The Hindu Business Line : Ceiling on tax audits: Apex court stays Madras HC order

THE Supreme Court has stayed the Madras High Court order relating to the issues of fixing a ceiling on tax audit assignments and the minimum audit fees chargeable by the members of the Institute of Chartered Accountants of India (ICAI).

The ICAI had challenged the Madras High Court order in the apex court through a special leave petition. The Madras High Court had in March this year ruled that the ICAI's move to place restrictions on the number of tax audits that a chartered accountant could accept was "arbitrary" and in violation of the Constitution.

"The Supreme Court has stayed the Madras High Court order. The existing two notifications of the institute on the issues of tax audit and minimum audit fees would continue to be alive," Mr G. Ramaswamy, ICAI Central Council member, told Business Line.

The Central Council, which met here last month to review the issue once again, decided against increasing the existing limit on the number of tax audit assignments that could be accepted by a CA for a financial year. It then decided to move the Supreme Court against the Madras High Court order.

Informed sources said that the need to maintain quality work and also to provide opportunity for younger members of the profession were the main factors that prompted the ICAI to continue with the existing limit for tax audit assignments and not increase it.

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