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MICROSOFT® WINDOWS® SHORTCUT KEYS
Alt + Tab Switch between open applications
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F2 Rename selected icon
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in Windows Explorer
Alt + Enter Open properties window of selected icon
or program
Shift + F10 Simulate right-click on selected item
Shift + Del Delete programs/files permanently
Holding Shift During BootupBoot safe mode or bypass system files
Holding Shift During BootupWhen putting in an audio CD, will prevent
CD Player from playing
WORD® SHORTCUT KEYS
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Ctrl + 1 Single-space lines
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Ctrl + 5 1.5-line spacing
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F12 Save as
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EXCEL® SHORTCUT KEYS
F2 Edit the selected cell
F5 Go to a specific cell
F7 Spell check selected text and/or document
F11 Create chart
Ctrl + Shift + ; Enter the current time
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Alt + Shift + F1 Insert new worksheet
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Ctrl + B Bold highlighted selection
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Ctrl + D Fill
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Ctrl + F Open find and replace options
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Ctrl + U Underline highlighted selection
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Ctrl + 5 Strikethrough highlighted selection
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Ctrl + F6 Switch between open workbooks/windows
Ctrl + Page up & Page Down Move between Excel® worksheets in the
same document
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Alt + = Create formula to sum all of above cells
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Ctrl + Shift + ! Format number in comma format
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Ctrl + Space Select entire column
Shift + Space Select entire row
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OUTLOOK® SHORTCUT KEYSTLOOK® SHORTCUT KEYS
Alt + S Send the email
Ctrl + C Copy selected text
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WINKEY SHORTCUTS
WINKEY + D Bring desktop to the top of other windows
WINKEY + M Minimize all windows
WINKEY +SHIFT + MUndo the minimize done by WINKEY + M
and WINKEY + D
WINKEY + E Open Microsoft Explorer
WINKEY + Tab Cycle through open programs on taskbar
WINKEY + F Display the Windows® Search/Find feature
WINKEY +CTRL + FDisplay the search for computers window
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WINKEY + R Open the run window
WINKEY +Pause /BreakOpen the system properties window
WINKEY + U Open utility manager
WINKEY + L Lock the computer (Windows XP® & later
Sunday, July 6, 2008
269SS of Income Tax Act 1961
ACCEPTANCE OF LOAN OR DEPOSIT OF MONEY
Q1. What is the definition of the words Loans or Deposit?
As per the explanation in section 269SS loan or deposit mean loan or deposit of money.
Q2. From whom loans and deposit can be accepted?
Though there is no such restriction under the IT Act, 1961 but restrictions have been imposed by the RBI for different persons. For companies also restrictions have been imposed under the Companies Act.
Q3. Who are exempted from section 269SS?
The following persons are exempted:
Government
Any Banking Company, Post office Savings Bank or Co-operative Bank,
Any Corporation established by a Central, State or Provincial Act,
And Government Company, as defined u/s 617 of Companies Act, 1956.
Other notified institutions, and
In a case, where the depositor and the acceptor, both are having agricultural income, and neither have any taxable income
Q4. How much loan or deposit of money can be accepted in cash?
Loan or deposit upto Rs 20,000/- can be accepted from one person as per provisions of section 269SS of the Income Tax Act, 1961. But care should be taken that the amount being taken now together with the earlier accumulated balance (including interest) should also not exceed Rs.20,000/ -.
Q5. What if loan is taken violating the above conditions of section 269SS of the Income Tax Act,1961 ?
Penalty equal to amount of loan or deposit accepted in cash may be imposed under section 271D of the Income Tax Act, 1961.
Q6. Where the assessee receives deposit of Rs.20,000/- or more as an agent, will the provisions of section 269SS apply?
If a person receives any deposit of Rs.20,000/- as an agent or servant and not on his own behalf, the provision of Sec 269SS does not apply (ACIT v Sahara Indai[2006] 100 ITD 93(Luck.)).
Q7. What if an assessee takes Rs 15,000/- each in cash from two persons and there is no earlier balance of these persons?
There is no violation of section 269SS of the Income Tax Act,1961 in such a case .
Q8. What if an assessee takes loan in cash from one person of Rs.15,000/- by cheque and Rs.15,000/- in cash?
If the asseesse takes the cash loan first and cheque say next day , then as on date of accepting the loan in cash it does not exceed Rs.20,000/- there is no violation of section 269SS of the Income Tax Act, 1961.
Q9. Can an assessee accept loan or deposit of money exceeding the limits laid down in section 269SS of the Income Tax Act, 1961 by book transfer entry or by bearer cheque or self cheque or any other mode other than account payee cheques?
No, the only mode prescribed in section 269SS of the Income Tax Act, 1961 is Account Payee Cheque or Account Payee Bank Draft.
Q10. If an assessee gives loan to a person exceeding Rs.20,000/- in cash or otherwise than account payee cheque, is the assessee violating the provisions of section 269SS of the Income Tax Act ,1961.?
No, the provisions of section 269SS is applicable to person accepting the loan or deposit of money. It does not affect the person giving the loan.
Q11. Where the assessee does not comply with the provisions 269SS can he be excused from penalty under section 271D?
Section 273B says if the assessee proves that there was reasonable cause for failure to comply with provisions of section 269SS , no penalty under section 271D is imposable.
Q12. When a cause can be said to reasonable cause?
According to Kalakrithi v. ITO [2002] 253 ITR 754 (Mad.) reasonable cause is:
The words “reasonable cause” in section 273B must necessarily have a relation to the failure on the part of the assessee to comply with the requirement of the law which he had failed to comply with. In case of delay in compliance, the cause shown must be for the whole of the period of the delay and not merely for a part thereof. If the cause shown is such as to explain the delay as a whole and constitutes a good reason for the non-compliance, no penalty would be leviable. However, in cases where the cause shown is such as to explain a part of the delay, or the cause shown is only to mitigate the gravity of the non-compliance, such a cause cannot be extrapolated and treated as being a good cause for the whole of the period of the delay in its entirety. All or nothing, the proposition canvassed by the petitioner would be detrimental to assessees themselves if the choice placed before the Commissioner in all cases were to be that he should set aside all penalties the moment he finds that there is a cause, though not fully satisfactory, but which may be accepted in part which may justify a grant of a partial relief. If the commissioner were to be compelled to grant relief in whole even where the cause shown is not such as to explain in full the delay or the gravity of the non-compliance, the Commissioner would be compelled to reject and deny all relief. A construction which would preserve the exercise of the power in favour of the assessee in circumstances which warrant it is to be preferred to a construction which would result in the likelihood of denial of relief
According to Azadi Bachao Andolan v. Union of India [2001] 252 ITR 471 (Delhi) reasonable cause is:
Reasonable cause as applied to human action, is that which would constrain a person of average intelligence and ordinary prudence. The expression ‘reasonable’ is not susceptible of a clear and precise definition; for an attempt to give a specific meaning to the word ‘reasonable’ is trying to count what is not number and measure what is not space. It can be described as rational according to the dictates of reason and is not excessive or immoderate. The word ‘reasonable’ has in law the prima facie meaning of reasonable with regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know. Reasonable cause can be reasonably said to be a cause which prevents a man of ordinary prudence and average intelligence, acting under normal circumstances, without negligence or inaction or want of bona fides
Q13. The assessee had accepted Loan exceeding Rs.20,000/- in cash and the Assessing Officer has initiated penalty proceedings .What is the remedy available with the assessee?
The assessee will have to move to the Assessing Officer with a prayer for dropping of Penalty proceedings. Depending on facts of the case the assessee will have to prove that there was reasonable cause for failure to comply with provisions of section 269SS. The assessee will need to furnish evidences in support of his contentions also. If the Assessing Officer is satisfied with the submission, he may drop the penalty proceedings.
Some of the circumstances under which judiciary has treated the cause as reasonable cause and cancelled the penalty imposed are as follows. The assessee will have to go through the full facts of the case to find out if facts of his case are similar, to rely upon the judgment as covered. If the facts are somewhat similar, the judgment may be relied upon for its persuasive effect.
13.1 Bonafide belief that the transaction would not violate section 269SS. And the transactions are proved to be genuine
Ratttan Singh Maan Singh v. CIT (1995) 127 Taxation 89 (Asr-Trib)
Harpal Singh Jaswant Singh V. ITO (1995) 126 Taxation 12 (Asr-Trib)
CIT Vs. Avet Chemicals (P) Ltd (2007) 288 ITR 310 (P&H)
ITO vs. Shri Babulal Singhvi (2000) 15 DTC 324 (Jodhpur Trib)
Choudhury Co Bhujiyawala v.ITO (2004) 89 TTJ (Jodhpur Trib) 357
CIT vs Saini Medical Store (2005) 276 ITR 79 (P & H )
3.2 Cash loan from agriculturists who were illiterate and were not having bank accounts.
ITO vs. Ganesh Wooden industries (2003) 174 Taxation 76 (Ahd-Trb)
13.3 Sale proceeds of agriculturists kept by Kaccha Arahtiya on bonafide belief that circular no 556 dt 25-2-1990 permits it .
ITO vs. Bharadiya Trading Company (2003) 85 ITD 42 (Pune-Trib)
13.4 Cash Loan taken on account of extreme exigencies and compulsions of the business. Genuiness of transacions not in doubt.
Mrs Rupali R. Desai v. Addl CIT (2004) 88 ITD 76 (Mum-Trib)
13.5 Cash deposits accepted under compelling circumstances .
ITO vs Akik Tiles (P) Ld (2005) 96 TTJ (Ahd-Trib) 670
13.6 No bank account of the depositor and ignorance of law and no advise from counsel
ITO vs. Prbhulal Sahu (2006) 99 TTJ 177 (Jd_trib)
13.7 Mere genuineness of transaction is not reasonable cause
Thenamal Chajjer v. Joint CIT (2005) 96 ITD 210 (Chennai Trib)
Kans Raj & Sons V ITO (2005) 92 TTJ (Asr Trib) 931
Q14. What is the remedy if the penalty is imposed by the Assessing Officer?
The assessee will have to file an appeal before CIT(A) against the order of penalty by the Assessing Officer. The appeal is to filed within 30 days of the receipt of the order.
Q15. Whether reasonable cause is to be stated before AO or it is to be proved?
Mere statement about reasonable cause is not sufficient. You must prove the facts stated before AO while pleading existence of reasonable cause. Existence of reasonable cause is to be proved.
15.1 Penalty is inevitable if reasonable cause not established
ACIT vs Jabalpur Hospital & Research Centre (p) Ltd (2006) 103 TTJ (jab Trib) 536
15.2 Necessity for the purpose of businseness not proved and loan not recorded in books.Penalty leviable.
Thennamal Chajjer Vs. JCIT (2005) 96 ITD 210 (chen –trib)
Q16. Where peak balance of deposits is added as income, whether penalty for accepting deposits in cash can be levied?
In Rajesh Paradasani v ITO ( ITA No. 125/Ind/2004) it was held that in such case penalty u/s 271D can not be imposed.
Q17. Whether Share application money attracts provisions of section 269SS?
In Balotia Engineering Works (P) Ltd v CIT (2005) 6 (I) ITCL 418 (Jhar HC) it was held that section 269SS is applicable to Share Application money also.
Q18. Whether acknowledgment of debt by passing journal entry violates section 269SS?
In Sunflower Builder (P) Ltd vs CIT (1997) 61 ITD 227 (Pune Trib) it was held that acknowledgment of debt by contra entry does not violate section 269SS , because there is no loan or deposit of money.
Q19. In a case where the amount of deposit is treated as income by AO, whether penalty u/s 271D can be levied?
When the AO is saying that it is income, with the same breath he can not say that is loan . So no penalty u/s 271D can be levied in such cases.
Diwan Enterprises Vs CIT (2000) 246ITR 571(Del) , ACIT vs. M.L.Vijay (2000) 16 DTC 542 (Jb-Trib) , ITO vs Sunil M Kashliwal (2003) 80 TTJ (Pune Trib) (TM)
Q20. Whether partner can contribute to the firm otherwise than by cheque?
The amount deposited by partner to the firm as Capital Contribution is not Loan or deposit of money. As such section 269SS is not applicable.
Q21. Whether accepting deposits by transfer voucher of bank violates section 269SS?
In ACIT vs Jag Vijay Auto Finance (P) Ltd (2000) 68 TTJ (jb Tib) 44 it was held that deposits by transfer voucher of bank is not violation of section 269SS .
Q1. What is the definition of the words Loans or Deposit?
As per the explanation in section 269SS loan or deposit mean loan or deposit of money.
Q2. From whom loans and deposit can be accepted?
Though there is no such restriction under the IT Act, 1961 but restrictions have been imposed by the RBI for different persons. For companies also restrictions have been imposed under the Companies Act.
Q3. Who are exempted from section 269SS?
The following persons are exempted:
Government
Any Banking Company, Post office Savings Bank or Co-operative Bank,
Any Corporation established by a Central, State or Provincial Act,
And Government Company, as defined u/s 617 of Companies Act, 1956.
Other notified institutions, and
In a case, where the depositor and the acceptor, both are having agricultural income, and neither have any taxable income
Q4. How much loan or deposit of money can be accepted in cash?
Loan or deposit upto Rs 20,000/- can be accepted from one person as per provisions of section 269SS of the Income Tax Act, 1961. But care should be taken that the amount being taken now together with the earlier accumulated balance (including interest) should also not exceed Rs.20,000/ -.
Q5. What if loan is taken violating the above conditions of section 269SS of the Income Tax Act,1961 ?
Penalty equal to amount of loan or deposit accepted in cash may be imposed under section 271D of the Income Tax Act, 1961.
Q6. Where the assessee receives deposit of Rs.20,000/- or more as an agent, will the provisions of section 269SS apply?
If a person receives any deposit of Rs.20,000/- as an agent or servant and not on his own behalf, the provision of Sec 269SS does not apply (ACIT v Sahara Indai[2006] 100 ITD 93(Luck.)).
Q7. What if an assessee takes Rs 15,000/- each in cash from two persons and there is no earlier balance of these persons?
There is no violation of section 269SS of the Income Tax Act,1961 in such a case .
Q8. What if an assessee takes loan in cash from one person of Rs.15,000/- by cheque and Rs.15,000/- in cash?
If the asseesse takes the cash loan first and cheque say next day , then as on date of accepting the loan in cash it does not exceed Rs.20,000/- there is no violation of section 269SS of the Income Tax Act, 1961.
Q9. Can an assessee accept loan or deposit of money exceeding the limits laid down in section 269SS of the Income Tax Act, 1961 by book transfer entry or by bearer cheque or self cheque or any other mode other than account payee cheques?
No, the only mode prescribed in section 269SS of the Income Tax Act, 1961 is Account Payee Cheque or Account Payee Bank Draft.
Q10. If an assessee gives loan to a person exceeding Rs.20,000/- in cash or otherwise than account payee cheque, is the assessee violating the provisions of section 269SS of the Income Tax Act ,1961.?
No, the provisions of section 269SS is applicable to person accepting the loan or deposit of money. It does not affect the person giving the loan.
Q11. Where the assessee does not comply with the provisions 269SS can he be excused from penalty under section 271D?
Section 273B says if the assessee proves that there was reasonable cause for failure to comply with provisions of section 269SS , no penalty under section 271D is imposable.
Q12. When a cause can be said to reasonable cause?
According to Kalakrithi v. ITO [2002] 253 ITR 754 (Mad.) reasonable cause is:
The words “reasonable cause” in section 273B must necessarily have a relation to the failure on the part of the assessee to comply with the requirement of the law which he had failed to comply with. In case of delay in compliance, the cause shown must be for the whole of the period of the delay and not merely for a part thereof. If the cause shown is such as to explain the delay as a whole and constitutes a good reason for the non-compliance, no penalty would be leviable. However, in cases where the cause shown is such as to explain a part of the delay, or the cause shown is only to mitigate the gravity of the non-compliance, such a cause cannot be extrapolated and treated as being a good cause for the whole of the period of the delay in its entirety. All or nothing, the proposition canvassed by the petitioner would be detrimental to assessees themselves if the choice placed before the Commissioner in all cases were to be that he should set aside all penalties the moment he finds that there is a cause, though not fully satisfactory, but which may be accepted in part which may justify a grant of a partial relief. If the commissioner were to be compelled to grant relief in whole even where the cause shown is not such as to explain in full the delay or the gravity of the non-compliance, the Commissioner would be compelled to reject and deny all relief. A construction which would preserve the exercise of the power in favour of the assessee in circumstances which warrant it is to be preferred to a construction which would result in the likelihood of denial of relief
According to Azadi Bachao Andolan v. Union of India [2001] 252 ITR 471 (Delhi) reasonable cause is:
Reasonable cause as applied to human action, is that which would constrain a person of average intelligence and ordinary prudence. The expression ‘reasonable’ is not susceptible of a clear and precise definition; for an attempt to give a specific meaning to the word ‘reasonable’ is trying to count what is not number and measure what is not space. It can be described as rational according to the dictates of reason and is not excessive or immoderate. The word ‘reasonable’ has in law the prima facie meaning of reasonable with regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know. Reasonable cause can be reasonably said to be a cause which prevents a man of ordinary prudence and average intelligence, acting under normal circumstances, without negligence or inaction or want of bona fides
Q13. The assessee had accepted Loan exceeding Rs.20,000/- in cash and the Assessing Officer has initiated penalty proceedings .What is the remedy available with the assessee?
The assessee will have to move to the Assessing Officer with a prayer for dropping of Penalty proceedings. Depending on facts of the case the assessee will have to prove that there was reasonable cause for failure to comply with provisions of section 269SS. The assessee will need to furnish evidences in support of his contentions also. If the Assessing Officer is satisfied with the submission, he may drop the penalty proceedings.
Some of the circumstances under which judiciary has treated the cause as reasonable cause and cancelled the penalty imposed are as follows. The assessee will have to go through the full facts of the case to find out if facts of his case are similar, to rely upon the judgment as covered. If the facts are somewhat similar, the judgment may be relied upon for its persuasive effect.
13.1 Bonafide belief that the transaction would not violate section 269SS. And the transactions are proved to be genuine
Ratttan Singh Maan Singh v. CIT (1995) 127 Taxation 89 (Asr-Trib)
Harpal Singh Jaswant Singh V. ITO (1995) 126 Taxation 12 (Asr-Trib)
CIT Vs. Avet Chemicals (P) Ltd (2007) 288 ITR 310 (P&H)
ITO vs. Shri Babulal Singhvi (2000) 15 DTC 324 (Jodhpur Trib)
Choudhury Co Bhujiyawala v.ITO (2004) 89 TTJ (Jodhpur Trib) 357
CIT vs Saini Medical Store (2005) 276 ITR 79 (P & H )
3.2 Cash loan from agriculturists who were illiterate and were not having bank accounts.
ITO vs. Ganesh Wooden industries (2003) 174 Taxation 76 (Ahd-Trb)
13.3 Sale proceeds of agriculturists kept by Kaccha Arahtiya on bonafide belief that circular no 556 dt 25-2-1990 permits it .
ITO vs. Bharadiya Trading Company (2003) 85 ITD 42 (Pune-Trib)
13.4 Cash Loan taken on account of extreme exigencies and compulsions of the business. Genuiness of transacions not in doubt.
Mrs Rupali R. Desai v. Addl CIT (2004) 88 ITD 76 (Mum-Trib)
13.5 Cash deposits accepted under compelling circumstances .
ITO vs Akik Tiles (P) Ld (2005) 96 TTJ (Ahd-Trib) 670
13.6 No bank account of the depositor and ignorance of law and no advise from counsel
ITO vs. Prbhulal Sahu (2006) 99 TTJ 177 (Jd_trib)
13.7 Mere genuineness of transaction is not reasonable cause
Thenamal Chajjer v. Joint CIT (2005) 96 ITD 210 (Chennai Trib)
Kans Raj & Sons V ITO (2005) 92 TTJ (Asr Trib) 931
Q14. What is the remedy if the penalty is imposed by the Assessing Officer?
The assessee will have to file an appeal before CIT(A) against the order of penalty by the Assessing Officer. The appeal is to filed within 30 days of the receipt of the order.
Q15. Whether reasonable cause is to be stated before AO or it is to be proved?
Mere statement about reasonable cause is not sufficient. You must prove the facts stated before AO while pleading existence of reasonable cause. Existence of reasonable cause is to be proved.
15.1 Penalty is inevitable if reasonable cause not established
ACIT vs Jabalpur Hospital & Research Centre (p) Ltd (2006) 103 TTJ (jab Trib) 536
15.2 Necessity for the purpose of businseness not proved and loan not recorded in books.Penalty leviable.
Thennamal Chajjer Vs. JCIT (2005) 96 ITD 210 (chen –trib)
Q16. Where peak balance of deposits is added as income, whether penalty for accepting deposits in cash can be levied?
In Rajesh Paradasani v ITO ( ITA No. 125/Ind/2004) it was held that in such case penalty u/s 271D can not be imposed.
Q17. Whether Share application money attracts provisions of section 269SS?
In Balotia Engineering Works (P) Ltd v CIT (2005) 6 (I) ITCL 418 (Jhar HC) it was held that section 269SS is applicable to Share Application money also.
Q18. Whether acknowledgment of debt by passing journal entry violates section 269SS?
In Sunflower Builder (P) Ltd vs CIT (1997) 61 ITD 227 (Pune Trib) it was held that acknowledgment of debt by contra entry does not violate section 269SS , because there is no loan or deposit of money.
Q19. In a case where the amount of deposit is treated as income by AO, whether penalty u/s 271D can be levied?
When the AO is saying that it is income, with the same breath he can not say that is loan . So no penalty u/s 271D can be levied in such cases.
Diwan Enterprises Vs CIT (2000) 246ITR 571(Del) , ACIT vs. M.L.Vijay (2000) 16 DTC 542 (Jb-Trib) , ITO vs Sunil M Kashliwal (2003) 80 TTJ (Pune Trib) (TM)
Q20. Whether partner can contribute to the firm otherwise than by cheque?
The amount deposited by partner to the firm as Capital Contribution is not Loan or deposit of money. As such section 269SS is not applicable.
Q21. Whether accepting deposits by transfer voucher of bank violates section 269SS?
In ACIT vs Jag Vijay Auto Finance (P) Ltd (2000) 68 TTJ (jb Tib) 44 it was held that deposits by transfer voucher of bank is not violation of section 269SS .
Important Sections of Companies Act 1956
Some Important Sections Related with Audit
224. Appointment and remuneration of auditor.
224A Auditor not to be appointed except with the approval of the company by special resolution in certain cases.
225 Provisions as to resolutions for appointing or removing auditors
226. Qualifications and disqualifications of auditors
227. Powers and duties of auditors
228. Audit of accounts of branch office of company
229. Signature of audit report, etc.
230. Reading and inspection of auditor’s report
231. Right of auditor to attend general meeting
232. Penalty for non-compliance with sections 225 to 231
233. Penalty for non-compliance by auditor with sections 227 and 229
233A. Power of Central Government to direct special audit in certain cases
233B. Audit of cost accounts in certain cases
SECTION 226: - Qualification and Disqualification of Auditor
226 (1)
· Chartered Accountant with in the meaning of the Chartered Accountants Act, 1949
· a firm whereof all the partners practicing in India are qualified for appointment, as aforesaid, may be appointed by its firm name to be the auditors of a company in which case any partner so practicing may act in the name of the firm
226 (2)
· Not being in force
226 (3)
Disqualification of auditor
· a body corporate;
· an officer or an employee of the company;
· a person who is a partner, or who is in the employment of an officer or employee of the company;
· a person who is indebted to the company for more than Rs. 1,000 or who has given any guarantee or provided any security in connection with the indebtedness of any third person to the company for more than Rs. 1000; and
· a person holding any security of that company.
226 (4)
· disqualified from acting as auditor of that company’s subsidiary or holding company or of any other subsidiary of the same holding company
226 (5)
· When the auditor appointed but later on he fails the requirement of sub section 3-4 then he will be automatically vacated.
SEC. 314 – A C.A is not disqualified if his relative or his employee works as a director, secretary or any other person. But the permission of CG is must
Sec. 224: - Appointment of Auditor
224 A
Cases when the auditor appointed by SPECIAL RESOLUTION
· A company in which 25% of the SUBSCRIBED CAPITAL
o A public financial institution (NABARD, ICICI, AVIC, HUDKO) or a government or the CG or any SG, or
o A financial or any other institution established by provincial or State Act in which a SG, holds not less than 51% SUBSCRIBED CAPITAL
o A nationalized bank or an GENERAL INSURANCE COMPANY
o Any combination of these.
· IN case of pass ordinary resolution than the appointment of auditor done by CG u/s 224 (3)
· 25% capital is considered as the Closing date of the register of members
224 (1)
Appointment by Shareholders
224 (1A)
Intimation of auditor to join the job or not in the form 23B
224 (1B)
Ceiling limit of the auditors
· Total 30 co. audits but not more than 20 public co. in which 10 co. does not have the share capital more than Rs. 25 Lakh.
224 (2)
No notice of the intended resolution to appoint some other person or persons in place of the retiring auditor was received by the company that could not be proceeded with due to death, incapacity or disqualification of the other person or persons.
224 (3)
Appointment by C.G
· In that case if auditor not appointed in A.G.M
· In that case when the co. passes the ordinary resolution whether he pass the special resolution u/s 224 A.
· Penalty is 5,000 rs. In case of default.
224 (5)
Appointment of First auditor
It can be appointed by the Board of directors within one month of the date of registration.
If fails to appoint it can be appointed in GENERAL MEETING*
first auditor doesn’t need to intimate.
224 (6)
Appointment in case of casual vacancy*
Other than resignation all the cause the appointment done by the BOARD OF DIRECTORS
In case of resignation the auditor appointed in GENERAL MEETING*.
SECTION. 619: - Auditor
224. Appointment and remuneration of auditor.
224A Auditor not to be appointed except with the approval of the company by special resolution in certain cases.
225 Provisions as to resolutions for appointing or removing auditors
226. Qualifications and disqualifications of auditors
227. Powers and duties of auditors
228. Audit of accounts of branch office of company
229. Signature of audit report, etc.
230. Reading and inspection of auditor’s report
231. Right of auditor to attend general meeting
232. Penalty for non-compliance with sections 225 to 231
233. Penalty for non-compliance by auditor with sections 227 and 229
233A. Power of Central Government to direct special audit in certain cases
233B. Audit of cost accounts in certain cases
SECTION 226: - Qualification and Disqualification of Auditor
226 (1)
· Chartered Accountant with in the meaning of the Chartered Accountants Act, 1949
· a firm whereof all the partners practicing in India are qualified for appointment, as aforesaid, may be appointed by its firm name to be the auditors of a company in which case any partner so practicing may act in the name of the firm
226 (2)
· Not being in force
226 (3)
Disqualification of auditor
· a body corporate;
· an officer or an employee of the company;
· a person who is a partner, or who is in the employment of an officer or employee of the company;
· a person who is indebted to the company for more than Rs. 1,000 or who has given any guarantee or provided any security in connection with the indebtedness of any third person to the company for more than Rs. 1000; and
· a person holding any security of that company.
226 (4)
· disqualified from acting as auditor of that company’s subsidiary or holding company or of any other subsidiary of the same holding company
226 (5)
· When the auditor appointed but later on he fails the requirement of sub section 3-4 then he will be automatically vacated.
SEC. 314 – A C.A is not disqualified if his relative or his employee works as a director, secretary or any other person. But the permission of CG is must
Sec. 224: - Appointment of Auditor
224 A
Cases when the auditor appointed by SPECIAL RESOLUTION
· A company in which 25% of the SUBSCRIBED CAPITAL
o A public financial institution (NABARD, ICICI, AVIC, HUDKO) or a government or the CG or any SG, or
o A financial or any other institution established by provincial or State Act in which a SG, holds not less than 51% SUBSCRIBED CAPITAL
o A nationalized bank or an GENERAL INSURANCE COMPANY
o Any combination of these.
· IN case of pass ordinary resolution than the appointment of auditor done by CG u/s 224 (3)
· 25% capital is considered as the Closing date of the register of members
224 (1)
Appointment by Shareholders
224 (1A)
Intimation of auditor to join the job or not in the form 23B
224 (1B)
Ceiling limit of the auditors
· Total 30 co. audits but not more than 20 public co. in which 10 co. does not have the share capital more than Rs. 25 Lakh.
224 (2)
No notice of the intended resolution to appoint some other person or persons in place of the retiring auditor was received by the company that could not be proceeded with due to death, incapacity or disqualification of the other person or persons.
224 (3)
Appointment by C.G
· In that case if auditor not appointed in A.G.M
· In that case when the co. passes the ordinary resolution whether he pass the special resolution u/s 224 A.
· Penalty is 5,000 rs. In case of default.
224 (5)
Appointment of First auditor
It can be appointed by the Board of directors within one month of the date of registration.
If fails to appoint it can be appointed in GENERAL MEETING*
first auditor doesn’t need to intimate.
224 (6)
Appointment in case of casual vacancy*
Other than resignation all the cause the appointment done by the BOARD OF DIRECTORS
In case of resignation the auditor appointed in GENERAL MEETING*.
SECTION. 619: - Auditor
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