ICAI Reprimands CA on Failure to Submit Exception Report stating Running of NBFC without Registration [Read Order]
![ICAI Reprimands CA on Failure to Submit Exception Report stating Running of NBFC without Registration [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/08/ICAI-Reprimands-CA-Exception-Report-Running-of-NBFC-without-Registration-Failure-to-Submit-Exception-Report-Registration-NBFC-taxscan.jpg "ICAI Reprimands CA on Failure to Submit Exception Report stating Running of NBFC without Registration [Read Order]")
The Institute of Chartered Accountants of India (ICAI) reprimanded Chartered Accountant (CA ) Rakesh Patni for failure to submit an exception report stating the running of a Non-Banking Finance Institution(NBFC) without registration. It was alleged that the Respondent has not submitted the exception report for M/S. Deep Investrade (Bombay) Pvt Ltd ("Company") for the year 2014-15 even...
The Institute of Chartered Accountants of India (ICAI) reprimanded Chartered Accountant (CA ) Rakesh Patni for failure to submit an exception report stating the running of a Non-Banking Finance Institution(NBFC) without registration.
It was alleged that the Respondent has not submitted the exception report for M/S. Deep Investrade (Bombay) Pvt Ltd ("Company") for the year 2014-15 even though was carrying on NBFI activities without obtaining a Certificate of Registration from RBI in violation of provisions of Section 451A of the RBI Act) 1934.
The Respondent was a statutory audit of the Company since last more than 10 years. The auditee Company was a small Private Limited Company having a share capital of hard rupees One {akh and was not carrying on any financial/NBFC activities/business.
An amalgamation scheme was going on with one of the sister concerns and because of the amalgamation, some funds were received by the Company on account of the sale of Office premises. These funds were temporarily lying idle with the auditee company and hence the Company gave part of these funds as short-term loans and advances to the sister concern and part of the amount was invested in the Equity [preference share of sister concern instead of investing the same into FDR or mutual funds.
It was submitted that when the Respondent came to know of the circular, even after signing of the balance sheet, he enquired about the format, but no format is prescribed. Then the Respondent suo-moto corrected the mistake.
A Coram comprising Mrs Rani Nair, Shri Arun Kumar, CA. Rajendra Kumar P and CA. Cotha S Srinivas held the respondent guilty of Professional Misconduct falling within the meaning of Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
To Read the full text of the Order CLICK HERE
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