Form ADT-1 for First Auditor: Mandatory Compliance or a Matter of Prudence?

Summary: Section 139(6) of the Companies Act, 2013 separately governs appointment of the first auditor of a non-Government company and, unlike Section 139(1) read with Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014, does not expressly mandate filing Form ADT-1. Although the revised ADT-1 effective 14 July 2025 now includes an option for appointment of the first auditor and ICSI recommends such filing, the enabling electronic form does not by itself create an express statutory requirement under Section 139(6). ICSI has also sought MCA clarification on this ambiguity. Accordingly, filing ADT-1 for the first auditor is advisable as a prudent compliance practice until MCA clarifies or amends the Rules, while past non-filing should not automatically be treated as a statutory default without examining the law and filing requirements applicable at the relevant time.

Is Form ADT-1 Mandatory for Appointment of the First Auditor under Section 139(6)?

A Legal and Practical Analysis after the Companies (Audit and Auditors) Amendment Rules, 2025

The appointment of the first auditor of a company has traditionally been considered distinct from the appointment of an auditor at the Annual General Meeting. For years, a commonly accepted view among professionals has been that filing Form ADT-1 is not mandatory for the appointment of the first auditor under Section 139(6) of the Companies Act, 2013.

However, the revised Form ADT-1 introduced with effect from 14 July 2025 specifically includes an option for appointment of the “First auditor by Board of directors/members/C&AG”.

This change has created an important practical and legal question:

Does the inclusion of the First Auditor in the revised Form ADT-1 make filing of ADT-1 mandatory for an appointment under Section 139(6)?

Let us examine the issue from the statutory as well as practical perspective.

1. Statutory Framework – Section 139(1)

Section 139(1) of the Companies Act, 2013 primarily deals with the appointment of an auditor by the members at the Annual General Meeting.

The fourth proviso to Section 139(1) specifically requires the company to:

• inform the auditor concerned of his or its appointment; and
• file a notice of such appointment with the Registrar within 15 days of the meeting in which the auditor is appointed.

Therefore, Section 139(1) itself contains an express requirement for intimation of the appointment to the Registrar.

2. Rule 4(2) and Form ADT-1

Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014 provides the mechanism for such intimation.

Rule 4(2) provides that the notice to the Registrar about the appointment of an auditor under the fourth proviso to Section 139(1) shall be in Form ADT-1.

Therefore, the statutory linkage is clear:

Section 139(1) → Intimation to Registrar → Rule 4(2) → Form ADT-1

There is, therefore, no ambiguity regarding an appointment falling under Section 139(1): filing of Form ADT-1 is required.

3. First Auditor is Governed Separately by Section 139(6)

The appointment of the first auditor of a non-Government company is specifically governed by Section 139(6).

Section 139(6) starts with the words:

“Notwithstanding anything contained in sub-section (1)…”

It provides that the first auditor shall be appointed by the Board of Directors within 30 days from the date of registration of the company.

If the Board fails to appoint the first auditor within the prescribed period, it is required to inform the members, who shall appoint the auditor within 90 days at an Extraordinary General Meeting.

The first auditor so appointed holds office until the conclusion of the first Annual General Meeting.

An important distinction arises here:

Section 139(6) does not expressly prescribe a requirement to file notice of such appointment with the Registrar.

Further, Rule 4(2) expressly refers to the fourth proviso to Section 139(1), but does not expressly refer to Section 139(6).

This distinction forms the basis of the view that filing of ADT-1 for the first auditor is not expressly mandated by the substantive provisions of the Act and Rules.

4. What Changed from 14 July 2025?

The Ministry of Corporate Affairs issued the Companies (Audit and Auditors) Amendment Rules, 2025 vide Notification G.S.R. 359(E) dated 30 May 2025, effective from 14 July 2025.

Through this amendment, Forms ADT-1, ADT-2, ADT-3 and ADT-4 were substituted.

The revised Form ADT-1 introduced a specific field for the “Nature of Appointment”, which includes:

“First auditor by Board of directors/members/C&AG”

This is an important change.

The electronic form now clearly provides a mechanism for reporting the appointment of a first auditor.

However, while the form was substituted, Rule 4(2) was not correspondingly amended to expressly include an appointment under Section 139(6).

This creates an interesting legal distinction between:

what the electronic form permits/provides as a filing mechanism

and

what the substantive provisions of the Act and Rules expressly mandate.

5. Can a Revised Electronic Form Create a New Statutory Obligation?

This is the central issue.

The revised Form ADT-1 unquestionably provides an option to report the appointment of the first auditor.

However, the substantive provision governing filing of ADT-1, i.e. Rule 4(2), continues to refer specifically to an appointment under the fourth proviso to Section 139(1).

Section 139(6), on the other hand, continues without an express requirement to intimate the Registrar through ADT-1.

Therefore, a reasonable legal view is that:

mere inclusion of a category in an electronic form may not, by itself, be sufficient to create a substantive statutory filing obligation where the corresponding provision of the Act or Rules does not expressly prescribe such obligation.

At the same time, the change in the form cannot be ignored from a practical compliance perspective.

6. ICSI MCA-21 V3 FAQ – An Important Development

The issue has also been specifically addressed in the FAQs issued by the Institute of Company Secretaries of India (ICSI) in relation to MCA-21 V3.

FAQ No. 35 raises the following question:

“ADT-1 is not mandatory for the appointment of first auditor. How to file AOC-4 form without ADT-1 SRN?”

The response acknowledges that Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014 refers to Section 139(1) and not Section 139(6).

At the same time, it recommends that companies file Form ADT-1 even for appointment of the first auditor.

The FAQ further provides a practical solution where an ADT-1 SRN is not available for the first auditor: SRN “Z99999999” may be entered in AOC-4.

This is a significant practical clarification because it recognises the possibility of a first auditor having been appointed without an ADT-1 SRN.

7. ICSI Representation to MCA – 16 April 2026

The ambiguity became significant enough for ICSI to formally approach the Ministry of Corporate Affairs.

In its representation dated 16 April 2026, ICSI sought clarification regarding the applicability of e-Form ADT-1 for, among other cases, appointment of the first auditor under Section 139(6).

The representation highlighted the statutory distinction between Section 139(1) and Section 139(6) and noted that no corresponding filing requirement has been prescribed under Section 139(6).

It also highlighted that the revised e-Form ADT-1 now contains a specific option for the first auditor, thereby creating uncertainty among stakeholders regarding whether the filing has become mandatory.

The representation is particularly relevant because it demonstrates that the issue is not merely academic. There is a genuine interpretational and practical ambiguity requiring regulatory clarification.

8. Legal Requirement vs. Practical Compliance

Based on the present framework, it is useful to distinguish the two positions:

Legal Position

On a plain reading of Section 139(6) read with Rule 4(2), filing of Form ADT-1 for appointment of the first auditor is not expressly mandated.

Rule 4(2) continues to refer specifically to the fourth proviso to Section 139(1).

Practical Position

The revised ADT-1, effective from 14 July 2025, specifically provides an option for reporting the appointment of the first auditor.

Further, ICSI itself recommends filing ADT-1 for the first auditor.

Therefore, from a compliance and governance perspective, filing ADT-1 for a first auditor is now the safer and more prudent approach, particularly for new incorporations.

9. What Should Professionals and Companies Do?

Considering both the legal framework and MCA portal developments, a balanced approach may be adopted.

For new companies

Where the first auditor is appointed under Section 139(6), it would be prudent to file Form ADT-1 after the appointment.

This creates a clear compliance trail on the MCA portal and may avoid difficulties in subsequent annual filings.

For past cases where ADT-1 was not filed

Non-filing of ADT-1 for a first auditor should not automatically be treated as a statutory default merely because the revised form now contains an option for the first auditor.

The legal position applicable at the relevant time, the provisions of Section 139(6), Rule 4(2), the validity of the Board/member appointment and the applicable MCA filing requirements should be examined before concluding that there has been a default.

10. Conclusion

The revised Form ADT-1 has undoubtedly changed the practical compliance landscape, but an important distinction remains between the design of an electronic form and the underlying statutory obligation.

As the law presently stands:

Section 139(6) does not expressly require filing of Form ADT-1 for appointment of the first auditor, and Rule 4(2) continues to refer specifically to the fourth proviso to Section 139(1).

At the same time, the revised Form ADT-1 effective from 14 July 2025 specifically accommodates first auditor appointments, and ICSI recommends filing the form even in such cases.

Accordingly, the more appropriate conclusion appears to be:

Filing of Form ADT-1 for appointment of the First Auditor under Section 139(6) is not expressly mandated by the existing substantive provisions of the Act and Rule 4(2). However, considering the revised ADT-1 and current MCA filing framework, filing the form is advisable as a prudent compliance practice.

Until MCA issues a specific clarification or the relevant Rule is expressly amended, the distinction between statutory mandate and recommended compliance practice should be kept in mind.

Key Legal References

1. Section 139(1), Companies Act, 2013 – Appointment of auditor and requirement to intimate the Registrar.

2. Section 139(6), Companies Act, 2013 – Appointment of the first auditor of a company other than a Government company.

3. Rule 4(2), Companies (Audit and Auditors) Rules, 2014 – Filing of notice of appointment in Form ADT-1 pursuant to the fourth proviso to Section 139(1).

4. Companies (Audit and Auditors) Amendment Rules, 2025 – Notification G.S.R. 359(E) dated 30 May 2025, effective from 14 July 2025 – substitution of Forms ADT-1, ADT-2, ADT-3 and ADT-4.

5. ICSI MCA-21 V3 FAQs – FAQ No. 35 – Recommendation regarding filing of ADT-1 for the first auditor and use of SRN Z99999999 where ADT-1 SRN is not available.

6. ICSI Representation dated 16 April 2026 – seeking clarification from MCA regarding applicability of e-Form ADT-1 to appointment of the first auditor under Section 139(6).

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Disclaimer: This article is intended solely for general knowledge and professional discussion. The views expressed are based on the provisions of the Companies Act, 2013, the rules made thereunder and the regulatory/professional guidance available as on the date of writing. They should not be construed as legal or professional advice for any specific case. Readers are advised to examine the applicable provisions and subsequent amendments or clarifications before taking any compliance decision.