Splitting up of rebate claims to avoid pre-audit- CBEC Instructions
INSTANCES have been brought to the notice of the Board where the assesses have submitted rebate claims by splitting up the amounts of rebate claims so as to keep each individual claim below Rs. 5 lakhs to avoid pre-audit.
And the wise Board directs:
Rebate sanctioning authorities may note that they may order pre-audit by clubbing such claims where such claims are artificially split and there is need for pre-audit. Such exercise of powers shall be discretionary and used more as an exception than rule .
Why would an assessee split up a refund claim? The pre audit is an internal (illegal) matter of the Department and many assessees are not even aware of the existence of pre-audit. It came into prominence only in recent times when the pre-audit section also started demanding money for sanction of refunds.
Sanctioning a refund is an adjudication function of the Assistant Commissioner and no audit can interfere in that work as is being done now in patent violations of all tenets of law and procedure. When an Assistant Commissioner decides to grant a refund can another Assistant Commissioner(Audit) tell him not to grant it?
It is unfortunate that the Board is continuing with this illegal illogical procedure. But now with Assistant Commissioners all around, at least to provide them with some work, they have to continue with pre audit or even make it more complicated.
CBEC Letter in F. No. 206/05/2014-CX.6, Dated: November 3, 2014