Non-Verification of Documents during MCA Form SPICe Certification: ICAI imposes Penalty of ₹20k on CA

The charges stemmed from the CA’s assistance in incorporating a Private Limited Company
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The Institute of Chartered Accountants of India ( ICAI ) has found a Chartered Accountant ( CA ) guilty of professional misconduct.

The Registrar of Companies, Ministry of Corporate Affairs, filed a complaint against CA Parameswari D. It was alleged that her role in incorporating the company facilitated illegal activities. The company, with a Chinese national as a major shareholder, operated a loan application not available on the Google Play Store. A physical verification by the complainant’s department revealed that there was no company at the registered address.

The CA was accused of failing to exercise due diligence while certifying the e-forms for incorporation. Specifically, she allegedly certified the e-forms relying only on scanned copies of documents, which were not certified true copies of the originals and did not perform a written engagement letter or verify copies of the company’s Memorandum and Articles of Association ( MOA & AOA ).

The respondent claimed that her assistant, Paneer Selvam, verified the registered office and soft copies of documents received via email. While the committee acknowledged sending an assistant for verification to be a common practice, they found her explanation regarding document verification lacking.

The Chartered Accountant ( CA ) failed to produce any evidence to prove she verified the particulars from original or certified copies of documents, contradicting her declaration on the e-form.

The Committee determined that CA Parameswari D. violated Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, which pertains to gross negligence in the conduct of professional duties, thereby leading to the punishment.

The punishment includes removal from the Register of Members for 60 days and a fine of Rs. 20,000 ( Rupees Twenty Thousand only ) to be paid within 90 days. If unpaid, the removal period will be extended by 30 days.

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