1. The Real Estate (Regulation and Development) Act, 2016 ( RERA), under the third Proviso to Section 4(2)(l)(D), contemplates/requires that a Promoter of a project which is registered under the provisions of RERA, to get the accounts relating to that project audited within six months after the end of every financial year by a Chartered Accountant in practice and it further requires that the statement of accounts duly certified and signed by the Chartered Accountant to be produced which shall be verified during the audit to check if the amounts collected for a particular project have been utilized for the project and withdrawal has been done in proportion to the percentage of completion of the project
2. K-RERA prescribes that the Annual Audit for a project be done by filing the statement of accounts in Form-7 online which is prescribed by it and is available on the web portal of K-RERA- https://rera.karnataka.gov.in/downloadPage (chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://rera.karnataka.gov.in/resources/downloads/Form-7.pdf)
3. The Authority enables filing of the Annual Audit Report after the end of the financial year and issues notice to the Promoters of all the registered projects which have not been reported as completed in the previous financial year to comply with mandatory requirement of submission of the Annual Audit Reports and also issues a circular which is generally uploaded on the web portal of K-RERA.
4. K-RERA enables the portal for filing of the Annual Audit, communicates the same to the Promoters of the registered projects of the requirement of filing of Annual Audit Reports and also informs them of the extension of time, if any, for submission of the same.
5. If the Promoters do not file the Annual Audit Reports within the time prescribed, the Authority, in the past, has taken cognizance of the same as a violation of Section 4 of the Act and has levied penalty upto 1% of the estimated cost of the project under Section 60 of the Act.
6. It is necessary for the Promoters of the projects which are registered under the provisions of the Act in Karnataka to ensure that the Annual Audit Reports as prescribed by Karnataka-RERA ( KA –RERA) file the Annual Audit Reports within the due date or such extended date, in which event the consequence of levying penalty will not arise.
7. If any Promoter has not filed the Annual Audit Report for the year 2022-23, he/she/it may have received the show cause notice from KA- RERA for non-filing of the Annual Audit (Notice Under Section 4(2) (L) (D) of The RERA ACT, 2016 for the Financial year 2022-23). It is necessary that the showcause notice be replied to immediately and also the Annual Audit Report for the relevant period be filed to ensure that the requirement of the Act is complied with and possibly the consequence of levy of penalty be avoided.
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