Ankita Lahoty Vs CA Vishal Kumar Damjibhai Kapuria (ICAI Disciplinary Committee)
ICAI Fines Auditor ₹1 Lakh for Borrowing Disclosures and Improperly Authenticated Financial Statements
Summary: The ICAI Disciplinary Committee, Bench-II, in Ankita Lahoty Vs CA Vishal Kumar Damjibhai Kapuria, by its final order dated 15 October 2026, reprimanded CA Vishal Kumar Damjibhai Kapuria (Membership No. 127592), partner of NDVR & Co., Ahmedabad, and imposed a fine of ₹1,00,000 for professional misconduct concerning the statutory audit and certification of Divyam Infracon Pvt. Ltd.’s financial statements for FY 2014-15. The order followed findings pronounced on 29 August 2026 in Case No. PR/G/189/2023/DD/124/2024/DC/2060/2025. The Committee held the respondent guilty under Clause (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. The fine was directed to be paid within 60 days from receipt of the order.
The complaint was filed by Ankita Lahoty, Deputy Registrar of Companies, Gujarat, concerning deficiencies in the company’s audited financial statements. Although the background referred to allegations involving the Power Bank App scam, the Committee recorded that no documentary evidence establishing the respondent’s involvement in that alleged fraud had been produced. Its findings were confined to two audit-related charges: the treatment and disclosure of unsecured borrowings and the statutory authentication of financial statements filed with Form AOC-4.
The first charge concerned unsecured borrowings of approximately ₹50.21 lakh, including amounts received from directors, their relatives and a bank. The Committee examined Sections 73 and 76 of the Companies Act, 2013 read with Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014. During FY 2014-15, the exclusion for amounts received from directors did not automatically cover relatives of directors. The exemption was extended to relatives of directors of private companies by the Companies (Acceptance of Deposits) Second Amendment Rules, 2015, effective from 15 September 2015. The Committee treated that amendment as prospective and therefore inapplicable to the financial year under examination.
In particular, the findings identified ₹10,33,596 received from Gobarabhai N. Chothani, father of a director, and ₹5,00,000 from Naranbhai Dudabhai Katrera, another director’s relative. The respondent’s contention that these amounts were automatically excluded from deposits was not accepted. The Committee also examined the disclosure of ₹40,31,434 of unsecured loans under a consolidated heading of short-term borrowings without the prescribed classification. It found that the financial statements did not adequately distinguish the relevant categories of borrowings under the statutory financial reporting framework. The auditor nevertheless issued an unmodified audit report without reporting the deficiency. The finding concerned failure to examine and report the applicable requirements, not a blanket conclusion that every unsecured loan constituted a public deposit.
The second charge concerned the authentication of financial statements uploaded with Form AOC-4. The documents bore the signatures of only one director and the auditor. Under Section 134(1) of the Companies Act, 2013, the financial statements required Board approval and signing by the authorised chairperson or the prescribed directors and officers. The respondent contended that the sole signatory was the chairperson and therefore could sign without another director. However, no Board resolution or documentary evidence establishing such authorisation was produced. The Committee noted the reliance on oral management representations and the absence of audit working papers establishing verification of the signatory’s authority.
The Committee rejected the argument that management’s primary responsibility for preparing and approving financial statements absolved the auditor of his independent professional responsibilities. It considered the respondent’s failure to verify statutory authentication and to report material disclosure deficiencies inconsistent with the duty to exercise due diligence. At the punishment stage, the respondent appeared through video conferencing on 15 October 2026 but did not file written representations. Having considered the documentary record and findings, the Committee imposed a reprimand and ₹1 lakh fine. The decision highlights the importance of applying the law prevailing in the relevant financial year, properly classifying borrowings and retaining documentary evidence of statutory signing authority.
