E-Form ADT-1 is required to be filed pursuant to Section 139 and 140 of the Companies Act, 2013 (‘CA, 2013’) and pursuant to Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014. It is notable that the first Auditor shall be appointed in the company by Board of Director under Section 139(6) or 139(7) of the Companies Act, 2013. Section 139(6) of CA, 2013 stated for appointment of first auditor of company other than Government Company and Section 139(7) of CA, 2013 states for appointment of first auditor for Government company. Because existing Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014, mentions only about Section 139(1) of the CA, 2013 and not for Section 139(6) & 139 (7) of CA, 2013, therefore, there is no requirement under CA, 2013 & rules thereof, to file ADT-1 in case of appointment of first auditor of the company. Refer the following-
“Section 139(6)- Notwithstanding anything contained in sub-section (1), the first auditor of a company, other than a Government company, shall be appointed by the Board of Directors within thirty days from the date of registration of the company and in the case of failure of the Board to appoint such auditor, it shall inform the members of the company, who shall within ninety days at an extraordinary general meeting appoint such auditor and such auditor shall hold office till the conclusion of the first annual general meeting.”
“Section 139(7)- Notwithstanding anything contained in sub-section (1) or sub-section (5), in the case of a Government Company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government, or Governments, or partly by the Central Government and partly by one or more State Governments, the first auditor shall be appointed by the Comptroller and Auditor-General of India within sixty days from the date of registration of the company and in case the Comptroller and Auditor-General of India does not appoint such auditor within the said period, the Board of Directors of the company shall appoint such auditor within the next thirty days; and in the case of failure of the Board to appoint such auditor within next thirty days, it shall inform the members of the company who shall appoint such auditor within sixty days at an extraordinary general meeting, who shall hold office till the conclusion of the first annual general meeting.”
“Rule 4(2)- The notice to Registrar about appointment of auditor under fourth proviso to sub-section (1) of section 139 shall be in Form ADT-1.”
In view of the above, it is pertinent to mention that Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014 stated about the filling of Form ADT-1 in the appointment of auditors of the company in Section 139(1) of CA, 2013. Section 139(6) or 139(7) of CA, 2013 are not mentioned in Rule 4(2) the Companies (Audit and Auditors) Rules, 2014, therefore, Form ADT-1 is not required to submit before ROC at the time of appointment of first auditor of Company under section 139(6) or 139(7) of CA, 2013. Section 139(1) of the CA, 2013 talks about the appointment of auditor other than the first auditor.
Remark: Form ADT-1 is not required to submit before ROC at the time of appointment of first auditor of Company under section 139(6) or 139(7) of CA, 2013. Section 139(1) of the CA, 2013 talks about the appointment of auditor other than the first auditor. However, for good practice, Form ADT-1 should be also filed in case of appointment of first auditor.
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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.
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I agree to your Views but its partially correct. The interpretation of section 139 should be made completely and not partially based on the provision 139(1) and 139(6).
As per 139(1) which is in detail and requirement of Consent letter including appointment letter is mentioned under the said proviso which is missing under 139(6). This does not mean that the company does not require Consent letter or Appointment letter if the Auditor is appointed in 1st Board Meeting as per 139(1).
Again we need to think practically on the same and also see the options in the eform available..
Just shared my views there might be different opinions and interpretation.