(Repeats for Asian day readership. No change to text.)
* India, Deloitte argue over provisions of country's law
* India wants 5-year ban on Deloitte, KPMG affiliate in fraud case
* Deloitte and KPMG affiliates deny any wrongdoing
* The case has unnerved auditing community in India
By Aditya Kalra
NEW DELHI, July 14 (Reuters) - India has told a tribunal the local auditing affiliate of international accounting group Deloitte Touche Tohmatsu is misreading a key federal law as the firm seeks to avoid a five-year ban on new business, according to legal documents reviewed by Reuters on Sunday.
Deloitte Haskins & Sells LLP is contesting the government's call for the ban on the auditor for its alleged involvement in a financial fraud.
The government has said it detected several violations of auditing standards by Deloitte and a KPMG affiliate while investigating fraud at IFIN, a unit of Infrastructure Leasing & Financial Services, whose debt defaults last year triggered fears of a financial contagion. Both auditors deny wrongdoing.
Deloitte's filing showed it last month argued the government case should be dismissed because it came after the auditor's 10-year stint at IFIN ended. The last audit it did was for the fiscal year to March 2018.
The alleged fraud began to be exposed last autumn and Deloitte said the law only allowed such a ban to be imposed if the auditor was actively auditing the company at the time, and didn't allow the government to take into account the firm's work over previous years.
India's Ministry of Corporate Affairs has countered, saying the law can't be read in such a "narrow and pedantic manner", according to its June 28 tribunal filing, which has been reviewed by Reuters and is not public.
"A fraud that continues till date on account of errant past auditor ... can undoubtedly be covered" under Indian law provisions, the government said in its 13-page filing, adding Deloitte was misreading and incorrectly interpreting the law.
The law was intended to "weed out an errant auditor from practicing so that corporate democracy, transparency and the economy of the country is not destabilizing", it added.
The case will next be heard on Monday at the National Company Law Tribunal in Mumbai.
"ORGANIZED CRIME"
A spokesman for Deloitte told Reuters on Sunday it had been advised the government's case was "not maintainable", declining to comment further. It has previously said "it has been thorough and diligent" in its duties as an auditor.