Institute of Chartered Accountants of India’s Disciplinary Committee (Bench-III, 2024–2025), in an order dated July 31, 2024, reprimanded Chartered Accountant Pawan Goel for failing to comply with statutory obligations following his resignation as auditor of Taproot Farms Pvt. Ltd. The Committee held Goel guilty of “Other Misconduct” under Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.
The proceedings stemmed from a complaint filed by Mr. Gopi Krishna Anumasa, alleging that CA Goel, after resigning as the auditor on November 4, 2020, failed to file the mandatory ADT-3 form notifying the Registrar of Companies (RoC), and also withheld the complainant’s Digital Signature Certificate (DSC).
The Disciplinary Committee, consisting of Presiding Officer CA Charanjot Singh Nanda, Government Nominees Smt. Anita Kapur and Dr. K. Rajeswara Rao, and CA Piyush S. Chhajed, heard the matter on May 2, 2024.
During the hearing, the Committee examined both parties’ submissions. The complainant alleged that Goel had not filed the resignation form (ADT-3) and refused to return the DSC, creating compliance issues for the company. Goel, in his defence, stated that the complainant failed to pay his professional fee of ₹8,000 and that he had requested the complainant to collect the DSC from his office, citing a specific address in Hyderabad.
The Committee found no evidence that the complainant attempted to collect the DSC and noted that Goel had communicated the collection process via email. It opined that the complainant bore responsibility for retrieving the DSC and concluded that Goel’s conduct in this regard did not amount to professional misconduct under Part II of the Second Schedule.
However, on the charge of not filing ADT-3, the Committee found Goel in violation of Section 140(2) of the Companies Act, 2013 read with Rule 8 of the Companies (Audit and Auditors) Rules, 2014. The law mandates auditors who resign to file Form ADT-3 with the RoC within 30 days. Goel acknowledged not filing the form but argued that the company had already appointed another auditor and completed its filings, rendering the omission inconsequential.
The Committee rejected this reasoning, emphasizing that statutory requirements must be adhered to regardless of practical outcomes. The auditor’s obligation to notify the Registrar remains independent of subsequent actions by the company. Non-compliance, it held, constituted misconduct.
While acknowledging the lapse as procedural in nature, the Committee maintained that such violations undermine the regulatory framework. Accordingly, it determined that a reprimand was an appropriate penalty, balancing the nature of the breach with the facts and circumstances presented.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-III (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/127/2021/DD/179/2021/DC/1793/2023
In the matter of:
Mr. Gopi Krishna Anumasa,
…Complainant
Versus
CA. Pawan Goel,
……Respondent
MEMBERS PRESENT:
CA. Charanjot Singh Nanda, Presiding Officer (Present in Person)
Smt. Anita Kapur, Government Nominee (Present in Person)
Dr. K. Rajeswara Rao, Government Nominee (Present through Video Conferencing Mode)
CA. Piyush S. Chhajed, Member (Present in person)
Date of Hearing: 2nd May 2024
Date of Order: 31st July, 2024
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 dated 3rd October 2023, the Disciplinary Committee was, inter-alia, of the opinion that Pawan Goel (hereinafter referred to as the “Respondent”) was GUILTY of Other Misconduct falling within the meaning of Item (2) of Part-IV of First Schedule to the Chartered Accountants Act, 1949.
2. The Committee noted that the Respondent had resigned from the position of auditor of M/s Taproot Farms Pvt. Ltd. (hereinafter referred to as the “Company”) on 4th November 2020. The charge against the Respondent is that he failed to adhere to obligation to file e-form ADT 3 (Resignation of Auditor) within stipulated time as required under Section 140 of the Companies Act, 2013 read with Rule 8 of the Companies (Audit & Auditors) Rules, 2014.
3. That pursuant to the said findings, an action under Section 216(3) of the Chartered Accountants Act, 1949 was contemplated against the Respondent and a communication was addressed to him’ thereby granting an opportunity of being heard in person/through video conferencing and to make representation before the Committee on 2nd May 2024.
4. the Committee noted that on the date of hearing held on 2ndMay 2024, the Respondent Was present through Video Conferencing Mode and made his verbal submissions on the findings of the Disciplinary Committee.
5. The Committee considered the reasoning as contained in the findings holding the Respondent Guilty of professional misconduct vis-à-vis submissions of the Respondent in the matter made before it.
6. Keeping in view the facts and circumstances of the case, along with the material on record including representations on the findings, the Committee noted that certain inbuilt checks’ had been made under various requirements under the Companies Act which were mandatorily required to be complied with. In the present case the Respondent resigned from the Company on 4thNovember 2020 and hence he was under an obligation to inform the Registrar of Companies by filing ADT 3 within stipulated time. However, he failed to submit the same. The misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 3rd October 2023 which is to be read in conjunction With the instant Order being passed in the case.
7. On consideration of the overall facts of the case, the Committee viewed that it was a mere procedural lapse on the Respondent’s part and the ends of justice will be met if punishment Commensurate with misconduct is given to the Respondent.
8. Accordingly, the Committee, upon considering the nature of charge and the facts of the matter ordered that CA. Pawan Goel be reprimanded.
Sd/-
(CA. CHARANJOT SINGH NANDA)
PRESIDING OFFICER
Sd/-
(SMT. ANITA KAPUR)
GOVERNMENT NOMINEE
Sd/-
(DR. K. RAJESWARA RAO)
GOVERNMENT NOMINEE
Sd/-
(CA. PIYUSH S CHHAJED)
MEMBER
DATE : 31st JULY, 2024
PLACE : NEW DELHI
