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2017 (3) TMI 732 - HC - Income TaxDetermination of fee payable to Chartered Accountant (CA) for special audit assigned to him u/s 142 - Calculation of time billed for professional work - Held that:- Spending 9 to 10 hours a day for a special audit would include the time spent on basic necessities, food and refreshments etc. Unlike employees, professionals do spend 9 to 10 hours a day on their work, even at odd hours, and attend to their basic necessities in the remaining hours of the day. Exclusion of such necessary recess for consumption of food and refreshment, etc. for a person to render quality work is illogical. In any case, the billing is not for 24 hours a day but for a part thereof. Therefore, to assume that the time billed was not exclusively for the professional work is without basis and untenable. Chartered Accountants are not automatons who, without having access to food or being able to attend to all other necessities, would churn out good quality reports after analysing voluminous records. Notably, the work experience of the partners ranges from 3 to 27 years while the range permissible billing rate is between ₹ 3,500/- to ₹ 7,500/- and the rate of sitting could have been correspondingly adjusted as per their regular sitting hours or accepted degree of competence; instead it has arbitrarily been reduced to an average rate of ₹ 4,000/- per hour. The disallowance of certain hours based on the assumption that the auditors would have spent some time on lunches, refreshments etc. is erroneous. If such disallowance is permitted then the corollary argument would be that some members of the audit team or the entire team was not adequately focussed on the special audit. This kind of reasoning assumes thought-control or thought-intensity monitoring. Such nature of control is neither envisaged under the Rules nor is it reasonable. What the Revenue is to assess in such circumstances is whether the special audit report was (i) within time, (ii) of the desired quality (iii) the billing is commensurate to the nature of inquiry and the quantum of the records to be looked into; etc. If the audit report is of good quality and inter alia, authored by a qualified professional having a fair number of years of experience then he/she may well be entitled to ask for the highest prescribed billing rate.In the circumstances, the Court is of the view that the bill submitted by the petitioner needs a fresh look.
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