Special audit by Chartered Accountant/Cost Accountant:
Section 72A provides for the special audit by a practicing Chartered Accountant/Cost Accountant.
(1) Circumstances under which PCCE/CCE may order Special audit: If the PCCE/CCE, has reasons to believe that any person liable to pay service tax (herein referred to as “such person”),—
(i) has failed to declare or determine the value of a taxable service correctly; or
(ii) has availed and utilised credit of duty or tax paid—
(a) which is not within the normal limits having regard to the nature of taxable service provided, the extent of capital goods used or the type of inputs or input services used, or any other relevant factors as he may deem appropriate; or
(b) by means of fraud, collusion, or any wilful misstatement or suppression of facts; or
(iii) has operations spread out in multiple locations and it is not possible or practicable to obtain a true and complete picture of his accounts from the registered premises failing under the jurisdiction of the said Commissioner,
he may direct such person to get his accounts audited by a Chartered Accountant or Cost Accountant nominated by him, to the extent and for the period as may be specified by the Commissioner.
(2) Submission of duly signed and certified report to the PCCE/CCE within the specified period: The said Chartered Accountant or Cost Accountant shall, within the period specified by the said PCCE/CCE, submit a report duly signed and certified by him to the said PCCE/CCE mentioning therein such other particulars as may be specified by him.
(3) Opportunity of being heard: The person liable to pay tax shall be given an opportunity of being heard in respect of any material gathered on the basis of the special audit and proposed to be utilised in any proceeding under the provisions of this Chapter or rules made thereunder.
(4) In case accounts are already audited under any other law: The provisions of subsection (1) shall apply even if the accounts of such person have been audited under any other law for the time being in force.
(i) Chartered Accountant means a person who is a member of the Institute of Chartered Accountants of India.
(ii) Cost Accountant a person who is a member of the Institute of Cost and Works Accountants of India.