Home Companies Act CA Penalized by MCA for Violations in Audit Report [Read Order]

CA Penalized by MCA for Violations in Audit Report [Read Order]

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CA Penalized by MCA for Violations in Audit Report [Read Order]

CA Penalized by MCA for Violations in Audit Report [Read Order]

The Ministry of Company Affairs (MCA) within the matter of MITHLANCHAL PROFICIENT NIDHI LIMITED has penalized a Chartered Accountant for Violations in Audit Report.

Information concerning the case:

Nature of Non-compliance: Failure of reporting violations/non-compliance made by the corporate in audit report as required u/s. 143 of the Firms Act, 2013:

3.1 Contravention of part 129 and Part 2(40) of the Firms Act, 2013 learn with Accounting Customary-3:

As per Part 129(1) of the Firms Act, 2013 the Monetary Statements shall give a real and truthful view of the state of affairs of the Firm, adjust to the accounting requirements notified underneath part 133 and be in a kind as offered in Schedule III.

Upon perusal of the Monetary Statements for the monetary years ending as on 31.03.2017, 31.03.2018 and 31.03.2019, it’s noticed that the Firm, has not hooked up Money Movement Assertion together with the Monetary Statements as required by the Firms Act, 2013, therefore the monetary statements will not be reflecting the true and truthful view of the state of affairs of the corporate. Due to this fact, the corporate has contravened the provisions of Part 129 and Part 2(40) of the Firms Act, 2013 learn with Accounting Customary-3.

The identical has not been commented upon by the auditor in audit studies, thereby resulting in a violation of Part 143 learn with Part 129 and Part 2(40) of the Firms Act, 2013 learn with Accounting Customary-3.

3.2 Contravention of part 129 of the Firms Act, 2013 learn with AS-18:

As per Part 129(1) of the Firms Act, 2013, the Monetary Statements shall give tn,e and truthful view of the state of affairs of the Firm, adjust to the accounting requirements notified underneath part 133 and be within the kind ns offered in Schedule III.

Upon remark of the filed monetary statements for the monetary years ended on 31.03.2017, 31.03.2018 and 31.03.2019, it’s discovered that the Firm has not disclosed the title of the associated celebration and nature of the associated celebration relationship the place management exists regardless of whether or not there have been transactions between the associated events. In keeping with AS-18, the character of the associated celebration shall be disclosed regardless of any transaction and if there have been transactions between associated events, through the existence of a associated celebration relationship, the reporting enterprise ought to disclose the next: (1) the title of the transacting associated celebration; (ii) an outline of the connection between the events; (iii) an outline of the character of transactions; (iv) quantity of the transactions both as an quantity or as an applicable proportion; (v) every other components of the associated celebration transactions essential for an understanding of the monetary statements; (vi) the quantities or applicable proportions of excellent objects pertaining to associated events on the steadiness sheet date and provisions for uncertain money owed due from such events at that date; and (vii)quantities written off or written again within the interval in respect of money owed due from or to associated events.

Therefore it’s noticed that the Firm has contravened the AS-18 learn with Part 129 learn with Schedule III of the Firms Act, 2013 thereby affecting the true and truthful view of the state of affairs of the Firm within the aforesaid monetary 12 months.

The identical has not been commented upon by the auditor in audit studies, thereby resulting in a violation of Part 143 learn with Part 129 learn with AS-18.

3.3 Contravention of part 129 r/w Schedule III of the Firms Act, 2013:

As per Part 129(1) of the Firms Act, 2013 the Monetary Statements shall give a real and truthful view of the state of affairs of the Firm, adjust to the accounting requirements notified underneath part 133 and be in kind ns offered in Schedule III.

On examination of the monetary statements filed from the F.Y 31.03.2017, 31.03.2018 and 31.03.2019, it’s noticed that the Firm has proven brief time period borrowings amounting to Rs.2,36,15,116, Rs. 3,08,15,080 and Rs. 45,66,443 respectively, nevertheless did not sub-classify such short-term borrowings as Secured/Unsecured as per Schedule III of the Firms Act, 2013.

Thereby the true and truthful view of the state of affairs of the Firm has been affected and contravention of part 129 learn with Schedule III of the Firms Act, 2013.

The identical has not been commented upon by the auditor in audit studies, thereby resulting in a violation of Part 143 learn with Part 129 r/w Schedule III of the Firms Act, 2013.

3.4 Contravention of part 129 r/w Schedule III of the Firms Act, 2013:

As per Part 129(1) of the Firms Act, 2013 the Monetary Statements shall give a real and truthful view of the state of affairs of the Firm, adjust to the accounting requirements notified underneath part 133 and be within the kind as offered in Schedule III.

Upon perusal of the monetary statements filed for the monetary 12 months ended on 31.03.2018 and 31.03.2019, it’s discovered that the Firm has proven mortgage to members underneath the top of brief­time period loans and advances amounting to Rs. 2,02,95,743 and Rs. 1,55,95,666.87, nevertheless, did not sub­classify such short-term loans advances as Secured/ Unsecured as per Schedule III of the Firms Act, 2013 resulting in the contravention of part 129 learn with Schedule III of the Firms Act, 2013.

The identical has not been commented upon by the auditor in audit studies, thereby resulting in a violation of Part 143 learn with Part 129 r/w Schedule III of the Firms Act, 2013.

3.5 Contravention of part 129 learn with Schedule-III, Merchandise-6F(ii) of the Firms Act, 2013:

Through the course of the Inquiry, it has been seen from the Steadiness Sheet as at 31.03.2019 filed with this workplace that the Schedules Forming A part of the mentioned Steadiness Sheet reveals “Deferred Tax Legal responsibility-Schedule-3″ whereas no impact of the mentioned Deferred Tax Legal responsibility-Schedule-3 has been proven within the Steadiness Sheet, therefore it seems that the Monetary assertion has not given a real and truthful view of the state of affairs of the corporate, resulting in a transparent violation of the supply of Part 129(1) of the Firms Act, 2013 which inter-alia states as underneath:

As per Part 129(1) of the Firms Act, 2013 the Monetary Statements shall give a real and truthful view of the state of affairs of the Firm, adjust to the accounting requirements notified underneath part 133 and be within the kind ns offered in Schedule III.

The identical has not been commented upon by the auditor in audit studies, thereby resulting in a violation of Part 143 learn with Part 129 r/w Schedule III of the Firms Act, 2013.

3.6 Contravention of part 129 learn with Schedule-III, ltem-6F(ii) of the Firms Act, 2013:

Through the course of the Inquiry, it has been seen that an quantity of Rs. 14,566,443/­has been proven as “Brief Time period Borrowings” within the Steadiness Sheet as at 31.03.2019 however the mentioned quantity has not been sub-classified as secured and unsecured resulting in violation of the supply of Schedule-III, Merchandise-F(ii) underneath Part 129 of the Firms Act, 2013 which inter-alia states as underneath:

Merchandise-F(ii): Borrowings shall additional be sub-classified as secured and unsecured. The character of safety nonetheless be specified individually in every case.

The identical has not been commented upon by the auditor in audit studies, thereby resulting in violation of Part 143 learn with Part 129 r/w Schedule III of the Firms Act, 2013.

3.7 Contravention-of part 129 learn with Schedule-III, ltem-6R(ii) of the Firms Act, 2013:

Through the course of the Inquiry, it has been seen that an quantity of Rs. 1,56,14,108.87 has been proven as “Brief Time period Loans and Advances” within the Steadiness Sheet as at 31.03.2019 however the mentioned quantity has not been sub-classified as (a) secured, thought-about good; (b) Unsecured, thought-about good; (c) Uncertain, resulting in violation of the supply of schedule-III, Merchandise-6R(ii) underneath Part 129 of the Firms Act, 2013.

The identical has not been commented upon by you in audit studies, thereby resulting in violation of Part 143 learn with Part 129 r/w Schedule III, Merchandise-6F(ii) of the Firms Act, 2013.

The identical has not been commented upon by the auditor in audit studies, thereby resulting in violation of Part 143 learn with Part 129 r/w Schedule III of the Firms Act, 2013.

Therefore, the auditor viz., CA Vaibhav Paharia has violated the provisions of part 143(3)(e) and 143(3)0) of the Firms Act, 2013.

4. Whereas, this workplace has issued present trigger discover for default underneath part 143 of the Firms Act, 2013 vide this workplace letter no. ROC/PAT/ SCN/sec.143/19970/1430 dated 02.02.2024.

5. Nevertheless, this workplace has not acquired any reply from the abovesaid auditor. Therefore, it’s concluded that the provisions of Part 143 of the Firms Act, 2013 have been contravened by the auditor and due to this fact she is accountable for penalty u/s. 450 of the Firms Act, 2013 for the Monetary 12 months 2016-17, 2017-18 and 2018-19.

Part 450 states that:- “If an organization or any officer of an organization or every other particular person contravenes any of the provisions of this Act or the foundations made thereunder, or any situation, limitation or restriction topic to which any approval, sanction, consent, affirmation, recognition, path or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is offered elsewhere on this Act, the corporate and each officer of the corporate who’s in default or such different particular person shall be liable to a penalty of ten thousand rupees, and in case of constant contravention, with an extra penalty of 1 thousand rupees for every day after the primary throughout which the contravention continues, topic to a most of two lakh rupees in case of an organization and fifty thousand rupees in case of an officer who’s in default or every other particular person”.

Order:

Having thought-about the information and circumstances of the case and after considering the provisions of Rule-11 of Firms (Adjudication of Penalties) Guidelines, 2014 (as amended), hereby a penalty of Rs. 30,000 (Thirty Thousand) imposed on CA Vaibhav Paharia, Chartered Accountants­Membership no. 400984 for violation of Part 143 of the Firms Act, 2013 for the monetary 12 months 2016-17, 2017-18 and 2018-19.

The noticee shall pay the quantity of penalty individually by means of e-payment (accessible on the Ministry Web site) underneath “Pay miscellaneous charges” class in MCA price and fee Companies inside 90 (ninety) days of this order. The Challan/SRN generated after fee of the penalty by means of on-line mode shall be forwarded to this workplace.

Attraction towards this order could also be stuffed in writing with the Regional Director (ER), Ministry of Company Affairs, Kolkata, inside a interval of 60 (sixty) days from the date of receipt of this order, in Kind ADJ (accessible on Ministry web site) setting forth the grounds of attraction and shall be accompanied by an authorized copy of this order (Part 454(5) and 454(6) of the Act learn with Firms (Adjudication of Penalties) Guidelines, 2014).

Please observe that if the noticee doesn’t pay the penalty quantity imposed herein inside a interval of ninety days from the date of receipt of the copy of the order, he shall be punishable with imprisonment which can prolong to 6 months or with a wonderful which shall not be lower than twenty-five thousand rupees however which can prolong to 1 lakh rupees, or with each by way of part 454(8)(ii) of the Firms Act, 2013; other than the legal responsibility to pay the penalty quantity in compliance to this order, and for which prosecution might be filed with out additional discover on this regard.

For Official Order Obtain PDF Given Beneath:

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