bangladesh has jurisdiction of auditing tax receipts and refunds. It also observed that wherever income and expenditure of public money is involved, the Comptroller and Auditor-General of Bangladesh (CAG) has power and authority to conduct audit to ascertain the propriety, legality and validity of it.
A three-member bench of the Appellate Division headed by Chief Justice Hasan Foez Siddique passed the observation in a verdict delivered after hearing a civil petition filed by the Finance Ministry against a High Court order.
The apex court delivered the verdict on January 2022, while the full verdict was released recently on the Supreme Court website.
Referring to the case of ‘NBR vs. Singer Bangladesh and others’, the apex court also said, “the audit department has power to inspect the accounts of the Revenue Department since the Auditor General has been invested with such power under article 128 of the constitution.”
“The Audit Department has been invested with the authority to inspect the accounts of Revenue Department. The Comptroller and Auditor-General is
authorized to direct any of his officers to conduct audit of tax receipts or refunds under section 163 (3)(g) of the Income Tax Ordinance.”
Following a writ petition filed by Radiant Pharmaceuticals Ltd. Represented by its Managing Director, Masrur Ahmed, a High Court bench on March 10 in 2016 said in a judgment that the CAG has got no jurisdiction to check the merit or demerit of subjective opinions of the assessing officers with regard to allowing or disallowing a particular claim of the concerned assessee.
If the auditor is allowed to do so, the entire purpose for incorporating the provisions under
Section 120 and/or 121A of the Ordinance will be frustrated, also, opined the HC.
Finance Ministry appealed against this HC verdict and after hearing the apex court said that this view of the High Court Division is erroneous inasmuch as if the audit report does not have any bearing in the subjective opinion of the assessing officer, the very purpose of auditing pursuant to article 128 of the constitution is to be frustrated.
If no action can be taken against any irregularities detected through auditing of accounts, auditing itself becomes unnecessary, the apex court also opined.
In the instant case, concerned DCT has allowed financial expenses of an amount of Tk 57.54 million as demanded by the assessee which was not supported by annual report etc. and the audit report has detected this irregularity.
If this irregularity as detected by the audit report does not trigger any proceeding under section 120 of the Income Tax Ordinance, 1984, the power conferred to the CAG under section 163(3)(g) of the same Ordinance becomes fruitless, also read the apex court ruling.
After completion of the assessment by the DCT, the concerned Local Office of the Controller and Accountant General conducted an audit on the concerned files of the Radiant Pharmaceuticals lying with the tax department, and, in the said audit, some irregularities in respect of assessment of the petitioner’s income were detected.
Accordingly, the audit team submitted report to the concerned Commissioner of Taxes saying that, on the basis of such report of the local office of the CAG, the concerned Inspecting Additional Commissioner issued a notice on March 8 in 2015 asking the petitioner to remain present in a hearing on March 24 in 2015 along with the concerned papers and documents.
Pursuant to such notice, the petitioner sought an adjournment on the summoning on March 24 in 2015, and, thereafter, by another letter dated March 31 in 2015 he sought the copy of the said audit report. However, the petitioner did not get any positive response.
Being aggrieved by such actions of the audit authorities, the writ-petitioner filed a writ petition with the High Court Division.
