The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has reprimanded CA. Isha Gupta for professional misconduct. The order, dated January 20, 2025, follows a complaint by the Deputy Registrar of Companies regarding the certification of incorporation documents for M/s. Ormang Overseas Pvt. Ltd. The committee found the CA guilty of professional misconduct, specifically for failing to exercise due diligence. During a hearing, the CA admitted to having no proof of a personal visit to the company’s registered office, despite her declaration on the SPICe Form. The committee also noted that she failed to provide evidence of verifying the identity of the company’s directors or promoters and had not issued an engagement letter for the assignment. Although the CA argued that she acted in good faith based on the documents provided and that there was no evidence of her involvement in illegal activities, the committee determined that her failure to perform essential professional duties constituted misconduct. As a result, the committee ordered that she be reprimanded under Section 21B(3)(a) of the Chartered Accountants Act, 1949.
THE NSTITUTE CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-IV (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 2113(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.
File No. : PR/G/09/2022/DD/75/2022/DC/1716/2023
In the matter of :
Smt. Kamna Sharma
Versus
CA. Isha Gupta
MEMBERS PRESENT:
1. CA. Ranjeet Kumar Agarwal, Presiding Officer (In person)
2. Shri Jiwesh Nandan, I.A.S (Retd.), Government Nominee (In person)
3. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
4. Mangesh P Kinare, Member (In person)
5. Abhay Chhajed, Member (In person)
DATE OF HEARING : 06th January 2025
DATE OF ORDER : 20th January 2025
1. That vide Findings dated 15.10.2024 under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Disciplinary Committee was inter-alia of the opinion that CA. Isha Gupta (hereinafter referred to as the Respondent”) is GUILTY of Professional Misconduct falling within the meaning of Item (7) of Part of 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 her thereby granting an opportunity of being heard in person/ through video conferencing and to make representation before the Committee on 06thJanuary 2025.
3. The Committee noted that on the date of hearing on 06th January 2025, the Respondent was present through video conferencing. During the hearing, the Respondent stated that she had already submitted her written representation dated 08/11/2024 on the Findings of the Committee. During the hearing before the Committee, the Respondent admitted that she had certified the incorporation documents of the Company but has no proof of personal visit to the registered office of the Company. The Committee also noted the written representation of the Respondent dated 08/11/2024 on the Findings of the Committee, which, inter alia, are given as under:-
- Scope of work was related to certification of SPICE Form w.r.t incorporation of Company (M/s. Ormang Overseas Pvt. Ltd.).
- The Respondent was never Statutory Auditor of the Company.
- During certification assignment, the Respondent did not come across any evidence which would cast doubt on the integrity of the documents, and thus she acted in good faith for certification assignment.
- The Complainant failed to produce any document proving any alleged illegal association with foreign entities or involvement in suspicious activities of the Respondent.
- The Respondent had certified the incorporation documents based on the information and documents submitted to her and that she was not aware of the fact that the Directors/Promoters were dummy.
- The Respondent, while certifying incorporation documents, had relied upon Form No INC-09 i.e. notarized affidavits of both Directors, wherein they had declared that they were not convicted of any offence, or guilty of any fraud.
- Prior to incorporation of Company, the Directors already held legitimate DIN number(s) issued by the Complainant Department.
- The Respondent had visited the registered office of the Company physically, which was in conformity with the Declaration made in the SPICe Form.
- Gopal has never mentioned the name of the Respondent in any of the business affairs that took place in the Company.
- No evidence was provided to show that the Respondent had acted malafide or with moral delinquency. The Respondent has a longstanding, unblemished career, free from any prior accusations of misconduct.
4. The Committee considered the reasoning as contained in Findings holding the Respondent ‘Guilty’ of Professional Misconduct vis-a-vis written and verbal representation of the Respondent. The Committee noted that the issues/ submissions made by the Respondent as afore stated have been dealt with by it at the time of hearing under Rule 18.
5. Thus, keeping in view the facts and circumstances of the case, material on record including written and verbal representation of the Respondent on the Findings, the Committee noted that the Respondent failed to bring on record any evidence to prove that she had personally visited the registered office address of the Company at the time of certification of incorporation documents of the Company. Further, the Committee noted that the Respondent vide her letter dated 22/08/2022 had submitted that she had certified the incorporation documents on the basis of the information and document submitted to her along with the Memorandum of Association and Articles of Association. In view of this, the Committee was of the view that the Respondent has failed to put forth any evidence in respect of verification of the identity of the Directors/Promoters. Further, the Committee also noted that no engagement letter was issued to the Respondent for the assignment of certification of incorporation documents of the Company and it is evident that the Respondent had failed to prove the identity of the Directors/Subscribers of the Company. Thus, the Committee was of the view that the Respondent failed to exercise due diligence while performing her professional duties in respect to the certification of incorporation documents of the Company.
6. Hence, the Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 15th October 2024 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 the ends of justice would be met if punishment is given to her in commensurate with her Professional Misconduct.
8. Thus, the Committee ordered that the Respondent i.e. CA. Isha Gupta, be REPRIMANDED under Section 21B(3)(a) of the Chartered Accountants Act 1949.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(SHRI MESH NANDAN, I.A.S. {RETD.})
GOVERNMENT NOMINEE
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.I{RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. MANGESH P KINARE)
MEMBER
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
