ICAI Reprimands CA, Imposes Rs. 1 Lakh Fine for Improper Form 18 Certification

A complaint was filed by the Deputy Registrar of Companies, NCT of Delhi & Haryana, against CA Nitin Garg regarding certification work carried out for multiple companies. Allegations included improper witnessing of incorporation documents, incorrect certification of e-forms, and failure to verify supporting records.

In the case of Draphant Consultants Pvt. Ltd., the Respondent certified Form 18 declaring the registered office at East Punjabi Bagh, New Delhi. However, during spot inspection, the company was not found operating from the stated address. The rent agreement was unsigned by the lessor, and the signatures on the No Objection Certificate did not match. Though the Respondent claimed to have personally visited the premises, no satisfactory proof of physical verification, mandatory under Section 146 of the Companies Act, 1956, was produced.

Issue Raised: Whether failure to properly verify and certify Form 18 for change of registered office amounted to professional misconduct under Clause (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.

Committee’s Order: The Disciplinary Committee of the The Institute of Chartered Accountants of India observed that by signing Form 18, the Respondent certified personal verification of the registered office and confirmed the company’s lawful occupation of the premises.

The Committee held that certification of statutory forms requires independent verification and professional skepticism. In the absence of reliable documentary evidence or credible proof of physical verification, the Respondent failed to exercise due diligence. Thus, he was found guilty of professional misconduct. The CA was reprimanded and fined Rs. 1,00,000, payable within 60 days.

To Read Full Judgment, Download PDF Given Below