The Registrar of Companies, Kolkata passed an adjudication order under Section 454 of the Companies Act, 2013 imposing penalty for violation of Section 450 arising from failure to charge depreciation on building assets in the financial statements for FY 2020-21. The ROC observed that the company had shown buildings as tangible assets but had not charged depreciation in accordance with Accounting Standard-6, thereby affecting the true and fair view of the company’s financial position. The auditor defended the treatment by stating that the building/flat was not used and was meant for resale, and that the accounting policy and notes to accounts disclosed the position. However, the adjudicating authority rejected the explanation as unsatisfactory and held that the auditor failed to comment on the non-compliance in the audit report, leading to violation of Section 143 read with Section 129 of the Companies Act. Consequently, a penalty of ₹10,000 was imposed on the auditor with directions to rectify the default and comply within 90 days.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Kolkata I
4th Floor Plot No.IIIF/16, in AA-IIIF Rajarhat, New Town, Akandakeshari, Kolkata, West Bengal, India, 700135
Phone: 033-22877390
E-mail: roc.kolkata@mca.gov.in
Order ID: PO/ADJ/05-2026/WB/02186 Dated: 16/05/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 450 OF THE COMPANIES ACT, 2013.
A. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette notification number S.O. 831(E) dated 24/03/2015 appointed undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
B. Company details:
In the matter relating to VISHAKA ENCLAVE PRIVATE LIMITED [herein after known as Company] bearing CIN U74999WB2016PTC216573, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at RAWDON CHAMBERS, 11A SAROJINI NAIDU SARANI 4TH FLOOR, UNIT 4B NA KOLKATA KOLKATA WEST BENGAL INDIA 700017
Individual details:
In the matter relating to BISWANATH GATTANI .——-
C. Provisions of the Act:
If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be 1[liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person]
D. Facts about the case
1. Default committed by the officers in default/noticee –
Description of violations:
The Financial Statements as available in the MCA portal for the financial year ended 31.03.2021, it is observed that the subject company is having building, as its tangible assets, however the notes to accounts to the Financial Statements reveals that no depreciation has been charged against the said assets in accordance with Accounting Standard-6 there by affecting the true and fair view of the state of affais of the company.
The same has not been commented upon by the Auditor in his Audit Report thereby leading to violation of Section 143 read with Section 129 of the Companies Act, 2013 read with Accounting Standard 6.
Reply of the Company:
Auditor Biswanath Gattani replied that:
It has been observed that the Auditor has not commented upon in his audit report, the issue of non-charging of depreciation on building/flat, thereby leading to violation of Section 143 read with section 129 of the Companies Act, 2013 read with accounting standard 6.
It is to be noted that depreciation must be charged when the asset is in possession, fit for use and is used. The building/ flat was not used and was meant for resale; no deprecation was charged. This has been clearly stated in the Significant Accounting policies in note no 9.2.c of the financial statement for the year ending 31.3.2021.
Further, it has been stated in the notes of Account vide point 10.3 that depreciation has not been charged during the year as the assets has not been used during the year.
The true and fair view of the situation for the building/flat has been clearly stated in the Notes and significant accounting policies that
?The possession of asset is pending and
?The Asset has not been used
In view of the above and as there is no violation, nothing was required to be reported in the Auditor Report.
IO?s conclusion:
The reply of the auditor is quite not satisfactory.
Company has filed The Financial Statements as available in the MCA portal for the financial year ended 31.03.2021 in which, it is observed that the subject company is having building, as its tangible assets, however the notes to accounts to the Financial Statements reveals that no depreciation has been charged against the said assets in accordance with Accounting Standard-6 thereby affecting the true and fair view of the state of affairs of the company.
The same has not been commented upon by the Auditor in his Audit Report thereby leading to violation of Section 143 read with Section 129 of the Companies Act, 2013 read with Accounting Standard 6.
Hence, sanction may be accorded for initiating penal action.
2. E-Hearing not Requested
E. Order:
1. Company in its Financial statements ended 31.03.2021, it is observed that the subject company is having building, as its tangible assets, however the notes to accounts to the Financial Statements reveals that no depreciation has been charged against the said assets in accordance with Accounting Standard-6 thereby affecting the true and fair view of the state of affairs of the company.
The same has not been commented upon by the Auditor in his Audit Report thereby leading to violation of Section 143 read with Section 129 of the Companies Act, 2013 read with Accounting Standard 6.
SCN was issued to the Auditor. No reply has been received.
In exercise of powers under proviso to section 454(3)(c) of the Act the undersigned hereby imposes penalty as below:
2. The details of penalty imposed on the company, officers in default and others are shown in the table below:
| (A) | Name of person on whom penalty imposed (B) | Rectification of Default required (C) | Penalty Amount (D) | Additional Penalty (E) (*Per day of continuing default i.e. date of rectification of default less order issue date) | Maximum limit for Penalty (F) |
| 1 | BISWANATH GATTANI . having PAN as ACZPG7823J | 10000 | 0 | 50000 |
3. The notified officers in default/noticee shall rectify the default mentioned above and pay the penalty, so applicable within 90 days of receipt of the order.
4. The notified officers in default/noticee shall pay the penalty amount via ‘e-Adjudication’ facility which can be accessed through the respective login IDs on the website of Ministry of Corporate Affairs and upload the copy of paid challan / SRN of e-filing (if applicable) on the ‘e-Adjudication’ portal itself. It is also directed that the penalty so imposed upon the officers in default shall be paid from their personal sources/income.
5. Appeal against this order may be filed in writing with the Regional Director, RD Kolkata within a period of sixty days from the date of receipt of this order, in Form ADJ setting for the grounds of appeal and shall be accompanied by a certified copy of this order [Section 454 (5) & 454 (6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014].
6. For penal consequences of non-payment of penalty within the prescribed time limit, please refer Section 454(8) of the Companies Act, 2013.
Arya Pyarelal,
Registrar of Companies
ROC Kolkata
