Digital Signature Misuse and Negligence: ICAI Reprimands CA for Professional Lapses in Bogus Company Audit Case

The Board of Discipline of the Institute of Chartered Accountants of India (ICAI), set up under the Act of Parliament, has issued an official disciplinary order under Section 21A(3) of the Chartered Accountants Act, 1949, against a chartered accountant named CA. Pratik Kotecha. Shri Vineet Rai is the complainant in this case, and CA Pratik Kotecha is the respondent, against whom the complaint is being filed. The respondent is alleged to have committed professional misconduct.

The initial complaint was filed by Shri Vineet Rai, who was later replaced by Shri Afsar Ali, both working as Deputy Registrars of Companies (DROC), West Bengal, under the Ministry of Corporate Affairs (MCA). CA. Pratik Kotecha (Membership No. 302119) belongs to a firm named M/s. Pratik & Co., located in Kolkata. The issue is related to financial audits and filings carried out by a company named M/s. Aacharan Sales Private Limited, which, when inspected, was found to be a bogus company that only existed on paper, did not have any real business or assets, and was used to carry out illegitimate transactions. The key allegations against the chartered accountant are that he signed tax audit reports of M/s. Aacharan Sales Private Limited for FY 2013-14 on 01.09.2014 and for FY 2014-15 on 01.09.2015. Therefore, he was asked to appear before the investigating officers on February 5, 2018. However, he did not appear for the same. Hence, authorities took penal actions against him under Section 217(8)(c) of the Companies Act, 2013.

After a long and deep investigation, the final hearing took place on December 14, 2024, at the ICAI Bhawan, Kolkata. The Assistant ROC, Mr. Indresh Kumar Singh, appeared as the complainant, and CA Pratik Kotecha was present as the respondent. In his defence, C.A. Kotecha denied filing the audit report and said he had no involvement with the company. Additionally, he claimed he never received the summons in 2018 and was also not even present in the city at that time. He had shifted his residential address but forgot to update the new address with ICAI, which led to a communication gap. He said he has been living in Bangalore for work since 2018; however, his family remained in Kolkata. Additionally, he said his Digital Signature Certificate (DSC) and essential login documents were misused by a CA, Harish K. Gupta, and he was unaware about this misuse and only learned of this when ICAI contacted him.

When the ICAI Board of Discipline deeply analysed the case after reviewing all the evidence and claims of both the parties, it noted that CA Kotecha has admitted to sharing his digital signature with CA Harish Gupta, which is a serious professional lapse. Additionally, he could share any proof regarding his DSC being misused. Even did not even take corrective steps after discovering the misuse. Ignored the summons and did not update his new address. The board said that the responsibility to safeguard a digital signature lies solely with the CA, and in this case, he was negligent. The ICAI considered his negligence as a violation of ethical and professional standards.

In the final order, the board found CA Pratik Kotecha guilty of “Other Misconduct” under Clause (2) of Part IV of the First Schedule of the Chartered Accountants Act, 1949. The ICAI has decided not to suspend him from his post but instead decided to “Reprimand” him, meaning it has given him an official warning for his carelessness; if followed again, legal action will be taken next time.