Mumbai: Price Waterhouse (PW), a network firm of PwC India has quit as auditor to BSE-listed construction and infrastructure company Atlanta Limited after it apparently refused to share details of an ongoing income tax investigation and the resignation of an independent director.
The income tax department is investigating sources of some of the company’s income and expenditure and whether some transactions escaped tax scrutiny. The investigations have been going on for the past few years and an assessment order was passed by the tax department this year.
“We would like to bring to your attention that significant information including certain significant observations made by the tax authorities requested by us from the company at various point in time as part of the audit were not provided,” PW said in a letter to Atlanta on Monday.
This is the second case of big auditor resigning from a company due to insufficient information about financial accounts. Deloitte Haskins & Sells quit as auditor to Manpasand Beverages on Sunday.
The letter said Atlanta also did not inform the auditor about resignation of an independent director.
“The income tax assessment order would have financial impact on the company’s accounts as provisions for the same have to be made depending on the nature of allegations,” said a person in the know.
“In the absence of adequate and relevant information and explanations, and considering the nature of the observation laid by tax authorities, the fundamental objective of an audit which is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to report all the financial statements, in our assessment, cannot be achieved, both in reference to observation and otherwise,” the auditor said in the letter.
Atlanta announced the acceptance of PwC’s resignation on Wednesday and refuted their charges. “At the outset, we do not agree that you were not informed regarding the receipt of the orders under Section 147 of the Income Tax Act regarding assessment for the past six assessment years viz. AY11-12 to AY 16-17 and Order under Section 143 for AY17-18.It is pertinent to state that our vice president-accounts vide emails dated 30.3.2018 at 7.37pm and 12.5.2018 at 8.01pm, had informed Mr. Basant Chandak and Mr. Rohit Pansare respectively, having an attachment consisting of summary of Income Tax demand outstanding as on 31.3.2018,” the company said in response to PW’s resignation letter.
Atlanta on Tuesday informed the BSE that the scheduled board and other committee meeting for approval of audited results of the company could not be held on that day for want of quorum.
In a letter attached with this regulatory filing, the company stated that its independent director Shankar Vishwanath had resigned from the board and other committees citing his “pre-occupations”.
Atlanta also said that other independent director Jaya Balachandran had also conveyed her inability to attend the meetings as she is currently out of country.
Credits : Economic Times