T.D. Venkata Rao vs Union Of India
- SCC(1999) 9 SCC 134
- Neutral1998 INSC 466
- AIRAIR 1999 SC 2242
- SCR[1998] Supp (3) SCR 418
Ratio decidendi
The rule this decision rests on
A classification that distinguishes between Chartered Accountants and Income Tax Practitioners for the purpose of auditing accounts under Section 44(AB) of the Income-Tax Act, 1961 is reasonable and does not violate Article 14 of the Constitution, as Chartered Accountants possess special aptitude and expertise in matters of accounts that Income Tax Practitioners do not possess. A restriction confining the audit of accounts under Section 44(AB) of the Income-Tax Act, 1961 to Chartered Accountants alone does not violate Article 19 of the Constitution, as the restriction is justified by the reasonable distinction in expertise and qualifications between Chartered Accountants and other classes of professionals, and does not prevent Income Tax Practitioners from continuing to act as authorised representatives of assessees in other capacities.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BHARUCHA, J. The appellant is not represented, though we have waited from some time. The appeal is, therefore, dismissed with no order as to costs Restored.
We have heard learned counsel for the appellant. The appellant challenged the validity of Section 44 (AB) of the Income-Tax Act,. 1961 in so far 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 Accountancy 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 me Companies Act.
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.
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.
The appeal is, therefore, dismissed, with costs.
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