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 CHAPTER X

 

 
AUDIT AND AUDITORS

 
 
139. Appointment of auditors.
 
(1) Subject to the provisions of this Chapter, every company shall, at the first
annual general meeting, appoint an individual or a firm as an auditor who shall hold office
from the conclusion of that meeting till the conclusion of its sixth annual general meeting and
thereafter till the conclusion of every sixth meeting and the manner and procedure of selection
of auditors by the members of the company at such meeting shall be such as may be prescribed:
Provided that the company shall place the matter relating to such appointment for
ratification by members at every annual general meeting:
Provided further that before such appointment is made, the written consent of the
auditor to such appointment, and a certificate from him or it that the appointment, if made,
shall be in accordance with the conditions as may be prescribed, shall be obtained from the
auditor:
Provided also that the certificate shall also indicate whether the auditor satisfies the
criteria provided in section 141:
Provided also that the company shall inform the auditor concerned of his or its
appointment, and also file a notice of such appointment with the Registrar within fifteen days
of the meeting in which the auditor is appointed.
Explanation.—For the purposes of this Chapter, “appointment” includes reappointment.
(2) No listed company or a company belonging to such class or classes of companies
as may be prescribed, shall appoint or re-appoint—
(a) an individual as auditor for more than one term of five consecutive years;
and
(b) an audit firm as auditor for more than two terms of five consecutive years:
Provided that—
(i) an individual auditor who has completed his term under clause (a) shall
not be eligible for re-appointment as auditor in the same company for five years
from the completion of his term;
(ii) an audit firm which has completed its term under clause (b), shall not
be eligible for re-appointment as auditor in the same company for five years from
the completion of such term:
Provided further that as on the date of appointment no audit firm having a common
partner or partners to the other audit firm, whose tenure has expired in a company immediately
preceding the financial year, shall be appointed as auditor of the same company for a period
of five years:
Provided also that every company, existing on or before the commencement of this Act
which is required to comply with provisions of this sub-section, shall comply with the
requirements of this sub-section within three years from the date of commencement of this Act:
Provided also that, nothing contained in this sub-section shall prejudice the right of
the company to remove an auditor or the right of the auditor to resign from such office of the
company.
(3) Subject to the provisions of this Act, members of a company may resolve to
provide that—
(a) in the audit firm appointed by it, the auditing partner and his team shall be
rotated at such intervals as may be resolved by members; or
(b) the audit shall be conducted by more than one auditor.
(4) The Central Government may, by rules, prescribe the manner in which the companies
shall rotate their auditors in pursuance of sub-section (2).
 
Explanation.—For the purposes of this Chapter, the word “firm” shall include a limited
liability partnership incorporated under the Limited Liability Partnership Act, 2008.
(5) Notwithstanding anything contained in sub-section (1), in the case of a Government
company or any other company owned or controlled, directly or indirectly, by the Central
Government, or by any State Government or Governments, or partly by the Central Government
and partly by one or more State Governments, the Comptroller and Auditor-General of India
shall, in respect of a financial year, appoint an auditor duly qualified to be appointed as an
auditor of companies under this Act, within a period of one hundred and eighty days from
the commencement of the financial year, who shall hold office till the conclusion of the
annual general meeting.
(6) Notwithstanding anything contained in sub-section (1), the first auditor of a
company, other than a Government company, shall be appointed by the Board of Directors
within thirty days from the date of registration of the company and in the case of failure of the
Board to appoint such auditor, it shall inform the members of the company, who shall within
ninety days at an extraordinary general meeting appoint such auditor and such auditor shall
hold office till the conclusion of the first annual general meeting.
(7) Notwithstanding anything contained in sub-section (1) or sub-section (5), in the
case of a Government company or any other company owned or controlled, directly or
indirectly, by the Central Government, or by any State Government, or Governments, or
partly by the Central Government and partly by one or more State Governments, the first
auditor shall be appointed by the Comptroller and Auditor-General of India within sixty days
from the date of registration of the company and in case the Comptroller and Auditor-General
of India does not appoint such auditor within the said period, the Board of Directors of the
company shall appoint such auditor within the next thirty days; and in the case of failure of
the Board to appoint such auditor within the next thirty days, it shall inform the members of
the company who shall appoint such auditor within the sixty days at an extraordinary general
meeting, who shall hold office till the conclusion of the first annual general meeting.
(8) Any casual vacancy in the office of an auditor shall—
(i) in the case of a company other than a company whose accounts are subject to
audit by an auditor appointed by the Comptroller and Auditor-General of India, be filled
by the Board of Directors within thirty days, but if such casual vacancy is as a result of
the resignation of an auditor, such appointment shall also be approved by the company
at a general meeting convened within three months of the recommendation of the Board
and he shall hold the office till the conclusion of the next annual general meeting;
(ii) in the case of a company whose accounts are subject to audit by an auditor
appointed by the Comptroller and Auditor-General of India, be filled by the Comptroller
and Auditor-General of India within thirty days:
Provided that in case the Comptroller and Auditor-General of India does not fill
the vacancy within the said period, the Board of Directors shall fill the vacancy within
next thirty days.
(9) Subject to the provisions of sub-section (1) and the rules made thereunder, a
retiring auditor may be re-appointed at an annual general meeting, if—
(a) he is not disqualified for re-appointment;
(b) he has not given the company a notice in writing of his unwillingness to be
re-appointed; and
(c) a special resolution has not been passed at that meeting appointing some
other auditor or providing expressly that he shall not be re-appointed.
(10) Where at any annual general meeting, no auditor is appointed or re-appointed, the
existing auditor shall continue to be the auditor of the company.
(11) Where a company is required to constitute an Audit Committee under section 177,
all appointments, including the filling of a casual vacancy of an auditor under this section
shall be made after taking into account the recommendations of such committee.
 
 
 
140.Removal, resignation of auditor and giving of special notice.
 
(1) The auditor appointed under section 139 may be removed from his office
before the expiry of his term only by a special resolution of the company, after obtaining the
previous approval of the Central Government in that behalf in the prescribed manner:
Provided that before taking any action under this sub-section, the auditor concerned
shall be given a reasonable opportunity of being heard.
(2) The auditor who has resigned from the company shall file within a period of thirty
days from the date of resignation, a statement in the prescribed form with the company and
the Registrar, and in case of companies referred to in sub-section (5) of section 139,
the auditor shall also file such statement with the Comptroller and Auditor-General
of India, indicating the reasons and other facts as may be relevant with regard to his
resignation.
(3) If the auditor does not comply with sub-section (2), he or it shall be punishable with
fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.
(4) (i) Special notice shall be required for a resolution at an annual general meeting
appointing as auditor a person other than a retiring auditor, or providing expressly that a
retiring auditor shall not be re-appointed, except where the retiring auditor has completed a
consecutive tenure of five years or, as the case may be, ten years, as provided under
sub-section (2) of section 139.
(ii) On receipt of notice of such a resolution, the company shall forthwith send a copy
thereof to the retiring auditor.
(iii) Where notice is given of such a resolution and the retiring auditor makes with
respect thereto representation in writing to the company (not exceeding a reasonable length)
and requests its notification to members of the company, the company shall, unless the
representation is received by it too late for it to do so,—
(a) in any notice of the resolution given to members of the company, state the
fact of the representation having been made; and
(b) send a copy of the representation to every member of the company to whom
notice of the meeting is sent, whether before or after the receipt of the representation
by the company,
and if a copy of the representation is not sent as aforesaid because it was received too late
or because of the company’s default, the auditor may (without prejudice to his right to be
heard orally) require that the representation shall be read out at the meeting:
Provided that if a copy of representation is not sent as aforesaid, a copy thereof shall
be filed with the Registrar:
Provided further that if the Tribunal is satisfied on an application either of the company
or of any other aggrieved person that the rights conferred by this sub-section are being
abused by the auditor, then, the copy of the representation may not be sent and the
representation need not be read out at the meeting.
(5) Without prejudice to any action under the provisions of this Act or any other law
for the time being in force, the Tribunal either suo motu or on an application made to it by the
Central Government or by any person concerned, if it is satisfied that the auditor of a
company has, whether directly or indirectly, acted in a fraudulent manner or abetted or
colluded in any fraud by, or in relation to, the company or its directors or officers, it may, by
order, direct the company to change its auditors:
Provided that if the application is made by the Central Government and the Tribunal is
satisfied that any change of the auditor is required, it shall within fifteen days of receipt of
such application, make an order that he shall not function as an auditor and the Central
Government may appoint another auditor in his place:
Provided further that an auditor, whether individual or firm, against whom final order
has been passed by the Tribunal under this section shall not be eligible to be appointed as
an auditor of any company for a period of five years from the date of passing of the order and
the auditor shall also be liable for action under section 447.
Explanation I.—It is hereby clarified that the case of a firm, the liability shall be of the
firm and that of every partner or partners who acted in a fraudulent manner or abetted or
colluded in any fraud by, or in relation to, the company or its director or officers.
Explanation II.—For the purposes of this Chapter the word “auditor” includes a firm
of auditors.
 
 
 
141.Remuneration of auditors.
 
(1) A person shall be eligible for appointment as an auditor of a company only if
he is a chartered accountant:
Provided that a firm whereof majority of partners practising in India are qualified for
appointment as aforesaid may be appointed by its firm name to be auditor of a company.
(2) Where a firm including a limited liability partnership is appointed as an auditor of a
company, only the partners who are chartered accountants shall be authorised to act and
sign on behalf of the firm.
(3) The following persons shall not be eligible for appointment as an auditor of a
company, namely:—
(a) a body corporate other than a limited liability partnership registered under
the Limited Liability Partnership Act, 2008;
(b) an officer or employee of the company;
(c) a person who is a partner, or who is in the employment, of an officer or
employee of the company;
(d) a person who, or his relative or partner—
(i) is holding any security of or interest in the company or its subsidiary, or
of its holding or associate company or a subsidiary of such holding company:
Provided that the relative may hold security or interest in the company of
face value not exceeding one thousand rupees or such sum as may be prescribed;
(ii) is indebted to the company, or its subsidiary, or its holding or associate
company or a subsidiary of such holding company, in excess of such amount as
may be prescribed; or
(iii) has given a guarantee or provided any security in connection with the
indebtedness of any third person to the company, or its subsidiary, or its holding
or associate company or a subsidiary of such holding company, for such amount
as may be prescribed;
(e) a person or a firm who, whether directly or indirectly, has business relationship
with the company, or its subsidiary, or its holding or associate company or subsidiary
of such holding company or associate company of such nature as may be prescribed;
(f) a person whose relative is a director or is in the employment of the company
as a director or key managerial personnel;
(g) a person who is in full time employment elsewhere or a person or a partner of
a firm holding appointment as its auditor, if such persons or partner is at the date of
such appointment or reappointment holding appointment as auditor of more than
twenty companies;
(h) a person who has been convicted by a court of an offence involving fraud
and a period of ten years has not elapsed from the date of such conviction;
(i) any person whose subsidiary or associate company or any other form of
entity, is engaged as on the date of appointment in consulting and specialised services
as provided in section 144.
(4) Where a person appointed as an auditor of a company incurs any of the
disqualifications mentioned in sub-section (3) after his appointment, he shall vacate his
office as such auditor and such vacation shall be deemed to be a casual vacancy in the office
of the auditor.
 
 
 
142.Eligibility, qualifications and disqualifications of auditors.
 
(1) The remuneration of the auditor of a company shall be fixed in its general
meeting or in such manner as may be determined therein:
Provided that the Board may fix remuneration of the first auditor appointed by it.
(2) The remuneration under sub-section (1) shall, in addition to the fee payable to an
auditor, include the expenses, if any, incurred by the auditor in connection with the audit of
the company and any facility extended to him but does not include any remuneration paid to
him for any other service rendered by him at the request of the company.
 
 
 
143. Powers and duties of auditors and auditing standards.
 
(1) Every auditor of a company shall have a right of access at all times to the
books of account and vouchers of the company, whether kept at the registered office of the
company or at any other place and shall be entitled to require from the officers of the
company such information and explanation as he may consider necessary for the performance
of his duties as auditor and amongst other matters inquire into the following matters, namely:—
(a) whether loans and advances made by the company on the basis of security
have been properly secured and whether the terms on which they have been made are
prejudicial to the interests of the company or its members;
(b) whether transactions of the company which are represented merely by book
entries are prejudicial to the interests of the company;
(c) where the company not being an investment company or a banking company,
whether so much of the assets of the company as consist of shares, debentures and
other securities have been sold at a price less than that at which they were purchased
by the company;
(d) whether loans and advances made by the company have been shown as
deposits;
(e) whether personal expenses have been charged to revenue account;
(f) where it is stated in the books and documents of the company that any shares
have been allotted for cash, whether cash has actually been received in respect of
such allotment, and if no cash has actually been so received, whether the position as
stated in the account books and the balance sheet is correct, regular and not misleading:
Provided that the auditor of a company which is a holding company shall also have
the right of access to the records of all its subsidiaries in so far as it relates to the consolidation
of its financial statements with that of its subsidiaries.
(2) The auditor shall make a report to the members of the company on the accounts
examined by him and on every financial statements which are required by or under this Act
to be laid before the company in general meeting and the report shall after taking into
account the provisions of this Act, the accounting and auditing standards and matters
which are required to be included in the audit report under the provisions of this Act or any
rules made thereunder or under any order made under sub-section (11) and to the best of his
information and knowledge, the said accounts, financial statements give a true and fair view
of the state of the company’s affairs as at the end of its financial year and profit or loss and
cash flow for the year and such other matters as may be prescribed.
(3) The auditor’s report shall also state—
(a) whether he has sought and obtained all the information and explanations
which to the best of his knowledge and belief were necessary for the purpose of his
audit and if not, the details thereof and the effect of such information on the financial
statements;
(b) whether, in his opinion, proper books of account as required by law have
been kept by the company so far as appears from his examination of those books and
proper returns adequate for the purposes of his audit have been received from branches
not visited by him;
(c) whether the report on the accounts of any branch office of the company
audited under sub-section (8) by a person other than the company’s auditor has been
sent to him under the proviso to that sub-section and the manner in which he has dealt
with it in preparing his report;
(d) whether the company’s balance sheet and profit and loss account dealt with
in the report are in agreement with the books of account and returns;
(e) whether, in his opinion, the financial statements comply with the accounting
standards;
(f) the observations or comments of the auditors on financial transactions or
matters which have any adverse effect on the functioning of the company;
(g) whether any director is disqualified from being appointed as a director under
sub-section (2) of section 164;
(h) any qualification, reservation or adverse remark relating to the maintenance
of accounts and other matters connected therewith;
(i) whether the company has adequate internal financial controls system in
place and the operating effectiveness of such controls;
(j) such other matters as may be prescribed.
(4) Where any of the matters required to be included in the audit report under this
section is answered in the negative or with a qualification, the report shall state the reasons
therefor.
(5) In the case of a Government company, the Comptroller and Auditor-General of India
shall appoint the auditor under sub-section (5) or sub-section (7) of section 139 and direct
such auditor the manner in which the accounts of the Government company are required to
be audited and thereupon the auditor so appointed shall submit a copy of the audit report to
the Comptroller and Auditor-General of India which, among other things, include the
directions, if any, issued by the Comptroller and Auditor-General of India, the action taken
thereon and its impact on the accounts and financial statement of the company.
(6) The Comptroller and Auditor-General of India shall within sixty days from the date
of receipt of the audit report under sub-section (5) have a right to,—
(a) conduct a supplementary audit of the financial statement of the company by
such person or persons as he may authorise in this behalf; and for the purposes of
such audit, require information or additional information to be furnished to any person
or persons, so authorised, on such matters, by such person or persons, and in such
form, as the Comptroller and Auditor-General of India may direct; and
(b) comment upon or supplement such audit report:
Provided that any comments given by the Comptroller and Auditor-General of
India upon, or supplement to, the audit report shall be sent by the company to every
person entitled to copies of audited financial statements under sub section (1) of
section 136 and also be placed before the annual general meeting of the company at
the same time and in the same manner as the audit report.
(7) Without prejudice to the provisions of this Chapter, the Comptroller and Auditor-
General of India may, in case of any company covered under sub-section (5) or sub-section
(7) of section 139, if he considers necessary, by an order, cause test audit to be conducted of
the accounts of such company and the provisions of section 19A of the Comptroller and
Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971, shall apply to the
report of such test audit.
(8) Where a company has a branch office, the accounts of that office shall be audited
either by the auditor appointed for the company (herein referred to as the company’s auditor)
under this Act or by any other person qualified for appointment as an auditor of the company
under this Act and appointed as such under section 139, or where the branch office is
situated in a country outside India, the accounts of the branch office shall be audited either
by the company’s auditor or by an accountant or by any other person duly qualified to act as
an auditor of the accounts of the branch office in accordance with the laws of that country
and the duties and powers of the company’s auditor with reference to the audit of the branch
and the branch auditor, if any, shall be such as may be prescribed:
Provided that the branch auditor shall prepare a report on the accounts of the branch
examined by him and send it to the auditor of the company who shall deal with it in his report
in such manner as he considers necessary.
(9) Every auditor shall comply with the auditing standards.
(10) The Central Government may prescribe the standards of auditing or any addendum
thereto, as recommended by the Institute of Chartered Accountants of India, constituted
under section 3 of the Chartered Accountants Act, 1949, in consultation with and after
examination of the recommendations made by the National Financial Reporting Authority:
Provided that until any auditing standards are notified, any standard or standards of
auditing specified by the Institute of Chartered Accountants of India shall be deemed to be
the auditing standards.
(11) The Central Government may, in consultation with the National Financial Reporting
Authority, by general or special order, direct, in respect of such class or description of
companies, as may be specified in the order, that the auditor’s report shall also include a
statement on such matters as may be specified therein.
(12) Notwithstanding anything contained in this section, if an auditor of a company, in
the course of the performance of his duties as auditor, has reason to believe that an offence
involving fraud is being or has been committed against the company by officers or employees
of the company, he shall immediately report the matter to the Central Government within such
time and in such manner as may be prescribed.
(13) No duty to which an auditor of a company may be subject to shall be regarded as
having been contravened by reason of his reporting the matter referred to in sub-section (12)
if it is done in good faith.
(14) The provisions of this section shall mutatis mutandis apply to—
(a) the cost accountant in practice conducting cost audit under section 148; or
(b) the company secretary in practice conducting secretarial audit under
section 204.
(15) If any auditor, cost accountant or company secretary in practice do not comply
with the provisions of sub-section (12), he shall be punishable with fine which shall not be
less than one lakh rupees but which may extend to twenty-five lakh rupees.
 
 
 
144.Auditor not to render certain services.
 
An auditor appointed under this Act shall provide to the company only such
other services as are approved by the Board of Directors or the audit committee, as the case
may be, but which shall not include any of the following services (whether such services are
rendered directly or indirectly to the company or its holding company or subsidiary company,
namely:—
(a) accounting and book keeping services;
(b) internal audit;
(c) design and implementation of any financial information system;
(d) actuarial services;
(e) investment advisory services;
(f) investment banking services;
(g) rendering of outsourced financial services;
(h) management services; and
(i) any other kind of services as may be prescribed:
Provided that an auditor or audit firm who or which has been performing any non-audit
services on or before the commencement of this Act shall comply with the provisions of this
section before the closure of the first financial year after the date of such commencement.
Explanation.—For the purposes of this sub-section, the term “directly or indirectly”
shall include rendering of services by the auditor,—
(i) in case of auditor being an individual, either himself or through his relative or
any other person connected or associated with such individual or through any other
entity, whatsoever, in which such individual has significant influence or control, or
whose name or trade mark or brand is used by such individual;
(ii) in case of auditor being a firm, either itself or through any of its partners or
through its parent, subsidiary or associate entity or through any other entity,
whatsoever, in which the firm or any partner of the firm has significant influence or
control, or whose name or trade mark or brand is used by the firm or any of its partners.
 
 
 
145.Auditor to sign audit reports, etc.
 
The person appointed as an auditor of the company shall sign the auditor’s report
or sign or certify any other document of the company in accordance with the provisions of
sub-section (2) of section 141, and the qualifications, observations or comments on financial
transactions or matters, which have any adverse effect on the functioning of the company
mentioned in the auditor’s report shall be read before the company in general meeting and
shall be open to inspection by any member of the company.
 
 
 
146.Auditors to attend general meeting.
 
All notices of, and other communications relating to, any general meeting shall be
forwarded to the auditor of the company, and the auditor shall, unless otherwise exempted
by the company, attend either by himself or through his authorised representative, who shall
also be qualified to be an auditor, any general meeting and shall have right to be heard at
such meeting on any part of the business which concerns him as the auditor.
 
 
 
147.Central Government to specify audit of items of cost in respect of certain companies.
 
(1) If any of the provisions of sections 139 to 146 (both inclusive) is contravened,
the company shall be punishable with fine which shall not be less than twenty-five thousand
rupees but which may extend to five lakh rupees and every officer of the company who is in
default shall be punishable with imprisonment for a term which may extend to one year or
with fine which shall not be less than ten thousand rupees but which may extend to one lakh
rupees, or with both.
(2) If an auditor of a company contravenes any of the provisions of section 139,
section 143, section 144 or section 145, the auditor shall be punishable with fine which shall
not be less than twenty-five thousand rupees but which may extend to five lakh rupees:
Provided that if an auditor has contravened such provisions knowingly or wilfully
with the intention to deceive the company or its shareholders or creditors or tax authorities,
he shall be punishable with imprisonment for a term which may extend to one year and with
fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh
rupees.
(3) Where an auditor has been convicted under sub-section (2), he shall be liable to—
(i) refund the remuneration received by him to the company; and
(ii) pay for damages to the company, statutory bodies or authorities or to any
other persons for loss arising out of incorrect or misleading statements of particulars
made in his audit report.
(4) The Central Government shall, by notification, specify any statutory body or
authority or an officer for ensuring prompt payment of damages to the company or the
persons under clause (ii) of sub-section (3) and such body, authority or officer shall after
payment of damages to such company or persons file a report with the Central Government
in respect of making such damages in such manner as may be specified in the said notification.
(5) Where, in case of audit of a company being conducted by an audit firm, it is proved
that the partner or partners of the audit firm has or have acted in a fraudulent manner or
abetted or colluded in any fraud by, or in relation to or by, the company or its directors or
officers, the liability, whether civil or criminal as provided in this Act or in any other law for
the time being in force, for such act shall be of the partner or partners concerned of the audit
firm and of the firm jointly and severally.
 
 
 
148.Punishment for contravention.
 
(1) Notwithstanding anything contained in this Chapter, the Central Government
may, by order, in respect of such class of companies engaged in the production of such
goods or providing such services as may be prescribed, direct that particulars relating to the
utilisation of material or labour or to other items of cost as may be prescribed shall also be
included in the books of account kept by that class of companies:
Provided that the Central Government shall, before issuing such order in respect of
any class of companies regulated under a special Act, consult the regulatory body constituted
or established under such special Act.
(2) If the Central Government is of the opinion, that it is necessary to do so, it may, by
order, direct that the audit of cost records of class of companies, which are covered under
sub-section (1) and which have a net worth of such amount as may be prescribed or a
turnover of such amount as may be prescribed, shall be conducted in the manner specified
in the order.
(3) The audit under sub-section (2) shall be conducted by a Cost Accountant in
practice who shall be appointed by the Board on such remuneration as may be determined by
the members in such manner as may be prescribed:
Provided that no person appointed under section 139 as an auditor of the company
shall be appointed for conducting the audit of cost records:
Provided further that the auditor conducting the cost audit shall comply with the cost
auditing standards.
Explanation.—For the purposes of this sub-section, the expression “cost auditing
standards” mean such standards as are issued by the Institute of Cost and Works Accountants
of India, constituted under the Cost and Works Accountants Act, 1959, with the approval of
the Central Government.
(4) An audit conducted under this section shall be in addition to the audit conducted
under section 143.
(5) The qualifications, disqualifications, rights, duties and obligations applicable to
auditors under this Chapter shall, so far as may be applicable, apply to a cost auditor appointed
under this section and it shall be the duty of the company to give all assistance and facilities
to the cost auditor appointed under this section for auditing the cost records of the company:
Provided that the report on the audit of cost records shall be submitted by the cost
accountant in practice to the Board of Directors of the company.
(6) A company shall within thirty days from the date of receipt of a copy of the cost
audit report prepared in pursuance of a direction under sub-section (2) furnish the Central
Government with such report along with full information and explanation on every reservation
or qualification contained therein.
(7) If, after considering the cost audit report referred to under this section and the
information and explanation furnished by the company under sub-section (6), the Central
Government is of the opinion that any further information or explanation is necessary, it may
call for such further information and explanation and the company shall furnish the same
within such time as may be specified by that Government.
(8) If any default is made in complying with the provisions of this section,—
(a) the company and every officer of the company who is in default shall be
punishable in the manner as provided in sub-section (1) of section 147;
(b) the cost auditor of the company who is in default shall be punishable in the
manner as provided in sub-sections (2) to (4) of section 147.
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