The Institute of Chartered Accountants of India ( ICAI ) imposed a penalty on Chartered Accountants ( CA ) for misconduct by non-communication of acceptance as statutory auditor to prior auditor.
The Complainant vide a resolution passed in the AGM of the Company was appointed the statutory auditor of the Company for the financial year 2014-15 to 2018-19. Meanwhile, vide its letter dated 3rd September 2015 the company proposed the Respondent for his appointment as statutory auditor in the company and appointed him as the statutory auditor for 5 years i.e., from the F.Y. 2015. 16 to 2019-20 by passing a Resolution in its AGM held on 30th September 2019. The Complainant has stated that he was holding the office as statutory auditor of the company till the 2019 AGM but suddenly in 2015, the said Company because of some tax defaults shifted to Mumbai from Delhi and changed its auditor without adopting any procedure of Section 140 of Companies Act, 2013.
The Complainant alleged that the Respondent illegally accepted the position as statutory auditor of the Company for the financial year 2015-16 without first communicating with him, being the previous auditor. The appointment of Respondent as Statutory Auditor of the Company for the financial year 2015-16 violated Section 140 of the Companies Act 2013.
The Respondent kept silent for five years for which he was appointed and did not file any Form with the ROC and recently filed Form AOC-4 (to file the financial statements for each financial year) and MGT—7 (to fill their annual return details) for 5 years from 201516 to 2019-20
The Coram is comprised of CA. Rajendra Kumar P, Presiding Officer Ms. Dolly Chakrabarty ( IAAS, retd. ), Government Nominee CA. Priti Savla, Member was of the view that it is apparent that the due procedure as prescribed under the Companies Act for the appointment of the Respondent and the removal of the Complainant has not been followed. Further, the Respondent in his written submissions made at the Prima Facie stage as well as during the hearing admitted his mistake in complying with the provision of clause — 9 of Part-I of the First Schedule to the Chartered Accountants Act,1949.
The Board decided to impose a fine of Rs.35,OOO/- (Rs. Thirty-Five Thousand only) upon him. Further held that “The Respondent is GUILTY of Professional Misconduct falling within the meaning of Item (8) and (9) of Part I of the First Schedule to the Chartered Accountants Act, 1949 and Not Guilty of Other Misconduct falling within the meaning of Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 read with Section 22 of the said Act.”
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