The Institute of Chartered Accountants of India (ICAI) Disciplinary Committee found Chartered Accountant (CA) Manish Manakchand Kanthed guilty of professional misconduct. The complaint was filed by the Registrar of Companies, Mumbai, regarding the CA’s certification of e-Form INC-22. The form stated a company’s registered office was at a specific address, but a physical verification revealed the company did not maintain an office there. The CA defended his actions by stating the address was a co-working space and he had exercised due diligence. He argued no fraud or financial gain was involved. The Committee, however, determined that the CA certified the form despite being aware the company only had a “Space Usage Agreement” for a virtual address, which is not compliant with the Companies Act, 2013. The lack of rent payments recorded in the company’s financial statements further supported the finding that no physical office was maintained. Based on these findings, the Disciplinary Committee ordered that CA Kanthed be reprimanded for his professional misconduct.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-II (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 21B (3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 19(1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007
[PR/G/125/2022-DD/421/2022-DC/1747/2023]
In the matter of:
Registrar of Companies, Mumbai
Ministry of Corporate Affairs
Versus
CA. Manish Manakchand Kanthed
Members Present: –
CA. Ranjeet Kumar Agarwal, Presiding Officer (in Person)
Mrs. Rani S Nair, I.R.S. (Retd.), Government Nominee (in Person)
CA. Sanjay Kumar Agarwal, Member (in Person)
CA. Cotha S Srinivas, Member (through VC)
Date of Hearing: 3rd February 2025
Date of Order: 8thFebruary 2025
1. That vide Findings under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, Registrar of Companies, Mumbai, Through Dr Alpesh Maniya -vs- CA Manish Manakchand Kanthed , the Disciplinary Committee was, inter-alia, of the opinion that CA. Manish Manakchand Kanthed ,(hereinafter referred to as the ‘Respondent’) is GUILTY of Professional Misconduct falling within the meaning of Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said Findings, an action under Section 21B (3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to him thereby granting opportunity of being heard in person / through video conferencing and to make representation before the Committee on 03rd February 2025.
3. The Respondent was present before the Committee on 03rd February 2025 through video conferencing and made his verbal representation on the Findings of the Disciplinary Committee, inter-alia, stating that, the registered office address verified by him was a Co-working space. No fraud has been committed by him. Further, no financial benefit was derived by him from the same. He also requested the Committee to take a lenient view in the case.
4. The Committee also noted that the Respondent in his written representation dated 27tH January 2025 on the Findings of the Committee, inter-alia, stated as under:
(a) The Company is not a shell company and there has been no instance of appointment of any Chinese Director and the shares of the Company have not been subscribed, acquired or taken over by any Chinese Individuals or entities. Further, the Company and all the Directors are active and present to reply to all the queries raised by any Departments.
(b) He as a professional had discharged his duties to the best of his knowledge, exercising professionalism and due diligence in the present matter and had already submitted all the details and documents available with him which are genuine and rational in nature. He added that he has no further findings or submission to be made in this case.
(c) He has always cooperated with ICAI and the Registrar of Companies, Mumbai with submission of all documents from his end.
(d) He further requested the Committee to close the matter with minimum penalty and punishment.
5. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional Misconduct vis-à-vis written and verbal representation of the Respondent.
6. Keeping in view the facts and circumstances of the case and material on record including verbal and written representation on the Findings, the Committee noted the following as per its Findings dated 21st January 2025:
| Charge No. | Charge(s) | View of the Committee |
Item of the Schedule in which Respondent held Guilty |
| 1 | In the e-Form INC-22 filed and certified by the Respondent on 19.11.2020, the Registered Office address of the Company is shown to be situated at “Times Square, 7th & 8th Floor, CTS 349 & 349-1 W.E. Highway NR Sai Service Andheri East Mumbai, Mumbai Maharashtra — 400069, India”. However, during physical verification by the officials of the Registrar of Companies, it was seen that the said registered office has not been maintained by the Company. |
Guilty | Item (7) of Part I of the Second Schedule |
6.1With respect to the charge alleged against the Respondent regarding certification of e-Form INC-22 by the Respondent on 19th November 2020, noted that one of the attachments to the said Form is the copy of the Rent Agreement dated 11th November 2020 executed between the Company and M/s. Mascots Business Support Services Private Limited specifying it to be a “Space Usage Agreement”.
6.2 The Committee observed that the very purpose of entering the said Agreement was to obtain a new virtual registration address/space for business correspondence, for obtaining Government licenses and to receive mails on the said premises i.e. just for fulfilling legal requirements.
6.3 Thus, the Committee held that despite being aware of the type of arrangement undertaken by the Company with the service provider in the form of space usage agreement wherein the possession of the premises is not even transferred by the service provider to the Company, the Respondent certified Form INC-22 of the subject Company which was apparently not in compliance with the provisions of Rule 25 of the Companies (Incorporation) Rules, 2014 read with Section 12 of the Companies Act, 2013.
6.4 Also, no lease or rent amount was shown / disclosed in the Statement of Profit and Loss account along with related schedules for all said financial years i.e., 2016-17 to 2020-21. Also, in the said Statement of Profit and Loss of the Company, merely the sales and administrative expense including the audit fee payable, depreciation and amortization expenses were shown as expenses for all financial years 2016-17 to 2020-21.
6.5 Thus, the absence of recording of any rent payable / paid by the Company in respect of its registered office address in the audited financial statements of the Company further fortifies that no registered office was maintained by the Company as declared in Form INC-22 certified by the Respondent. Thus, the Committee held that due diligence was not exercised by the Respondent while certification of Form INC-22.
6.6 Hence, Professional Misconduct falling within the meaning of Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949 on the part of the Respondent is clearly established as held in the Committee’s Findings dated 21st January 2025 which is to be read in consonance with the instant Order being passed in the case.
7. Accordingly, the Committee was of the view that ends of justice will be met if punishment is given to the Respondent in commensurate with his Professional Misconduct.
8. Thus, the Committee, keeping in view the facts and circumstances of the case, material on record and representation of the Respondent before it, ordered that CA. Manish Manakchand Kanthed be Reprimanded under Section 21B(3)(a) of the Chartered Accountants Act 1949.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(MRS. RANI S NAIR, I.R.S. (RETD.)
GOVERNMENT NOMINEE
Sd/-
(CA. SANJAY KUMAR AGARWAL)
MEMBER
Sd/-
(CA. COTHA S SRINIVAS)
MEMBER
