INCOME TAX

NEW INTERNAL AUDIT SYSTEM

INSTRUCTION NO. 3/2007

DATED 16-4-2007

As a result of the mounting backlog of the auditable cases, the Chain Audit System for Internal Audit introduced in F.Y 2001-02 has come in for considerable criticism from the Public Accounts Committee and the C & AG of India, and the Central Vigilance Commission. With a view to have an effective and objective set up of Internal Audit wherein the assessment functions and audit functions are assigned to separate specialized wings, the Board have decided to abolish the Chain Audit System, as well as the Quality Audit System introduced in 2005, and substitute it with a new Internal Audit System. Accordingly, the following instruction is issued in supersession of all existing instructions on the subject.

II. Structure of the Internal Audit Wing: The organizational structure of the Internal Audit Wing shall be as under:

i. there shall be two CsIT (Audit) each in Mumbai, Delhi, Chennai & Kolkata under the direct administrative control & supervision of CCIT (CCA). They will be designated as CIT(Audit)-1 and CIT (Audit)-ll. The CClT (CCA) shall make equal distribution of the audit work in respect of cases assessed under the Corporate and non-Corporate Charges, Central Charges, DGIT (Int. Taxation) and DGlT (Exemption) to the two CsIT (Audit);

ii. there shall be one CIT(Audit) in the non-metro charges under the direct administrative control & supervision of CCIT (CCA), who shall be responsible for audit work pertaining to all the cases in that jurisdiction;

iii. the CCIT (CCA) would not delegate the administrative control & supervision over the CsIT (Audit) to any other CCIT;

iv. the CsIT(Audit) would have their headquarters at the same station as that of the CCIT (CCA);

v. under each CIT (Audit) there shall be one Addl. CIT, who would be responsible for Internal Audit of bigger cases as per the norms laid down herein below, and for the supervision of the audit work of the Special Audit Parties (SAPs) headed by Dy./Asst. CsIT and the Internal Audit Parties (lAPs) headed by the ITOs;

vi. there shall be one SAP headed by Dy./Asst. CIT under each Addl. CIT (Audit), except at Guwahati, Lucknow, Nagpur and Kochi CCA charges where the APs will look after the functions of SAP;

vii. there shall be one additional SAP headed by Dy./Asst. CIT under each Addl. CIT (Audit) at Delhi and Mumbai;

viii. for each administrative CIT, there shall be one IAP headed by an ITO stationed at the headquarter of that CIT as per station wise list below. All IAPs thus constituted in CCIT (CCA) charge shall function under the administrative control of CIT (Audit);

ix. there shall be one ITO (Hqrs) assisted by one ITI and two Sr. TAs/TAs under each CIT (Audit) to take care of the Administrative matters and to co-ordinate and monitor the functioning of the SAPs and the APs. The CsIT (Audit) shall not delegate the administrative functions, including the HOO/DDO functions to the Addl. CIT (Audit);

x.   there shall be one ITO (Receipt Audit), with one ITI and two Sr. TAs/TAs, directly under each CIT

xi. there shall be one ITO (IAP) each for International Taxation (including, Transfer Pricing) and Exemptions at stations where the Directorates of International Taxation, Transfer Pricing & Exemption are situated;

xii. there shall be one ITO, with two ITIs and two Sr. TAs/TAs, under each Add!. CIT (Audit);

xiii. there shall be two ITIs and one Sr. TA/TA in each SAP;

xiv. there shall be two ITIs and one Sr.TA/TA under each IAP;

xv. the deployment of officers and staff for each such IAP as in (viii) and (xiv) above shall be made from the existing strength of concerned CIT. If more than one TRO is posted in a CIT charge presently, one TRO along with supporting staff may be surrendered to be deployed for the IAP.

xvi. the CCIT (CCA), in consultation with the CCIT (Central) and/or other CCsIT/DGsIT concerned and the CIT (Audit), may deploy additional IAPs at the headquarter of CCIT(CCA) for the audit of cases assessed under the Central or International Taxation or Exemptions Charges depending upon the workload and norms/targets of audit.

The distribution of newly sanctioned ITOs, ITIs and Sr. TAs/ TAs at the headquarters of CIT (Audit) shall be as under:

SI. No. 

Designation

ITOs

ITIs

PA/Steno

Sr.TAs/TAs

1.

CIT (Audit)

2

2

1

4

2.

Addl. CIT  (Audit)

1

2

1

2

3.

DY./Asst CIT (SAP)

Nil

2

1

1

4.

ITO (IAP) 

1

2

-

1

This will deploy evenly the newly sanctioned posts of 22 CsIT (Audit), 22 Additional CsIT (Audit), 22 Dy/ ACIT (SAP), 88 ITOs, 176 ITIs, 66 PAs/Stenographers, 176 Sr TAs/ T As for the Internal Audit Wing. The hierarchy chart of Internal Audit set-up for metros and non- metros are given at Annexure-I and II.

The Station-wise Special Audit Parties/ Audit Parties/Internal Audit Parties are shown below.

Sl. No.

Station

At CCIT (CCA) Hqrs

At field

Total

 

 

SAP

IAP

IAP

SAP

IAP

1.

Delhi

2+2

2

20

2+2

22

2.

Mumbai

2+2

2

34

2+2

36

3.

Kolkata

2

2

24

2

26

4.

Siliguri

 

 

1

 

1

5.

Durgapur

 

 

1

 

1

6.

Burdwan

 

 

1

 

1

7.

Asansol

 

 

1

 

1

8.

Jalpai

 

 

1

 

1

9.

Chennai

2

2

12

2

14

10.

Coimbatore

 

 

3

 

3

11.

Salem

 

 

1

 

1

12.

Madurai

 

 

2

 

2

13.

Pondichery

 

 

1

 

1

14.

Trichy

 

 

2

 

2

15.

Hyderabad

1

1

7

1

8

16.

Vishakapatnam

 

 

2

 

2

17.

Vijaywada

 

 

1

 

1

18.

Guntur

 

 

1

 

1

19.

Rajamundry

 

 

1

 

1

20.

Tirupati

 

 

1

 

1

21.

Patna

1

1

3

1

4

22.

Ranchi

 

 

1

 

1

23.

Dhanbad

 

 

1

 

1

24.

Muzaffarpur

 

 

1

 

1

25.

Bhagalpur

 

 

1

 

1

26.

Jamshedpur

 

 

1

 

1

27.

Hazaribagh

 

 

1

 

1

28.

Ahmedabad

1

1

9

1

10

29.

Surat

 

 

3

 

3

30.

Vadodra

 

 

4

 

4

31.

Rajkot

 

 

3

 

3

32.

Jamnagar

 

 

1

 

1

33.

Valsad

 

 

1

 

1

34.

Bangalore

1

1

6

1

7

35.

Mysore

 

 

1

 

1

36.

Hubali

 

 

1

 

1

37.

Panaji

 

 

1

 

1

38.

Belgaum

 

 

1

 

1

39.

Gulbarga

 

 

1

 

1

40.

Devangiri

 

 

1

 

1

41.

Mangalore

 

 

1

 

1

42.

Kochi

 

1

2

1

3

43.

Trivendrum

 

 

1

 

1

44.

Khozikode

 

 

1

 

1

45.

Kottayam

 

 

1

 

1

46.

Trichur

 

 

1

 

1

47.

Kannuar

 

 

1

 

1

48.

Bhopal

1

1

1

1

2

49.

Raipur

 

 

1

 

1

50.

Bilaspur

 

 

1

 

1

51.

Jabalpur

 

 

2

 

2

52.

Ujjain

 

 

1

 

1

53.

Indore

 

 

2

 

2

54.

Gwalior

 

 

1

 

1

55.

Pune

1

1

6

1

7

56.

Thane

 

 

4

 

4

57.

Nasik

 

 

2

 

2

58.

Aurangabad

 

 

1

 

1

59.

Kolhapur

 

 

2

 

2

60.

Nagpur

 

1

5

1

6

61.

Guwahati

 

1

2

1

3

62.

Shillong

 

 

1

 

1

63.

Dibrugharh

 

 

1

 

1

64.

Jorahat

 

 

1

 

1

65.

Chandigarh

1

1

2

1

3

66.

Patiala

 

 

1

 

1

67.

Shimla

 

 

1

 

1

68.

Panchkula

 

 

1

 

1

69.

Bhatinda

 

 

1

 

1

70.

Amritsar

 

 

2

 

2

71.

Jalandhar

 

 

2

 

2

72.

Jammu

 

 

1

 

1

73.

Karnal

 

 

1

 

I

74.

Hissar

 

 

1

 

1

75.

Rohtak

 

 

1

 

1

76.

Faridabad

 

 

1

 

1

77.

Ludhiana

 

 

1

 

1

78.

Bhubanesbwar

1

1

1

1

2

79.

Cuttack

 

 

1

 

1

80.

Sambalpur

 

 

1

 

1

81.

Jaipur

1

1

4

1

5

82.

Kota

 

 

1

 

1

83.

Alwar

 

 

1

 

1

84.

Jodhpur

 

 

2

 

2

85.

Bikaner

 

 

1

 

1

86.

Udaipur

 

 

1

 

1

87.

Ajmer

 

 

1

 

1

88.

Lucknow

 

1

2

1

3

89.

Bareilly

 

 

1

 

1

90.

Moradabad

 

 

1

 

1

91.

Varanasi

 

 

1

 

1

92.

Gorakhpur

 

 

1

 

1

93.

Allahabad

 

 

1

 

1

94.

Faizabad

 

 

1

 

1

95.

Haldwani

 

 

1

 

1

96.

Kanpur

1

1

3

1

4

97.

Aligarh

 

 

1

 

1

98.

Dehradum

 

 

1

 

1

99.

Muzaffarnagar

 

 

1

 

1

100.

Meerut

 

 

1

 

1

101.

Ghaziabad

 

 

1

 

1

102.

Agra

 

 

2

 

2

 

Total

22

22

250

22

272

III. Internal Audit - Auditable Cases: Norms and Targets

i. The minimum number of cases to be audited by each Additional CIT, SAP or IAP in a year shall be as under:

Additional CIT :   50

SAP       :   300

IAP        :   600 (Corporate Cases); & 700 (Non- Corporate Cases)

ii. The work load of auditable cases for internal audit shall be the number of cases selected by CCIT during the year keeping in view above norms and depending upon the manpower. The CCIT (CCA) and CsIT(Audit) shall draw an Action Plan for the year accordingly.

iii. The norms of auditable cases for Internal Audit shall be as laid down hereunder:

iv. The audit of returns processed summarily on AST may not be required.

v. In respect of search and seizure cases, audit of the core search assessments shall be made.

vi.   In respect of the audit of non-core search and seizure cases, the criteria for non-search assessments shall apply.

vii. For the purpose of audit of search & seizure assessments, the Appraisal reports shall be shown to SAP or IAP if so requisitioned.

viii. While preparing the basket of auditable cases for SAP or IAP, it shall be ensured that at least top 100 cases of the charge are included in the basket. The remaining cases may be a representative mix of cases selected for scrutiny

(a)   under CASS,

(b)   based on AIR inputs,

(c)   by approval of CCIT, and

(d)   cases of delayed refunds including defaults in granting interest.

ix.   CCIT (CCA) may relax the norms for audit by Additional CIT, SAP and/or IAP so as to ensure that number of auditable cases is not less than the number of cases to be audited by each as per target laid down in sub-para (i) above.

x.   With regard to e-TDS Returns, after the returns are processed, the Internal Audit Party will check all actions taken by the assessing officers. This would include checking of Interest charged as well as penalty notices issued and penalty levied under various provisions of the IT Income Tax Act, 1961.

IV. Role of Various Authorities

1. Role of CCIT (CCA): The CCIT (CCA) shall

(i)   review the performance of Internal Audit Wing, at least quarterly;

(ii)   be responsible and accountable for effective functioning and performance of the Internal Audit Wing under the CsIT(Audit);

(iii)   provide requisite infrastructure (adequate office space & furniture I fittings, PCs, telephone & fax, etc ) for Internal Audit Wing;

(iv)   ensure postings of competent officers & staff under the CsIT(Audit). The normal stay in Audit Wing shall be two years;

(v)   ensure, in co-ordination with the NADT/RTIs and MSTUs, that appropriate training is imparted to the officers and staff posted in the Internal Audit Wing, every year after the AGT;

(vi)   ensure that CDs and Journals on Case Laws, Circulars, Notifications and Instructions, and the Commentaries on Tax Laws, are provided to the Add\. Jt. CsIT Ranges and the Assessing Officers, as also the CsIT (Audit), and are regularly updated;

(vii)   ensure that the norms for Internal Audit are followed I implemented, and targets thereof, as well as the targets for Receipt Audit, are achieved;

(viii)   ensure that the necessary reports and statistics are sent to the Board I Directorates and the AGs;

2. Role of jurisdictional CCIT/ DGIT:

In case there is a difference of opinion between concerned CIT(Admn.) and CIT(Audit), the CCIT/ DGIT having administrative control over the CIT/DIT in whose charge an audit objection has been raised shall be the authority to decide whether an audit objection raised by an IAP is to be accepted or not.

3. Role of CslT (Audit): The CsIT (Audit) shall

(i) have jurisdiction for Internal Audit in respect of cases assessed under CsIT assigned to him;

(ii) have administrative control over Additional CsIT(Audit), SAPs and IAPs;

(iii)   be responsible and accountable for effective functioning and performance of the Internal Audit Wing and, for this purpose, shall regularly review the work of IAPs and SAPs;

(iv)   co-ordinate with the administrative CCsIT/DGsIT and CsIT/DsIT for preparation of the lists of auditable cases, timely production of records/registers to the Internal/Receipt Audit teams within the scheduled time frame, smooth conduct of audit and settlement of Internal, as well as Receipt Audit, objections, and action to be taken against officers 1 staff in respect of Internal Audit;

(v)   maintain the Ledger Cards and the Registers in respect of Internal/Receipt Audit as per guidelines given in the Internal Audit Manual, 2003, as amended from time to time, and ensure that these are maintained by the administrative CsIT;

(vi)   draw action plan for Internal Audit for the year in consultation with CCITI DGIT concerned with the approval of the CCIT(CCA);

(vii)   ensure that the norms for Internal Audit are followed/implemented, and targets thereof, as well as the targets for Receipt Audit, are achieved;

(viii)   ensure that the internal audit of the auditable cases of a particular month are completed within 30 days, and the records/registers received with the list of auditable cases are handed over to the Addl. Jt. CIT Range/the Assessing Officers within one week thereafter;

(ix)   ensure that the audit objection memos are sent to the administrative CsIT, with copies to the Addl./Jt. CIT Range and the AOs, within a week of audit;

(x)   settle, with the administrative CIT concerned, the major internal audit objections having tax effect above Rs1,00,000/- in IT/CT and Rs.30,000/- in Other Taxes, and ensure that the Add!. CIT (Audit) settles the internal audit objections involving tax effect below these limits with the Addl./Jt. CIT Ranges concerned, within 4 months of sending audit memos to the CsIT;

(xi)   take measures to the effect that a uniform stand is taken by the officers in the Region on a issue/fact of law; and

(xii)   prepare and send the necessary reports and statistics to the Board/ Directorates and the AGs.

4. Role of administrative CsITl DsIT: The administrative CsITl DslT shall:

(i)   extend all cooperation to the CIT(Audit) for preparation of the list of auditable cases, production of records/registers to the Internal Audit within the scheduled time frame, conduct of audit by the Internal Audit and settlement of Internal, as well as Receipt Audit, objections, and action to be taken against the officers/staff in respect of internal audit;

(ii)   ensure maintenance of the Ledger Cards and the Registers, manual as well as in electronic media, as per guidelines given in the Internal Audit Manual, 2003, as amended from time to time;

(iii)   prepare and send the necessary reports and statistics to the CIT (Audit);

(iv)   ensure that the list of auditable cases (category wise) of a particular month are sent to the CIT(Audit) concerned by the 10th of the following month;

(v)   ensure that the relevant records/registers are produced before the Internal Audit alongwith the list of auditable cases, and wherever records etc are not given to Internal Audit without adequate reasons, take suitable action against the officer/staff concerned under intimation to the CIT(Audit);

(vi)   ensure that the internal audit objections are examined in accordance with parameters laid down in paras V and VI below, and that remedial action in accepted cases are initiated accordingly within a month of the receipt of the internal audit memos;

(vii)   ensure that acceptance/non-acceptance of the internal audit objection is done with appropriate reasons and the details of remedial action initiated in accepted cases, is communicated to the CIT(Audit) within 3 months of receipt of the internal audit memos;

(viii)   settle, with the CIT (Audit) concerned, the major internal audit objections having tax effect above Rs.1,00,000/- in IT/CT and Rs.30,000/- in Other Taxes, and ensure that the Addl./Jt. CIT Range settles the internal audit objections involving tax effect below these limits with the Addl. CIT (Audit), within 4 months of the receipt of the Internal Audit memos;

(ix)   in a case where there is dispute between the administrative CIT and the CIT (Audit) with regard to the settlement of the internal audit objection, and/or the remedial action

(x)   taken, the administrative CIT shall report the matter, with full facts and reasons, to his/her jurisdictional CCIT, who shall take up the matter with the CIT(Audit), and the decision of the CCIT shall be final.

5. Role of Additional CsIT (Audit): The Addl./ Jt. CsIT(Audit) shall,

(i)   have audit jurisdiction over cases pertaining to jurisdiction of CsIT assigned to him;

(ii)   have administrative control and supervision over the working of IAPs and SAPs functioning under him;

(iii)   ensure the effective functioning of the IAPs and SAPs;

(iv)   submit monthly report to CIT (Audit) with regard to the work done by the IAPs and SAPs;

(v)   assist the CIT (Audit) in maintenance of Ledger Cards and Registers with regard to Internal/Receipt Audit objections;

(vi)   coordinate with the concerned Addl. CIT/JCIT Range with regard to expeditious settlement of Internal Audit Objections involving tax effect below Rs.1,00,000 in IT/CT and Rs.30,000 in Other taxes, within prescribed time limit;

(vii)   ensure that the norms of Internal Audit are followed/implemented and that the targets of Internal Audit are achieved; and,

(viii)   assist the CIT (Audit) in ensuring proper maintenance of prescribed registers and timely submission of reports and statistics.

6. Role of Add.. CsIT/ JCsIT (Assessment Range): The Addl./Jt. CsIT (Assessment Range) shall,

(i)   ensure that remedial action is taken within the prescribed time limits, and shall facilitate prompt recovery of tax;

(ii)   ensure that records requisitioned by the IAP/SAP are made available expeditiously; ensure that objections;

(iii)   ensure timely submission of reports relevant to the Audit set up;

(iv)   ensure that cases selected for internal audit are audited by Internal audit before relevant case records are given to Receipt Audit.

7. Role of DlT(Audit) :

The Director of Income Tax ( Audit ), through the DGIT (Admin.), shall continue to act as the field arm of the Board in respect of the Internal Audit functions of the Department. The functions of the DIT (Audit) shall, inter alia, include,

(i)   preparation of the National Action Plan Targets for Internal Audit Wing, both for Internal and Receipt Audit, for consideration of the Board for its inclusion in the Annual Central Action Plan;

(ii)   prescription of the norms for Internal Audit, keeping in view the increase in the tax base, focus areas of the Department and other relevant factors as may be prescribed by the Board;

(iii)   monitor the functioning of the Internal Audit Wing;

(iv)   monitoring the settlement of major internal audit objections in accordance with the criteria and the time schedule;

(v)   carry out Inspection of the functioning of the Internal Audit Wing under the respective CCs (CCA), with the approval of the DGIT (Admin.), and submit report to the DGIT(Admin.) within a fortnight thereafter;

(vi)   collection and collation of information regarding critical areas where mistakes have been detected by Revenue Audit and Internal Audit.

(vii)   coordination with CIT(Audit) and Administrative CIT regarding maintenance of Ledger Cards, and Registers, in respect of both the Internal Audit and Receipt Audit;

(viii)   preparation of updated Check Sheet for Internal Audit, to be incorporated in the software subsequently and to be revised/updated every 3 years, and its circulation to the CCs(CCA)/ CsIT(Audit);

(ix)   conduct Seminars /Workshops every year for the officers/staff posted in the Internal Audit Wing in co-ordination with the CCs(CCA)/CsIT(Audit), and ensure that similar training programmes are organized by the CCs(CCA)/CsIT(Audit) every year ;

(x)   devise necessary reporting mechanism, and to prescribe the forms and registers in consultation with DIT(Systems) and DOMS;

(xi)   prepare Annual Report of Internal Audit Functions of the Department, incorporating the highlights gathered through Inspections and Performance Audit, and submit the Annual Report to the Board by 30th June every year.

V. Timely and appropriate action: With regard to remedial action on the internal audit objections,

(i)   in respect of audit objections involving revenue of Rs.1 ,00,000/- or more in Income Tax/Corporate Tax cases and Rs.30,000/- or more in other Direct Taxes cases, the Commissioners concerned shall be personally responsible for careful examination of such objections and issue of instructions to the A.Os on the appropriate remedial action to be taken within a month of the receipt of the internal audit objection memo;

(ii)   in respect of audit objections involving revenue below the limits prescribed in (a) above, the Commissioners should ensure that the Addl./Jt. Cs.I.T Ranges issue similar instructions to the AOs within the said period of one month; and,

(iii)   the choice of such remedial action, whether under section 154 or 147 or 263, should be carefully considered in the light of existing legal provisions and its sustainability in appeal.

VI. Remedial action:

(i)   An Audit objection should be accepted and remedial action should be taken in a case where the audit objection relating to an error of facts or an issue of law is found to be correct;

(ii)   Even if objection is not accepted by the CIT, remedial action should be initiated, as a precautionary measure, in respect of such audit objections pending final settlement with the CIT(Audit)/the decision of the CCIT concerned, except where

(a) the CIT is of the view that the interpretation of fact or law by the Internal Audit is in conflict with a decision of the Supreme Court and the decision squarely applies to the facts of the case, or

(b)   the CIT is of the view that the interpretation of fact or law by the Internal Audit is in conflict with a decision of the jurisdictional High Court, which is squarely applicable to the facts of the case and the operation of which has not been stayed by the Supreme Court, or

(c)   the CIT is of the view that the Assessing Officer has acted in conformity with Board s Instruction/Circular, or

(d)   the audit objection raised is on facts, and the CIT, after necessary verification, is of the opinion that the audit objection is factually incorrect.

(iii)   Appropriate remedial action should invariably be initiated within one month of the receipt of the internal audit objection memo, except for in circumstances mentioned in sub-paras (ii) a, b, c & d above.

VII. Calling of Explanation & Action thereon:

i.    Explanation of the officer and staff concerned should invariably be obtained where the Internal Audit objection, involving revenue of Rs. 1,00,000/- or more in Income-tax/Corporate Tax and Rs. 30,000/-or more in other Direct Taxes, have been accepted, or the mistakes, inter alia, arise from anyone or more of the following reasons:

(a)   failure to follow departmental instructions/circulars;

(b)   failure to follow binding judicial decisions; and;

(c)   palpable mistakes on fact or law, or mistakes arising from gross negligence or malafide action.

ii.    Besides, explanation of the officer and staff concerned should be obtained,

(a)   in a case of default in adhering to the time limit prescribed or other defaults in complying with requirements mentioned in para IV.

(b)   where failure to take timely and appropriate remedial action in respect of objections raised by Internal Audit leads to irretrievable loss of revenue.

iii.    Further, in cases of objections involving arithmetical inaccuracy in calculation or computation, the accountability of the dealing staff, besides that of the assessing officer, cannot be over-emphasized. Hence, if the mistake is, inter alia. on account of anyone or more of the following reasons, the explanation of the staff responsible for the mistake should invariably be obtained,

(a)   where an issue is considered/discussed in the body of assessment order, and necessary addition on the issue is directed to be made, or where a deduction is directed to be allowed by the assessing officer, but such directions are not taken into account at the time of calculation of tax, interest and surcharge;

(b)   where there is totaling mistake in the computation of income;

(c)   where an income disclosed in the return is not included in the computation in the assessment order, except where the assessing officer has discussed in the body of assessment order and directed not to include it;

(d)   where there is wrong calculation of tax including application of wrong rate of tax;

(e)   where there is wrong calculation of interest including application of wrong rate of interest or wrong calculation of period for which interest is leviable;

(f)   where any income is added in the computation of income more than once;

(g)   Where wrong set off of brought forward losses, unabsorbed depreciation, loss on long! short term capital gain etc. in the scrutiny/search assessments, not commented by the assessing officer in the assessment order, has been allowed;

(h)   where wrong verification of, or failure to verify, the arrear demand before the issue of refund results in wrongful issue of refund;

(i)   where credit of pre-paid taxes is wrongly allowed.

iv.    The procedure outlined at para 7.6 of the Instruction No. 09 of 2006 shall apply mutatis mutandis to the major objections raised by the Internal Audit.

VIII. Scope of Internal Audit: Besides the parameters mentioned above, the scope of Internal Audit would continue to be guided by para 2.2 of Chapter-2 of the Internal Audit Manual, 2003 as amended from time to time.

This Instruction would be applicable with effect from 1-6-2007.

[F.NO. 246/109/2004-A&PC-I]

Annexure I

Annexure II