Audit session in Bengaluru stresses transparency, fairness in tax compliance

BENGALURU: The Bangalore Chamber of Industry and Commerce (BCIC), in association with the Central Tax (Bengaluru Zone) and the Audit-1 Commissionerate, held an explanatory session on Wednesday on the tax audit procedure. Chief Commissioner of Central Tax (Bengaluru Zone) Kajal Singh stressed the importance of audits as a means to support a constructive relationship between the taxpayer and the [tax] department. Titled Selection of Cases for Audits and Use of Technology for Audit-Readiness, the session sought to clarify public doubts regarding the process. According to Singh, the core principles of audits lie in transparency between the department and the taxpayer, consistency in operations from both parties, and education, rather than penalisation, of businesses regarding compliance. Audits should not be a source of fear and conflict. I know nobody likes to pay their taxes, but we should not see it as a burden. The officers in charge must operate fairly; we do not support unnecessary harassment. It is an opportunity to strengthen the system without being punitive, she said. Additional Commissioner at Audit Commissionerate-1, Shanti Sudha, was also part of the session and spoke on the backend logistics of the process. It is not about enforcement; we want every taxpayer to know how it works, she said. Speaking about the selection process itself, Sudha mentioned that 70 per cent of the selection pool is based on risk scores calculated on the basis of 34 (undisclosed) risk parameters assessed by the Directorate General of Analytics and Risk Management (DGARM), 20 per cent is locally chosen by the Audit Commissionerate, and 10 per cent is randomly selected. Despite the emphasis on transparency by both Sudha and Singh, a taxpayer selected for audit will not be able to ascertain which of the three aforementioned processes led to their selection.