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The Health Security se National Security Cess Act, 2025

Chapter V AUDIT AND ASSESSMENT

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Chapter V AUDIT AND ASSESSMENT

11. Scrutiny and assessments.

Statutory text
  1. (1) The proper officer may scrutinise the return and related particulars furnished by the registered taxable person to verify the correctness of the return and inform him of the discrepancies noticed, if any, in such manner, as may be prescribed, and seek his explanation thereto and in case—
    • (a) the explanation so given is found acceptable, the taxable person shall be informed accordingly and no further action shall be taken in this regard;
    • (b) no satisfactory explanation is furnished within a period of thirty days of being informed by the proper officer or such further period, as may be permitted by him, or where the taxable person, after accepting the discrepancies, fails to take the corrective measure in his return for the month in which the discrepancy is accepted, the proper officer may initiate appropriate action in accordance with the provisions of this Act.
  2. (2) Where a taxable person fails to furnish the return under section 10, either on his own motion or in response to a notice issued, the proper officer may proceed to assess the liability of cess of the said person to the best of his judgement, taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the end of the month to which the cess not paid relates.
  3. (3) Where a taxable person fails to obtain registration, or whose registration has been cancelled but who was liable to pay cess, the proper officer may proceed to assess the liability of the cess payable by such taxable person to the best of his judgment for the relevant calendar month and issue an assessment order within a period of five years from the end of the month to which the cess not paid relates.
  4. (4) No assessment order shall be passed under sub-section (2) or sub-section (3) by the proper officer without giving the taxable person a reasonable opportunity of being heard.

Chapter V AUDIT AND ASSESSMENT

12. Audit.

Statutory text
  1. (1) The proper officer not below the rank of a Commissioner or any other officer authorised by him may, by way of a general or special order, undertake audit of any registered taxable person for such period, at such frequency and in such manner, as may be prescribed.
  2. (2) The officers referred to in sub-section (1) may conduct audit in their office or at the place of business of the registered taxable person.
  3. (3) The registered taxable person shall be informed by way of a notice not less than fifteen working days prior to the conduct of audit in such manner as may be prescribed.
  4. (4) The audit under sub-section (1) shall be completed within a period of three months from the date of commencement of such audit.
  5. (5) Where the proper officer referred to in sub-section (1) is satisfied that the audit in respect of such registered taxable person cannot be completed within the period of three months, he may, for the reasons to be recorded in writing, extend the said period by a further period not exceeding six months.
  6. (6) For the purposes of this sub-section, the expression, “commencement of audit” shall mean the date on which the records and other documents called for by the proper officer, are made available by the registered taxable person or the actual institution of audit at the office of the proper officer or at the place of business of such registered taxable person, whichever is later.
  7. (7) During the course of audit, the proper officer may require the registered taxable person—
    • (a) to afford him the necessary facility to verify the books of account or other documents as he may require; and
    • (b) to furnish such information as he may require and render necessary assistance for timely completion of the audit.
  8. (8) On conclusion of audit, the proper officer shall, within thirty days, inform the registered taxable person, whose records are audited, about the findings, his rights and obligations and the reasons for such findings.
  9. (9) Where the audit conducted under sub-section (1) results in detection of cess not paid or short paid or erroneously refunded, the proper officer may initiate action under section 16.

Chapter V AUDIT AND ASSESSMENT

13. Power to summon persons to give evidence and produce documents.

Statutory text
  1. (1) The proper officer under this Act shall have power to summon any person whose attendance he considers necessary, either to give evidence or to produce a document or any other thing, in any inquiry in the same manner, as provided in the case of a Civil Court under the provisions of the Code of Civil Procedure, 1908.
  2. (2) Every such inquiry referred to in sub-section (1) shall be deemed to be a “judicial proceeding” within the meaning of section 193 and section 267 of the Bharatiya Nyaya Sanhita, 2023 (45 of 2023).

Chapter V AUDIT AND ASSESSMENT

14. Access to business premises.

Statutory text
  1. (1) Any officer under this Act, authorised by the proper officer not below the rank of a Joint Commissioner, shall have access to any place of business of a taxable person to inspect books of account, documents, computers, computer programs, computer software, whether installed in a computer or otherwise, and such other things as he may require and which may be available at such place, for the purposes of carrying out any audit, scrutiny, verification and checks, as may be necessary to safeguard the interest of revenue.
  2. (2) Every person in charge of the place referred to in sub-section (1) shall, on demand, make available to the officer authorised under sub-section (1), or the audit party deputed by the proper officer,—
    • (a) such records as prepared or maintained by the taxable person and declared to the proper officer in such manner as may be prescribed;
    • (b) trial balance or its equivalent;
    • (c) statements of annual financial accounts, duly audited, wherever required;
    • (d) cost audit report, if any, under section 148 of the Companies Act, 2013 (18 of 2013);
    • (e) the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961 (43 of 1961); and
    • (f) any other relevant record, for the scrutiny by such officer or audit party, within a period not exceeding fifteen working days from the day when such demand is made, or such further period as may be allowed by the said officer or the audit party.

Chapter V AUDIT AND ASSESSMENT

15. Officers to assist proper officers.

Statutory text
  1. (1) All officers of police, railways, customs and those officers engaged in the collection of land revenue, including village officers, officers of the State Governments and Union territory Administrations shall assist the proper officer in the implementation of this Act.
  2. (2) The Central Government may, by notification, empower and require any other class of officers to assist the proper officers in the implementation of this Act when called upon to do so.

Chapter V AUDIT AND ASSESSMENT

16. Determination of cess not paid or short paid or erroneously refunded.

Statutory text
  1. (1) Where it appears to the proper officer that any cess has not been paid or short paid or erroneously refunded, he shall serve notice on the taxable person chargeable with cess which has not been so paid or which has been so short paid or to whom the refund has erroneously been made due to any lapse on the part of the taxable person, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 17 and a penalty leviable under the provisions of this Act or the rules made thereunder.
  2. (2) No notice under sub-section (1) shall be issued, if the cess which has not been paid or short paid or erroneously refunded in a financial year is less than one thousand rupees.
  3. (3) The proper officer shall issue the notice under sub-section (1) within a period of twenty-four months from the due date for furnishing of return for the month to which the cess not paid or short paid relates to or within a period of twenty-four months from the date of erroneous refund.
  4. (4) Where a notice has been issued for any calendar month under sub-section (1), the proper officer may serve a statement, containing the details of cess not paid or short paid or erroneously refunded for such periods other than those covered under the said sub-section, on the taxable person chargeable with cess.
  5. (5) The service of the statement referred to in sub-section (4) shall be deemed to be the service of notice on the taxable person under sub-section (1), subject to the condition that the grounds relied upon for such month other than those covered under sub-section (1) are the same as are mentioned in the earlier notice.
  6. (6) In case of the cess which has not been paid or short paid or erroneously refunded, the penalty–
    • (a) for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be equivalent to ten per cent. of the cess due from such taxable person or ten thousand rupees, whichever is higher;
    • (b) for the reason of fraud or any wilful misstatement or suppression of facts to evade cess, shall be equivalent to the cess due from such person.
  7. (7) The proper officer shall, after considering the representation, if any, made by the taxable person chargeable with cess, determine the amount of cess, interest and penalty due from such person and issue an order within a period of twelve months from the date of issuance of notice specified in sub-section (4).
  8. (8) Where the proper officer referred to in sub-section (7) is not able to issue the order within the period specified in the said sub-section, another proper officer, not below the rank of Commissioner or an officer, not below the rank of a Joint Commissioner, authorised by him, may, having regard to the reasons to be recorded in writing for delay in issuance of the order under the said sub-section before the expiry of the specified period, extend the said period for a further period not exceeding six months.
  9. (9) Where any cess has not been paid or short paid or erroneously refunded, other than the reason of fraud or any wilful misstatement or suppression of facts to evade cess, the taxable person chargeable with cess may,–
    • (a) before service of notice under sub-section (1), pay the amount of cess along with interest payable under section 17 of such cess on the basis of his own ascertainment of such cess or the cess as ascertained by the proper officer and inform the proper officer in writing of such payment, who shall, on receipt of such information, not serve any notice under sub-section (1) or the statement under sub-section (4), as the case may be, in respect of the cess so paid or any penalty payable under the provisions of this Act or the rules made thereunder;
    • (b) pay the said cess along with interest payable under section 17 within a period of sixty days from the date of receipt of show cause notice by him, and on doing so, no penalty shall be payable and all proceedings in respect of the said notice shall be deemed to be concluded.
  10. (10) Where any cess has not been paid or short paid or erroneously refunded by reason of fraud, or any wilful misstatement or suppression of facts to evade cess, the taxable person chargeable with cess, may,–
    • (a) before service of notice under sub-section (1), pay the amount of cess along with interest payable under section 17 and a penalty equivalent to fifteen per cent. of such cess on the basis of his own ascertainment of such cess, or the cess as ascertained by the proper officer, and inform the proper officer in writing of such payment and the proper officer, on receipt of such information, shall not serve any notice under the said sub-section, in respect of the cess so paid or any penalty payable under the provisions of this Act or the rules made thereunder;
    • (b) pay the said cess along with interest payable under section 17 and a penalty equivalent to twenty-five per cent. of such cess within a period of sixty days from the date of receipt of the notice, and on doing so, all proceedings in respect of the said notice shall be deemed to be concluded;
    • (c) pay the cess along with interest payable thereon under section 17 and a penalty equivalent to fifty per cent. of such cess within a period of sixty days of the date of receipt of the order, and on doing so, all proceedings in respect of the said notice shall be deemed to be concluded.
  11. (11) Where the proper officer is of the opinion that the amount paid under clause (a) of sub-section (9) or clause (a) of sub-section (10) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable.
  12. (12) Notwithstanding anything contained in clause (a) or clause (b) of sub-section (9), the penalty under clause (a) of sub-section (6) shall be payable, where any amount of self-assessed tax or any amount collected as cess has not been paid within a period of thirty days from the due date of payment of such cess.

Chapter V AUDIT AND ASSESSMENT

17. Interest payable on delay in payment of cess.

Statutory text
  1. (1) Every person who is liable to pay cess in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the cess or any part thereof to the Central Government within the specified period, shall, for the period for which the cess or any part thereof remains unpaid, pay on his own, interest at the rate of fifteen per cent. Per annum.
  2. (2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid.

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