Section 47 of the Code on Wages, 2019: Presumption of Accuracy of Audited Accounts
Section 47 governs the evidentiary treatment of audited balance sheets and profit and loss accounts of corporations and companies in specified wage and bonus disputes. It also allows trade unions or employees to seek clarification of accounting entries.
Text of Section 47
Section 47(1): Presumption for audited accounts
47. (1) Where, during the course of proceedings before-
(a) the authority under section 45; or
(b) the appellate authority under section 49; or
(c) a Tribunal; or
(d) an arbitrator referred to in clause (aa) of section 2 of the Industrial Disputes Act, 1947, in respect of any dispute of the nature specified in sections 45 and 46 or in respect of an appeal under section 49, the balance sheet and the profit and loss account of an employer, being a corporation or a company (other than a banking company), duly audited by the Comptroller and Auditor-General of India or by auditors duly qualified to act as auditors of companies under section 141 of the Companies Act, 2013, are produced before it, then, the said authority, appellate authority, Tribunal or arbitrator, as the case may be, may presume the statements and particulars contained in such balance sheet and profit and loss account to be accurate and it shall not be necessary for the corporation or the company to prove the accuracy of such statements and particulars by the filing of an affidavit or by any other mode:
Provided that where the said authority, appellate authority, Tribunal or arbitrator, as the case may be, is satisfied that the statements and particulars contained in the balance sheet or the profit and loss account of the corporation or the company are not accurate, it may take such steps as it thinks necessary to find out the accuracy of such statements and particulars.
Section 47(2): Right to request clarification
(2) When an application is made to the authority, appellate authority, Tribunal or arbitrator, as the case may be, referred to in sub-section (1), by any Trade Union being a party to the dispute or as the case may be, an appeal, and where there is no Trade Union, by the employees being a party to the dispute, or as the case may be, an appeal, requiring any clarification relating to any item in the balance sheet or the profit and loss account, then such authority, appellate authority, Tribunal or arbitrator, may, after satisfying itself that such clarification is necessary, by order, direct the corporation or, as the case may be, the company, to furnish to the Trade Union or the employees such clarification within such time as may be specified in the direction and the corporation or, as the case may be, the company, shall comply with such direction.
Meaning and scope of Section 47
Presumption of accuracy means that, when eligible audited financial statements are produced in a covered proceeding, the adjudicating authority may accept their statements and particulars as accurate without requiring the employer to establish each entry by affidavit or other evidence. This is not an automatic or irrebuttable presumption.
The rule applies to corporations and companies other than banking companies. The balance sheet and profit and loss account must be duly audited by the Comptroller and Auditor-General of India or auditors qualified under Section 141 of the Companies Act, 2013, which sets out qualifications and disqualifications for company auditors.
Proceedings covered
Section 47(1) identifies proceedings before the authority under Section 45 (claims and procedure), the appellate authority under Section 49 (appeals), a Tribunal, or the specified arbitrator. It concerns disputes under Sections 45 and 46 and appeals under Section 49. Section 46 deals with disputes relating to bonus fixation or eligibility and application of bonus provisions to public-sector establishments.
Challenging accounts and requesting clarification
Under the proviso to Section 47(1), if the adjudicating body is satisfied that the financial statements or particulars are inaccurate, it may take necessary steps to verify their accuracy. Under Section 47(2), a trade union that is party to the dispute or appeal, or employees who are parties where there is no trade union, may request clarification of particular accounting items. If clarification is considered necessary, the adjudicating body may direct the company or corporation to provide it within a specified time, and compliance is mandatory.
Practical illustration
Suppose a company's bonus entitlement is disputed and it produces its duly audited profit and loss account. The authority may initially rely on the figures without a separate affidavit. If the employees question a particular expense entry affecting the bonus calculation, they may apply for clarification. The authority must assess whether clarification is necessary and may order the company to explain the entry. This illustration does not replace the statutory conditions.
Official legal references
Read the India Code official legislation database, the Ministry of Labour and Employment - Code on Wages material, the official announcement on implementation of the four Labour Codes, and the Ministry of Labour and Employment for notifications, rules and updates. References in the enacted text to the Industrial Disputes Act, 1947 should also be read in light of the Industrial Relations Code, 2020 and applicable transition and saving provisions.
Updated: 7 October 2026. This article explains the statutory provision; applicable rules, notifications and case-specific orders should be checked for individual disputes.