To Learned Seniors & friends
Sub. : ESIC, New Delhi made mandatory for the establishments to get certificate from the Chartered Accountant while filing the half yearly return – Regulation 26 Return of Contribution – Form 5 – Its legality
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Sir
I would like to know the sanctity of Form 5 to the extent of asking an employer to get the Return of Contribution in Form 5 to be audited and verified from the Chartered Accountant, in case he employs 40 or more employees. I would be highly obliged if anyone could clarify on the following issue mentioned below:-
The Employees’ State Insurance Corporation has amended the amended provisions of Reg. 26 of the Employees’ State Insurance (General) Regulations, vide Notification No. N-12/12/1/2008-P&D dated March 11, 2008 of Employees’ State Insurance (General) (Amendment) Regulations. 2008. In the said amendment there is nothing which speaks of the audit and verification of the records by the Chartered Accountant nor there is anything on the record which shows that any powers have been conferred upon the Chartered Accountants to verify the ESI records.
After the amendment of the Reg. 26, a new Form 5 has been introduced by the ESIC, wherein it has been laid down that the employers would have to get a certificate from the Chartered Accountant where the employer has employed more than 40 employees, giving a certificate that all the provisions of the Act has been applied in letter and spirit.
My objection to the said Form No. 5 is that, in the absence of the any specific amendment in the ESI Act, the ESI Corporation cannot make laws on its own. There are no provisions under the ESI Act or ESI Regulations, making and authorizing the Chartered Accountants to verify the records of the establishment with regard to the provisions of ESI Act and to issue a certificate to that effect. The amended provision of the Regulation 26 also does not confer any such power. The Corporation by simply adding a new para in the performa/forms cannot legislate on the subject. The powers and authority to authorize the Chartered Accountant to verify and issue certificate is only with the Hon’ble Parliament, that too after the necessary amendment in the Act.
It may not be out of place to mention here that to get the records verified and a certificate issued from the Chartered Accountant, there must be a statutory enactment giving such powers to them, as has been provided in the TAX Laws. The statutory sections are mentioned below for ready reference, wherein the Chartered Accountants have been given the power to audit and verify the records:-
(i) Sec. 44 AB of the Income Tax Act, 1961 provides for the Audit of accounts by the accountant as defined under sec. 288, which says accountant means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), and includes, in relation to any State, any person who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered in that State.
(ii) Similarly under section 224 & 226 of the Companies Act, 1956 the provisions are made for the appointment of auditors for the audit of the records.
(iii) Similarly in VAT Act, 2004 under section 65 (1) the powers to conduct audit has been specifically given to the Chartered Accountant as defined under the Chartered Accountants Act, 1949.
(iv) Similarly, in the Punjab Vat Act, 2005 provisions are made for the audit of accounts by the Chartered Accountant in section 43 of the Act.
I would like to know the sanctity of Form 5 to the extent of asking an employer to get the Return of Contribution in Form 5 to be audited and verified from the Chartered Accountant, in case he employs 40 or more employees.
I trust that you would consider the matter and would reply at the earliest. .
Bye.
From India, Ludhiana
10Sub. : ESIC, New Delhi made mandatory for the establishments to get certificate from the Chartered Accountant while filing the half yearly return – Regulation 26 Return of Contribution – Form 5 – Its legality
-------------------------------------------------------------------
Sir
I would like to know the sanctity of Form 5 to the extent of asking an employer to get the Return of Contribution in Form 5 to be audited and verified from the Chartered Accountant, in case he employs 40 or more employees. I would be highly obliged if anyone could clarify on the following issue mentioned below:-
The Employees’ State Insurance Corporation has amended the amended provisions of Reg. 26 of the Employees’ State Insurance (General) Regulations, vide Notification No. N-12/12/1/2008-P&D dated March 11, 2008 of Employees’ State Insurance (General) (Amendment) Regulations. 2008. In the said amendment there is nothing which speaks of the audit and verification of the records by the Chartered Accountant nor there is anything on the record which shows that any powers have been conferred upon the Chartered Accountants to verify the ESI records.
After the amendment of the Reg. 26, a new Form 5 has been introduced by the ESIC, wherein it has been laid down that the employers would have to get a certificate from the Chartered Accountant where the employer has employed more than 40 employees, giving a certificate that all the provisions of the Act has been applied in letter and spirit.
My objection to the said Form No. 5 is that, in the absence of the any specific amendment in the ESI Act, the ESI Corporation cannot make laws on its own. There are no provisions under the ESI Act or ESI Regulations, making and authorizing the Chartered Accountants to verify the records of the establishment with regard to the provisions of ESI Act and to issue a certificate to that effect. The amended provision of the Regulation 26 also does not confer any such power. The Corporation by simply adding a new para in the performa/forms cannot legislate on the subject. The powers and authority to authorize the Chartered Accountant to verify and issue certificate is only with the Hon’ble Parliament, that too after the necessary amendment in the Act.
It may not be out of place to mention here that to get the records verified and a certificate issued from the Chartered Accountant, there must be a statutory enactment giving such powers to them, as has been provided in the TAX Laws. The statutory sections are mentioned below for ready reference, wherein the Chartered Accountants have been given the power to audit and verify the records:-
(i) Sec. 44 AB of the Income Tax Act, 1961 provides for the Audit of accounts by the accountant as defined under sec. 288, which says accountant means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), and includes, in relation to any State, any person who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered in that State.
(ii) Similarly under section 224 & 226 of the Companies Act, 1956 the provisions are made for the appointment of auditors for the audit of the records.
(iii) Similarly in VAT Act, 2004 under section 65 (1) the powers to conduct audit has been specifically given to the Chartered Accountant as defined under the Chartered Accountants Act, 1949.
(iv) Similarly, in the Punjab Vat Act, 2005 provisions are made for the audit of accounts by the Chartered Accountant in section 43 of the Act.
I would like to know the sanctity of Form 5 to the extent of asking an employer to get the Return of Contribution in Form 5 to be audited and verified from the Chartered Accountant, in case he employs 40 or more employees.
I trust that you would consider the matter and would reply at the earliest. .
Bye.
From India, Ludhiana
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ESI Form 1.pdf
ESI Form 5.xls