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2017 (8) TMI 1022 - DELHI HIGH COURTLiability to pay audit fees - what should happen if a registered dealer who is required to make payment for the fees of the special audit defaults in making payment? Does the liability get transferred to the DT&T? - Held that: - by virtue of a proviso to Section 142 (2D) of the Income Tax Act, 1961 inserted with effect from 1st June, 2007, in the event of a default by an Assessee in making the payment of fees to the CA for the special audit “the expenses so determined shall be paid by the Central Government - In the present case the determination of the fees payable was communicated by the Commissioner to the Petitioner on 3rd June, 2014, i.e., after the amendment came into effect. This was pursuant to the order passed by this Court on 5th May, 2014 in the earlier writ petitions. While the DT&T is right that at the time when the special audit took placed Section 58A (4) of the DVAT Act had not been amended, the fact remains that the fees payable to the Petitioner was determined after the amendment came into force. It is precisely for dealing with a situation where a professional chartered accountant may be left high and dry by a defaulting dealer whose accounts have been specially audited, that Section 58A (4) of the DVAT Act was amended. The Court sees no reason why the benefit of this amendment should not be extended to the Petitioner considering that the fees payable to the Petitioner has been fixed by the of 11 Commissioner only after the amendment came into effect - Nevertheless the Court is also of the view that the power of the Commissioner in these cases to recover from the defaulting dealer the amount paid to the Petitioner should be kept reserved. For the purposes of such recovery, the amount due from the defaulting dealers would be treated as being due in terms of Section 30 of the DVAT Act, particularly since Section 58A (4) of the DVAT Act as it stood prior to 18th June 2012 permitted such recovery. The DT&T will pay the Petitioner of the outstanding fees as determined in terms of the rates fixed by the Commissioner VAT - petition allowed - decided in favor of petitioner.
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