SUPREME COURT OF INDIA

Before:- S.P. Bharucha and V.N. Khare, JJ.

Civil Appeal No. 2824 of 1992. D/d. 8.12.1998

T.D. Venkata Rao - Appellant

Versus

Union of India - Respondent

For the Appellant :- A.T.M. Sampath, Advocate.

For the Respondent :- K.N. Shukla, Sr. Advocate and B.K. Prasad, Advocate.

Audit of accounts - By Chartered Accountants - For Income-tax purposes law requires audit of accounts on exceeding specified limits - Accounts to be audited by Chartered Accountants - It cannot be said that Income-tax practitioners has the same expertise as chartered Accounts - Provisions of law excluding Income-tax practioners not violative of Arts 14, 19 of Constitutions. (Income Tax Act, 1961, Section 44AB - Constitution of India, Articles 14 and 19.

[Paras 4 and 5]

JUDGMENT

Bharucha, J. - The appellant is not represented, though we have waited for some time. The appeal is, therefore, dismissed with no order as to costs.

2. Restored.

3. We have heard learned counsel for the appellant. The appellant challenged the validity of Section 44(AB) of the Income-tax Act, 1961 insofar as it required every person carrying on business, if his total sales, turnover or gross receipts exceeded Rs. 40 lacs, and every person carrying on a profession, if his gross receipts exceeded Rs. 10 lacs, in any previous year "to get his accounts of such previous year audited by an accountant before the specified date.......". The Explanation to the Section defines "Accountant" for its purpose to have the same meaning as in the Explanation below Section 288(2). Section 288 deals with authorised representatives. Sub-section (2), clause (4) refers to an Accountant. The explanation says that in that Section "Accountant" means a Chartered Accountant within the meaning of the Chartered Accountants Act and includes persons entitled to be appointed to act as auditors of companies in a particular State by reasons of the provisions of Section 226(2) of the Companies Act.

4. The challenge is on behalf of the Income-tax Practitioners. It is submitted that they are entitled to be authorised representatives on behalf of the assessees and that excluding them for the purpose of auditing accounts as aforestated violates Articles 14 and 19 of the Constitution. The High Court in the order under challenge, as other High Courts had done, rejected the challenge and, in our view, rightly so.

5. Chartered Accountants, by reason of their training have special aptitude in the matter of audits. It is reasonable that they, who form a class by themselves, should be required to audit the accounts of businesses whose income exceeds Rs. 40 lacs and professionals whose income exceeds Rs. 10 lacs in any given year. There is no material on record, and indeed, in our view, there cannot be, that an Income-tax Practitioner has the same expertise as Chartered Accountants in the matter of accounts. For the same reasons, the challenge under Article 19 must fail, and it must be pointed out that these Income-tax Practitioners are still entitled to be authorised representatives of assessees.

6. The appeal is, therefore, dismissed, with costs.

Appeal dismissed.