Sec. 143 Power & Duties of Auditor & Auditing Standards- Companies Act 2013

SEC 143(1) :
This section provides that the auditor of the company shall have the right to have access at all the times to the books of accounts and vouchers of the company , whether kept at the registered place or at some other places of the company. He can obtain all the information and explanations which to the best of his knowledge and belief were necessary for the purpose of his duties as an auditor of the company. The auditor should also enquire about the following things:-
Whether loan and advances made by the company on the basis of security are properly secured and the terms and conditions on which it is made are prejudicial to the interest of the company or its members
Whether loans and advances made by the company are shown as deposits.
Whether personal expenses have been charges to revenue account
In case of a company other than banking company or an investment company so much of the assets of the company consists of share , debentures or other securities have been sold at a price less than the price at which these securities are purchased by the company
Where it is stated in the books of accounts that shares are issued in cash then whether the cash in respect of these shares have actually been received or not and in case the cash is not received then whether it is clearly shown in the books of accounts or not.
Whether the transactions of the company are represented merely by books entries are prejudicial to the interest of the company.
The auditor of the holding company shall have the right to have access to all the records of the subsidiary company also.

Sec 143(2)The auditor should make a report to the company on the accounts examined by him and in respect of the financial statement that are required to be laid before the company in general meeting. The report shall be given after taking into consideration the provisions of this act , accounting standards , auditing standards etc.

Sec 143(3)The auditor report should state the following matters:-
Whether he has obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purpose of audit. In case proper information are not received then the details thereof and effect of such information on the financial statement should be stated in the auditor’s report
Whether proper books of accounts as required by law is maintained or not and whether proper returns adequate for the purpose of audit have been received from the branches not visited by him or not.
Whether the report in respect of a branch which is audited by the auditor other than company auditor has been sent to himWhether the company balance sheet and profit and loss account are in agreement with the books of accounts and returns
Whether financial statement comply with the accounting standards
The observations and comments of the auditor on the financial transactions or matters which have adverse effect on the company
Whether any director is disqualified to be appointed as a director
Any qualifications , reservations or adverse remarks in respect of the maintenance of the books of accounts or other matters connected herewith
Whether the company has adequate internal financial control system in place and operative effectiveness of such control
Whether the company has disclosed the impact of any pending litigation if any in the financial statement
Whether the company has made provision in respect of any material foreseeable losses as required by law or accounting standards including the derivative contracts
Whether the company has made delay in transferring the amount required to be transferred to the Investor Education and Protection Fund by the company.

Sec 143(4)Where any of the matters required to be included in the audit report under this section is answered in negative or with a qualification then in that case auditor is required to state the reasons of such reservations and negative remark

Sec 143(5)

In case of Govt company the C&AG will appoint the auditor to conduct the audit of the company. The C&AG will also give the directions and the manner in which the accounts of the govt company are required to be audited by the auditor. The auditor then after completing the audit will issue an audit report to the C&AG which will include all the matters which are stated above. In additions to these matters the auditor of the govt company shall state in his audit report the direction issued by C&AG , the actions taken there upon and the its impact on the accounts and financial statement of the company.

SEC 143(6)On receipt of audit report of the govt company the C&AG can carry out supplementary audit with 60 days from the date of receipt of such audit report. He may also comment upon the audit report. The audit report should be sent to every person to whom copies of audited financial statement are sent and the copy of such audit report shall also be place at the AGM

SEC 143(7)

In case of Govt Company the C&AG may require that the test audit of the company should be conducted.

SEC 143(8)Branch is in India —- The audit of such branch can be done by the Company auditor or by any other person qualified to be appointed as an auditor as per Sec 139
Branch is in some other countries —— The audit of such branch shall be conducted by an accountant or by any such person qualified to be appointed as an auditor as per the laws of that country.
The branch auditor should prepare a report on the books of accounts of the branch audited by him and send a copy of such audit report to the company auditor.

Sec 143(9)

The auditor shall comply with the accounting standards

SEC 143(11)

The Central Govt may in consultation with the National Financial Reporting Authority direct that the audit report in case of specific class of companies shall include a statement on such matters as may be specified therein.

SEC 143(12)

If an auditor of the company in the course of performance of his duties as auditor has reason to believe that an offence involving fraud is being or has been committed against the company by an officer or the employee of the company then the auditor should immediately report the matter to the central govt within such time and in such manner as may be prescribed.

The auditor should forward his report to the board or the audit committee as the case may be immediately after he comes to know about the fraud seeking their reply or observations within 45 days.

On receipt on such reply or observations of the board or the audit committee the auditor should forward his report along with the reply or observations of the board or the audit committee and his comments on such reply or observations to the central govt within 15 days.

In case no reply or observations has been received by the auditor from the board or the audit committee then in that case the auditor should send the audit report along with a note containing the details of his report that was earlier forwarded to the board or the committee for which he has failed to receive any comments or observations

Sec 143(14)The provision of this section shall apply to the cost auditor conducting cost audit and the company secretory doing secretarial audit

Sec 143(15)

If the Chartered accountant , company secretary or the cost auditor do not comply with any of the provisions of this act then he will be punishable with a fine which shall not be less than Rs. 1 lakh but which can be extend to Rs. 25 lakh

Fine for Late filing of TDS Return u/s. 234E is constitutionally valid.

We would like to share a Judgement regarding Fine for Late filing of TDS Return u/s. 234E ofBombay High Court which is recently issued in the case Rashmikant Kundalia Vs. UOI, WritPetition No. 771 of 2014.  In this wirt Petition, Petitioners have challenged the constitutionalvalidity of section 234E of the Income Tax Act, 1961. Section 234E seeks to levy a fee of Rs.200/- per day (subject to certain other conditions as set out therein) inter alia on a person who deducts Tax at Source (TDS) and then fails to deliver or cause to be delivered the TDS return/statements to the authorities within the prescribed period.

Petitioner No.1 is a practising Chartered Accountant who has received several notices under section 200A of the Act that were served by the Revenue on his various clients. According to the Petitioners, section 234E is ultra vires and violative of Article 14 of the Constitution of India and therefore deserves to be struck down by this Court. Consequently, even the notices issued by the Revenue ought to be set aside.

Download Judgment Copy of Bombay High Court.

CPC (TDS) Demands for Payment of Outstanding Late Filing Fee u/s. 234E.

Recently CPD (TDS) has issued Demand / Follow-ups notice to Taxpayers for payments of outstanding Late Filing Fee u/s. 234E which is as under: 

As per the records of CPC (TDS), there is an outstanding default of Rs. 0.00 on account of Late filing fee Levy u/s 234E, for the TANs associated with your PAN. The TAN-wise summary of the default is attached for your reference.

Section 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day's delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). The provision for Levy of Late filing fee was introduced to improve Filing Compliance and to avoid subsequent inconvenience to the taxpayers due to inordinate delays in availability of tax credits in their 26AS Statements. 

This assumes further significance in view of the decision of the Hon�ble High Court of Bombay, dated February 6 2015, upholding the validity of the Levy for Late Filing u/s 234E. The court has observed the following in its decision in the case of Rashmikant Kundalia vs. UOI:

Immediate Attention:

• The late filing of TDS returns by the deductor causes inconvenience to everyone and s. 234E levies a fee to regularize the said late filing.
• The fee is not in the guise of a tax nor is it onerous.
• The levy is constitutionally valid.

CPC (TDS), in its endeavor to strengthen TDS Compliance, is reaching out to you to reiterate the essence of timely filing of Quarterly TDS Statements. Section 200(3) of the Income Tax Act, 1961 read with Rule 31A of the Income Tax Rules, 1962, prescribes the following due dates for filing of TDS Statements:

Where the TDS Statements are not filed within the due date, CPC (TDS) sends Intimations u/s 200A of the Act that includes Levy under section 234E. Your attention is hereby drawn towards the provisions of section 234E of the Act (Levy for Late filing of TDS Statement), which reads as follows:

• Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
• The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be.
• The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.
• The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.

Action to be taken by the TANs associated with your PAN, in case of levy intimated u/s 234E :

• Please download the Justification Report from our portal TRACES to view your latest outstanding demand. Please click here for assistance on downloading the Justification Report.
• Use Challan ITNS 281 to pay the Levy with your relevant Banker, if there are no challans available for consumption.
• Please use the Online Corrections facility on TRACES to submit corrections, to payoff the demand. To avail the facility, please Login to TRACES and navigate to Defaults tab to locate Request for Correction from the drop-down list. You can refer to our e-tutorials for necessary help.
• Alternatively, you may also download the Conso File from our portal provided there are no Short Payment Defaults.
• Prepare a Correction Statement using the latest Return Preparation Utility (RPU) and File Validation Utility (FVU).
• Submit the Correction Statement at TIN Facilitation Centre.

For any assistance, you can write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 03441800 103 0344 FREE.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

No Section 234A Interest on SA tax paid before due date of filing ROI

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES (CBDT)
NEW DELHI

CIRCULAR NO. 2/2015, Dated: February 10, 2015

Subject: Chargeability of Interest under Section 234A of the Income-tax Act, 1961 on self-assessment tax paid before the due date of filing of return of income-regarding

Interest under Section 234A of the Income-tax Act, 1961 (hereinafter the Act) is charged in case of default in furnishing return of income by an assessee. The interest is charged at the specified rate on the amount of tax payable on the total income, as reduced by the amount of advance tax, TDS/TCS, any relief of tax allowed under section 90 and section 90A, any deduction allowed under section 91 and any tax credit allowed in accordance with the provisions of section 115JAA and section 115JD of the Act. Since self-assessment tax is not mentioned as a component of tax to be reduced from the amount on which interest under section 234A of the Act is chargeable, interest is being charged on the amount of self-assessment tax paid by the assessee even before the due date of filing of return.

2. It has been held by the Hon’ble Supreme Court in the case of CIT vs Prannoy Roy, 309 ITR 231 (2009) that the interest under section 234A of the Act on default in furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing of the income-tax return for the relevant assessment year. Accordingly, the present practice of charging interest under section 234A of the Act on self-assessment tax paid before the due date of filing return was reviewed by CBDT.

3. The Board has decided that no interest under section 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing of return of income.

4. This Circular may be brought to the notice of all officers for compliance.

5. Hindi version shall follow.

F. No. 385/03/2015-IT(B)

(Sandeep Singh)
Under Secretary to Government of India

Auditor’s Appointment In Form ADT-1

There is a provision in Company Law for filing of intimation to Registrar of Companies, Ministry of Corporate Affairs of appointment of statutory auditor in the Annual General Meeting by shareholders. This provision of filing intimation is an annual provision in Companies Act, 1956 and continued in Section 139 of Companies Act, 2013.

Companies Act, 2013, there are a few changes in

-       Procedure for filing of such Intimation.

-       Due date for filing of intimation,

-       The responsible person to file such intimation with MCA/ ROC. 

Appointment of Auditor in Companies Act, 2013

Every company shall, at the first Annual General Meeting, appoint an individual or a firm as an auditor to hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every sixth meeting. ( Section 139 of the Companies Act, 2013 )

Further it shall be duty of the Company to place the matter relating to such appointment for ratification by members at every Annual General Meeting. Before appointment, Auditor shall be liable to provide the written consent to the Company for such appointment, along with a certificate to the effect that the appointment and that appointment shall be in accordance with the prescribed conditions.

INTIMATION OF APPOINTMENT OF STATUTORY AUDITOR  TO MCA 

It is duty of the Company to file form for intimation of the appointment of Statutory Auditor in FormADT.1 as attachment with E-form GLN.2 with MCA. The Company has to inform the auditor concerned of their appointment, and also file a notice of such appointment with the MCA within fifteen days of the meeting in which the auditor is appointed.  ( Companies Act 2013 )

 Since the last date for conducting the AGM for most companies was 30th September’2014 and the auditors would have been appointed in the AGM, therefore the notice of appointment of auditors is to be filed with the Registrar by the 15th October’2014.

As per Section 139 of the Act, read with Rule 5 of Companies (Audit and Auditors) Rules, 2014, the auditor who has already been auditor for five consecutive years or 10 years in case of firm (two terms of five consecutive years in case of firm) would be re-appointed for 5 years but the re-appointment term will be 3 years in the following cases :

a) Listed Companies or Unlisted Public Companies having paid up capital of Rs.10 Crores or more or

b) Private Companies having paid up capital of Rs. 20 Crores or more or

c) Companies having public borrowings from Banks, Public Financial Institutions or Public Deposits of Rs. 50 Crores or more.

The AGM resolution shall contain 2019 in case re-appointment is for 5 years and 2017 in case re-appointment is for 3 years.

Earlier under Companies Act, 1956, it was duty of the Auditor to file form 23B with MCA for an appointment as Statutory Auditor. 

 Intimation of appointment of First Auditor to MCA - Companies Act, 2013:

 Company is under an obligation to give notice of appointment to the MCA / Registrar in Form No.ADT.1 through E-form GLN.2 in case of appointment of auditors under section 139(1)  i.e other than first auditor.

Company is under no obligation to give notice of appointment of First Auditor to the MCA/ Registrar as the appointment of first auditors by the Board of directors of a company is as per section 139(6)

ON THE LETTER HEAD OF THE COMPANY CONTAING CIN, ADDRESS AND E MAIL ID OF THE COMPANY

CERTIFIED TRUE COPY OF THE RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING HELD ON TUESDAY, 30.09.2014 OF THE OF THE COMPANY HELD AT ----------------------------------------

APPOINTMENT OF AUDITOR:

“RESOLVED THAT pursuant to the provision of section 139 and other applicable provision, if any of the Companies Act, 2013 read with the underlying rules viz. Companies (Audit and auditors) Rules, 2014 as may be applicable the retiring auditors M/s.XYZ  Chartered Accountants having FRN --------/ Mem No.--------------, be re-appointed as statutory auditors of the company to hold office from the conclusion of this Meeting until the conclusion of the Annual General Meeting (AGM) of the company to be held in the year 2017/2019 subject to ratification of the appointment at every AGM at a remuneration (including term of payment) to be fixed by the board of Direction of the company, plus service tax and such other tax(es), as may be applicable & reimbursement of all out-of-pocket expenses in connection with the audit of the accounts of the company.”

For and on behalf of the Board

                                                              

Place: 

Date:                                                                 

                                   

Auditors Consent and Certificate

[Pursuant to the provisions of Section 139 of Chapter X of the Companies Act, 2013]

The Board of Directors,

ABC PRIVATE LIMITED

REgd Office :

Dear Sir(s),

In connection with re-appointment of our firm / Individual Mr, X Chartered Accountant / M/s. XYZ Chartered Accountants  , as auditors of ABC Private Limited in accordance with the provisions of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014 I the undersigned representing the Firm in the capacity of a sole proprietor/partner and the Firm hereby certify that:  

1.    We hereby give our consent to be appointed as Auditor of the Company u/s 139 of the Act.

2.    we are eligible to be re-appointed as auditors, and we have not incurred any disqualifications under the Act;

3.    we are not disqualified for appointment under the provisions of Chartered Accountants Act, 1949 and rules and regulations made there under;

4.    the proposed appointment is as per the terms provided under the Act;

5.    the proposed appointment is within the limits laid down by or under the authority of the Act;

6.    no orders have been issued and there are no proceedings pending against the firm or any other partner of the firm with respect to professional matters of conduct before the Institute of  Chartered Accountants  of India, any competent authority , or any court.

7.    we hereby declare that the appointment, if made shall be in accordance with the conditions as prescribed under Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014 and as provided in section 141 of Companies Act 2013.

Thanking You,

Yours Faithfully

For XYZ Chartered Accountant

Chartered Accountants

Firm Registration Number:

CA X

Partner/Proprietor

Membership no. 99999

Place: 

Word Format of ADT-1

FORM NO. ADT-1 [See rule 4(2) of the Companies (Audit and Auditors) Rules, 2014] Notice of appointment of auditor by the company 1.(a) Corporate identity number (CIN) of the company     U51909DL2011PTC223725 (b) Global Location Number (GLN) of company

2. (a) Name of the company:                             ABC PRIVATE LIMITED   (b) Address of the registered office or of the principal place of business in India of the company:                                                  (c) E-mail ID of the company                                          corporate@gmail.com 3. Date of meeting at which the auditor appointed 26.09.2014

4. Category of Auditor                                                Firm 5.(a) Income Tax PAN of Auditor or auditor’s firm        (b) Name of the Auditor or Auditor’s firm                XYZ Chartered Accountants    (c ) Auditor’s firm’s registration number                      (d) Address of the Auditor or auditor’s firm                   (e) City                                                                       (f) State                                                                      (g) Pin code                                                               (h) Email id of the auditor or auditor’s firm                  Place: Date:

Verification I am authorised by the Board of Directors of the Company vide resolution no…………. dated…………… to sign this form and declare that all the requirements of Companies Act, 2013 (18 of 2013) and the rules made there under in respect of the subject matter of this form and matters incidental thereto have been complied with. I also declare that all the information given herein above is true, correct and complete including the attachments to this form and nothing material has been suppressed. Designation (to be given) :                      Director DIN of the person signing the form:

India Taxes- Due Date Alert for the month February 2015

 

	Due Date	Related to	Compliance to be made
1	05.2.2015	Service Tax	Payment of Service Tax for the Month of January 2015
2	07.2.2015	TDS/TCS (Income Tax)	·        Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of January 2015. ·        Deposit TDS from Salaries  deducted during the month of January 2015 •   Deposit TCS for collections made under section 206C including sale of scrap during the month of January 2015, if any •    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of January 2015, if any
3	20.2.2015	VAT	Payment of VAT & filing of monthly return for the month of January 2015
4

Late Filing Fees and Penalty for Failure to Furnish/Delay in Furnishing the TDS/TCS Statements.

Recently Finance (No.2) Act, 2014 has been amended by CBDT and as per this amendment the details of late filing fees and penalty for failure to furnish / delay in furnishing the TDS/TCS Statements is as under:

Before understanding the penalty provisions for failure to furnish the statement of Tax Deducted at Source or statement of Tax Collected as Source (i.e. commonly known as TDS/TCS return) weshall first have a look at the few basic duties of a person liable to deduct/collect tax at source anddue dates for filing of TDS/TCS return.

Duties of the person liable to deduct/collect tax at source
He shall obtain Tax Deduction Account Number or Tax Collection Account Number (as the case may be) and quote the same in all the documents pertaining to TDS/TCS.
He shall deduct/collect the tax at source at the applicable rate.
He shall pay the tax deducted/collected by him to the credit of the Government.
He shall file the periodic TDS/TCS statements, i.e., TDS/TCS return.
He shall issue the TDS/TCS certificate in respect of tax deducted/collected by him.
Due Dates for filing of TDS/TCS return

The due dates for filing of statement of TDS i.e. TDS return for different quarters are as follows:

Date of ending of the quarter of the financial year	Due date for Government deductor	Due date for any other deductor
30th June	31st July of the financial year	15th July of the financial year
30th September	31st October of the financial year	15th October of the financial year
31st December	31st January of the financial year	15th January of the financial year
31st March	15th May of the financial year immediately following the financial year in which deduction is made	15th May of the financial year immediately following the financial year in which deduction is made.

Now we will understand the provisions relating to penalty for not furnishing the TDS/TCS statement i.e. TDS/TCS return.
Basic Provision
 person who fails to file the TDS/TCS return or does not file the TDS/TCS return by the due dates prescribed in this regard has to pay late filing fees as provided under section 234E and apart from late filing fees he shall be liable to pay penalty under section 271H. In this part you can gain knowledge about the provisions of section 234E and section 271H.
Late filing fees under section 234E
As per section 234E, where a person fails to file the TDS/TCS return on or before the due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues. The amount of late fees shall not exceed the amount of TDS.
TDS/TCS return cannot be filed without payment of late filing fees as discussed above. In other words, the late filing fees shall be deposited before filing the TDS return. It should be noted that Rs. 200 per day is not penalty but it is a late filing fee.