Positive Evidence explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A certificate of posting is not proof of communication with a retiring auditor. The Council requires positive evidence of delivery — registered acknowledgement due, hand delivery against acknowledgement, an email acknowledgement, or a UDIN.
From the ICAI Guidance Note on Tax Audit (Revised 2026), Appendix VI, cited at paragraph 9.8, reproducing pages 64 to 71 of Volume II of the Code of Ethics (Revised 2020). The requirement arises under the Chartered Accountants Act, 1949 and is unaffected by the change of income-tax statute.
Why posting is not enough
Paragraph 2.14.1.8(ix): "The Council has taken the view that a mere posting of a letter under certificate of posting is not sufficient to establish communication with the retiring auditor unless there is some evidence to show that the letter has in fact reached the person communicated with. A Chartered Accountant who relies solely upon a letter posted under certificate of posting therefore does so at his own risk."
That view was confirmed by the Rajasthan High Court in J.S. Bhati vs. The Council of the Institute of the Chartered Accountants of India and another — reported at pages 72 to 79 of Volume V of Disciplinary Cases published by the Institute, judgment delivered on 29 August 1975:
"Mere obtaining a certificate of posting in my opinion does not fulfill the requirements of clause (8) of Schedule I as the presumption under Section 114 of the Evidence Act that the letter in due course reached the addressee cannot replace that positive degree of proof of the delivery of the letter to the addressee which the letters of the law in this case require. The expression 'in communication with' when read in the light of the instructions contained in the booklet 'Code of Conduct' cannot be interpreted in any other manner but to mean that there should be positive evidence of the fact that the communication addressed to the outgoing auditor by the incoming auditor reached his hands. Certificate of posting of a letter cannot, in the circumstances, be taken as positive evidence of its delivery to the addressee."
Section 114 of the Evidence Act would ordinarily let a court presume that a posted letter reached its addressee. The High Court held that the presumption cannot substitute for the positive degree of proof that clause (8) requires. So a member may be able to satisfy a court that a letter was probably delivered and still fail the professional test — which is why the four accepted modes below are worth following exactly.
The four modes that give positive evidence
Paragraph 2.14.1.8(x): members should communicate "in such a manner as to retain in their hands positive evidence of the delivery of the communication to the addressee". In the opinion of the Council, the following would in the normal course provide such evidence:
| # | Mode |
|---|---|
| (a) | Communication by a letter sent through "Registered Acknowledgement due" |
| (b) | By hand against a written acknowledgement |
| (c) | Acknowledgement of the communication from the retiring auditor's email address registered with the Institute, or his last known official email address |
| (d) | Unique Identification Number (UDIN) generated on the UDIN portal — subject to separate guidelines to be issued by the Council in this regard |
Note what mode (c) requires: not the sending of an email but an acknowledgement from the retiring auditor's registered or last known official address. An unanswered email is not positive evidence of delivery; a reply, even a bare one, is.
When delivery is deemed
Two situations are treated as delivered even though the letter comes back:
| Return remark | Effect |
|---|---|
| "Office found Locked" written on the acknowledgement due | Deemed as having been delivered to the retiring auditor (paragraph 2.14.1.8(xi)) |
| "No such office exists at this address", where the address used is the same as registered with the Institute on the date of dispatch | Deemed to be delivered, unless the retiring auditor proves that it was not really served and that he was not responsible for such non-service (paragraph 2.14.1.8(xii)) |
The second deeming rule works only if the incoming auditor used the address registered with the Institute on the date of dispatch. Writing to the address printed on last year's audit report, or to an office the member has since left, forfeits the protection — and the burden of producing positive evidence returns to the sender. Check the Institute's record on the day the letter goes out, and keep a copy of what it showed.
Paragraph 2.14.1.8(xii) closes with a wider obligation: "As a matter of professional courtesy and professional obligation it is necessary for the new auditor appointed to act jointly with the earlier auditor and to communicate with such earlier auditor."
Where there is no time to wait
Paragraph 2.14.1.8(xvi) deals with government company and bank audits. The mandatory requirement applies in uniform manner to audits of both government and non-government entities. Where the appointment is made well in time to enable the obligation to be fulfilled, it must be complied with before accepting the audit.
But where the time schedule is such that there is no time to wait for the reply from the outgoing auditor, the incoming auditor:
- may give a conditional acceptance of the appointment;
- may commence the work which needs to be attended to immediately, after he has sent the communication to the previous auditor; and
- should make clear in his acceptance letter that his acceptance "is subject to professional objections, if any, from the previous auditors and that he will decide about his final acceptance after taking into account the information received from the previous auditor".
The concession is to the reply, not to the communication: the letter must still go before work begins.
What "audit", "previous auditor", "certificate" and "report" mean
Paragraph 2.14.1.8(xvii) clarifies the terms members most often query:
- "Audit" — from the Framework for Assurance Engagements: "For assurance engagements relating to historical financial information in particular, such engagements which provide reasonable assurance are called audits." The objective of a reasonable assurance engagement is "a reduction in assurance engagement risk to an acceptably low level in the circumstances of the engagement as the basis for a positive form of expression of the practitioner's conclusion".
- "Previous auditor" — the immediately preceding auditor who held the same or similar assignment comprising the same or similar scope of work. The illustration given is a member appointed for physical verification of inventory of raw materials, spares, stores and finished goods, who must communicate with the member who held the appointment for physical verification of inventory of raw materials, stores, finished goods and fixed assets. And: the mandatory communication is required even where the previous auditor happens to be an auditor for a year other than the immediately preceding year.
- "Certificate" and "report" — the Guidance Note on Reports and Certificates for Special Purposes states that "certificate" as described in laws, regulations or contracts can normally be associated with reasonable assurance. A practitioner provides either reasonable assurance (about whether the subject matter is materially misstated) or limited assurance (that nothing has come to his attention causing him to believe it is materially misstated), and is not expected to reduce engagement risk to zero. So whenever a certificate or a special purpose report is required, the practitioner "needs to undertake a careful evaluation of the scope of the engagement, i.e., whether he would be able to provide reasonable assurance or limited assurance on the subject matter".
The inventory illustration is deliberately imperfect — the two scopes are not identical, one covering fixed assets and the other not, yet communication is still required. The test is same or similar scope of work, not an exact match; and a gap year does not extinguish the obligation. When in doubt on either point, write.
Audit checklist
- Never rely on a certificate of posting.
- Use one of the four accepted modes and keep the positive evidence of delivery on file.
- For email, retain the acknowledgement from the retiring auditor, not the sent copy.
- Send to the address registered with the Institute on the date of dispatch, and keep proof of what that address was.
- Retain the returned envelope where it is marked "Office found Locked" or "No such office exists at this address".
- Where the schedule allows no wait, give a conditional acceptance in writing and send the letter first.
- Communicate with an auditor of an earlier year where he is the previous holder of the assignment.
- Apply the same or similar scope test rather than looking for an identical engagement.
- Record the date of communication in the Appendix VIII record of tax audit assignments.
Common mistakes
- Filing a certificate of posting as evidence of communication.
- Treating an unanswered email as positive evidence.
- Writing to a stale address and losing the deeming protection.
- Commencing work before the letter is sent in a time-pressed government audit.
- Skipping communication because the previous auditor held office two years ago.