Inordinate delay in fixing the fees for special audit to be made good with payment of interest, HC directs

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For inordinate delay in fixation of fee, departmental auditor should be appropriately restituted by way of interest

In the instant case the Income Tax Authority (‘ITA’) had engaged petitioner-Chartered Accountant (CA) to conduct special audit under section 142(2A). The CA completed the audit and submitted his report along with bills but the ITA delayed the disbursement of fee after fully availing of his services
The High Court held as under:
1) There had been an inordinate delay in fixation of the CA’s fee. The CA’s services were availed more than 6 years ago and the final report of his special audit was received. The assessment proceedings in respect of the special audit too had been completed;
2) There was no reason why the department delayed the disbursement of petitioner’s fee after fully availing of his services. To add insult to injury, the petitioner had to approach the Court to get what it claimed to be wrong fixation of fee;
3) As regards the delay, the respondent should pay interest at the rate of 8 per cent p.a. The Chief Commissioner was to be directed to conduct an inquiry and fix responsibility of the person(s) who was responsible for the delay and the said costs should be deducted from the salary of the concerned person(s). The action taken report regarding the compliances of the directions issued should be filled within eight weeks – SC & Associates, Chartered Accountants V. Union of India (2013) 36 taxmann.com 114 (Delhi)
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