The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) issued an order against CA. Nishant Gupta for professional misconduct after he failed to appear for multiple hearings. The core of the misconduct was the CA’s audit of a company’s financial statements for the Financial Year 2019-2020. The committee found that these statements were not signed by any of the company’s directors, as required by Section 134 of the Companies Act, 2013. Instead, they were signed only by the CA himself. The committee concluded that he should not have accepted the financial statements for audit or signed them without the required director approvals. Since the CA did not respond to the notices or present a defense, the committee proceeded with an ex-parte decision based on the available evidence. Concluding that the professional misconduct was clearly established, the committee ordered that CA. Nishant Gupta be reprimanded.
THE INSUTE OF CHARTERED ACCOUNTANTS OF NDIA
(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 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.
File No: [PR/G/263/22/DD/163/2022/DC/1718/2023]
In the matter of:
Registrar of Companies,
Ministry of Corporate Affairs,
Versus
CA. Nishant 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. CA. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (In person)
4. CA. Mangesh P Kinare, Member (Through VC)
DATE OF HEARING : 03rd February 2025
DATE OF ORDER :08th February 2025
1. That vide Findings dated 16/10/2024 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. Nishant Gupta (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 communication(s) were addressed to him thereby granting opportunities of being heard in person/ through video conferencing and to make representation before the Committee on four occasions viz. in the meetings fixed on 11/12/2024, 06/01/2025, 20/01/2025 and 03/02/2025.
3. The Committee noted that this case was fixed before it for award of punishment under Rule 19(1) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007. The Committee also noted that the Respondent had neither filed any written representation on the Findings of the Committee in captioned case nor appeared before it despite the fact that he was specifically informed through notices for hearings fixed on 20/01/2025 and 03/02/2025 that in case of his failure to appear, the matter would be decided ex-parte based upon the documents and materials available on record. The Committee further noted that the proviso to Rule 19(1) of afore-stated Rules provides that if the Respondent does not appear for making representation before it at the stage of award of punishment, the Committee shall presume that he has nothing more to represent before it and shall pass order.
4. In view of above facts, the Committee decided that there was no need of granting any further opportunity to the Respondent as sufficient opportunities have already been extended to him. Therefore,. the Committee decided to proceed with passing of order in the instant matter, in the absence of the Respondent, on the basis of documents/ material available on record.
5. The Committee considered the reasoning as contained in the Findings holding the Respondent ‘Guilty’ of Professional Misconduct. Keeping in view the facts and circumstances of the case and material on record, the Committee noted that that the Financial Statements of the Company are required to be signed on behalf of the Board of Directors either by the Chairperson of the Company where he is authorised by the Board or by two directors out of which one shall be Managing Director and the Chief Executive Officer, if he is a director in the Company, the Chief Financial Officer and the Company Secretary of the Company, wherever they are appointed, for submission to the auditor for his report thereon. But in the instant case, on perusal of the Financial Statements of the Company for the Financial Year 2019-2020, these were not signed by the Directors of the Company and was signed by the Respondent only.
6. The Committee observed that since the Financial Statements audited by the Respondent were not bearing signatures of Chairperson/Directors, indicating that the same were not approved by the Board of the Company and the Respondent should not have accepted the financial statements for audit and accordingly, should not have signed the same as auditor of the Company. Thus, the Respondent failed to ensure compliance of Section 134 of the Companies Act, 2013. Hence, the Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 16th 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 him in commensurate with his Professional Misconduct.
8. Thus, the Committee ordered that the Respondent i.e. CA. Nishant Gupta, be REPRIMANDED, under Section 21B(3)(a) of the Chartered Accountants Act,1949.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(SHRI JIWESH NANDAN, I.A.S. {RETD.})
GOVERNMENT NOMINEE
Sd/-
(MS. DAKSHITA DAS, LR.A.S.{RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. MANGESH P KINARE)
MEMBER
