Casual Certification of Form 8 for Chinese LLP: ICAI Disciplinary Committee reprimands CA
The DC, ICAI has reprimanded a CA for casual certification of Form 8 with unsigned attachment for a Chinese LLP
ICAI – ICAI Disciplinary Committee – Form 8 certification – Chinese LLP – Chartered Accountant reprimand – TAXSCAN
ICAI – ICAI Disciplinary Committee – Form 8 certification – Chinese LLP – Chartered Accountant reprimand – TAXSCAN
The Institute of Chartered Accountants of India ( ICAI ) Disciplinary Committee has reprimanded a Chartered Accountant for signing Form 8 for a Chinese LLP with an unsigned attachment, while holding that there was no gross negligence.
The complaint originated from the Registrar of Companies, Karnataka, stating that certain LLPs, incorporated by Chinese nationals, engaged in illegal activities like power bank scams in India. Despite the main business objectives being e-commerce, the LLPs faced allegations of unauthorized operations.
The CA defended his role, asserting good faith in facilitating legitimate business incorporation. He provided documents, including letters clarifying business activities and agreements with regulatory authorities.
The Committee scrutinized the allegation that M/s. Runto Technology LLP shared an address with three other LLPs. They found supporting documents, such as rental agreements and NOC, validating the distinct existence of the LLP.
Regarding the unsigned attachment in Form 8 for M/s. Runto Technology LLP, CA Dadich explained it pertained to NIL amounts as per MSME Act requirements. The Committee acknowledged the digital signatures of designated partners on Form 8, concluding that the non-signed attachment did not imply gross negligence.
It was observed that, “the Respondent had certified the alleged Form only with respect to correctness of particulars stated in the form and that of the attachments, Moreover, Form 8 was digitally signed by both the designated partners, so attachment was considered to have duly been verified by them.”
It was further noted that, “In the absence of any evidence to the contrary, a non-signed attachment pertaining to NIL amount could not be considered as tantamount to gross negligence.”
The Committee, however, cautioned the Respondent to be more careful and cautious while performing his professional duties and carrying out certification work for his clients in his future assignments.
Accordingly, the Committee viewed that the Respondent was Not Guilty of Professional Misconduct falling within the meaning of Item (7) of Part I of Second Schedule to the Chartered Accountants Act, 1949 with respect to extant allegation.
In summary, the CA has been cleared of professional misconduct allegations in the LLP incorporation case. The ICAI Disciplinary Committee found him Not Guilty under Item (7) of Part I of the Chartered Accountants Act, 1949. As per Rule 19(2), the case has been closed.
To Read the full text of the Order CLICK HERE
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