Internal auditor cannot be appointed as Tax auditor

ICAI vide announcement dated 12 December 2008 has clarified that the internal auditor, whether working with the organisation or independently practising as a Chartered Accountant or a firm of Chartered Accountants, cannot be appointed as the tax auditor of an assessee for the purposes of tax audit under section 44AB of Income Tax Act, 1961.

Here is the relevant text of the ICAI announcement:-

"The Council in its 281st meeting held from 3rd October, 2008 to 5th October 2008 at New Delhi considered an issue arising from the Guidance Note on Tax audit under section 44AB of the Income-tax Act,1961 as to "Whether the internal auditor of an assessee, being an individual chartered accountant or a firm of chartered accountants can be appointed as his tax auditor".

The Council decided that an internal auditor of an assessee, whether working with the organisation or independently practising chartered accountant or a firm of chartered accountants, cannot be appointed as his tax auditor "