The Tax Publishers2021 TaxPub(DT) 0142 (SC)

INCOME TAX ACT, 1961

Section 44AB Section 22

Where Chartered Accountants, challenged constitutional validity of Guidelines No. 1-CA(7)/02/2008 dated 8-8-2008, which mandates cap on number of audits to be done by chartered accountants, considering that there were conflicting judgments of different High Courts taking different views, and it was an issue of public importance affecting Chartered Accountants as well as citizens who had to obtain compulsory tax audits, therefore, to settle law and to clear uncertainty among tax professionals and citizens, it was found appropriate that Court transfer writ petition, to authoritatively pronounce law on subject.

Tax audit under section 44AB - Constitutional validity of Guidelines No. 1-CA(7)/02/2008 dated 8-8-2008, which mandates cap on number of audits to be done by chartered accountants - Transfer of writ petition -

Chartered Accountants-contended that Chapter VI of Guidelines No. 1-CA(7)/02/2008 dated 8-8-2008, issued by Council was violative of article 19(1)(g) of Constitution of India. Aforesaid Guidelines, stipulates that a Member of ICAI in practice shall not accept, in a financial year, more than 'specified number of tax audit assignments', in terms of section 44AB. Petitioner- Institute of Chartered Accountants of India (ICAI) filed transfer petition before Supreme Court for transfer of several writ petitions pending in the Kerala High Court, Madras High Court and Calcutta High Court. Held: The fact that Supreme Court on 3-4-1991 dismissed the Transfer Petition of ICAI observing that the concerned High Courts may dispose of the writ petition on early date, same could not be treated as any kind of bar in transferring the writ petition in instant batch of cases. At the time when the earlier transfer petition was dismissed, conflicting judgments on subject in issue by different High Courts had not come. With respect to the cap on the number of audits, there are conflicting judgments of different High Courts taking different views on the similar guidelines. Guidelines which were challenged in High Court and consequent disciplinary proceedings initiated against various chartered accountants throughout country was an issue of public importance affecting Chartered Accountants as well as citizens who had to obtain compulsory tax audits. Therefore, to settle law and to clear uncertainty among tax professionals and citizens, it was appropriate that Court might transfer writ petition, to authoritatively pronounce law on subject.

REFERRED :

FAVOUR : In favour of petitioner.

A.Y. :



IN THE SUPREME COURT OF INDIA

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