The MCA has notified Section 148 of The Companies Act, 2013 regarding maintenance of Cost Accounts / Cost Audit on 26th March 2014, to be effective from 1st April 2014. The MCA however has not notified “Final Rules” under Section 148 relating to Cost Audit as on date. In such a situation Sec 465 of The Companies Act 2013 which deals with “Repeal of Certain Enactments and Savings” will have to be referred to determine the status of The Companies (Cost Accounting Records) Rules, 2011 and The Companies (Cost audit Report) Rules, 2011 and other associated notifications issued under the Companies Act, 1956.
Section 465 of The Companies Act, 1965 reads as under:
465. (1) the Companies Act, 1956 and the Registration of Companies (Sikkim) Act,1961 (hereafter in this section referred to as the repealed enactments) shall stand repealed:
(2) Notwithstanding the repeal under sub-section (1) of the repealed enactments,—
(a) anything done or any action taken or purported to have been done or taken, including any rule, notification, inspection, order or notice made or issued or any appointment or declaration made or any operation undertaken or any direction given or any proceeding taken or any penalty, punishment, forfeiture or fine imposed under the repealed enactments shall, insofar as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act;
(b) subject to the provisions of clause (a), any order, rule, notification, regulation, appointment, conveyance, mortgage, deed, document or agreement made, fee directed, resolution passed, direction given, proceeding taken, instrument executed or issued, or thing done under or in pursuance of any repealed enactment shall, if in force at the commencement of this Act, continue to be in force, and shall have effect as if made, directed, passed, given, taken, executed, issued or done under or in pursuance of this Act;
The inference that can be drawn from a combine reading of Sub Section (1) and Sub Section (2) (a) & (b) of Section 465 is that:
The Companies Act, 1956 shall stand repealed. Notwithstanding the repeal of the repealed enactments....., insofar as it is not inconsistent with the provisions of this Act, any order, rule, notification in pursuance of any repealed enactment shall, if in force at the commencement of this Act, continue to be in force, and shall have effect as if made, directed, passed, given, taken, executed, issued or done under or in pursuance of this Act.
Hence, The Companies (Cost Accounting Records) Rules, 2011 and The Companies (Cost audit Report) Rules, 2011 and other associated notifications, orders, etc. issued under the Companies Act, 1956, will continue to be in force.
Add to this the fact that existing e-forms 23C and 23D, relating to appointment of Cost Auditor has not been withdrawn, while e-form 23C (Intimation by Statutory Auditor to Registrar) has been withdrawn with effect from 1-Apr-2014, possibly an indicator that “Final Rules” under Section 148 relating to Cost Audit will not be issued any time soon.
Therefore companies are advised to take immediate steps for the appointment of Cost Auditors/Cost accountants for Cost Audit/Compliance Report, as the case may be, following the same procedure as it was done for the previous year so as to ensure that the legal formalities of Appointment of Cost Auditors for the year 2014-15 are completed as early as possible.
Girish HS
Principal, Girish & Associates
CAclubindia
