Facts of the Case

A complaint was filed by Shri Vineet Rai, Deputy Registrar of Companies, West Bengal (subsequently redesignated as Shri Afsar Ali, DROC, WB), against CA Pratik Kotecha, Partner of M/s Pratik & Co. The complaint arose pursuant to an investigation ordered by the Ministry of Corporate Affairs following large-scale scrutiny of corporate transactions during and after the demonetisation period of November 2016.

During investigation into M/s Aacharan Sales Private Limited, which was found to be a shell company engaged in entry operations, it was observed that tax audit reports for Financial Years 2013–14 and 2014–15 were digitally signed using the Respondent’s credentials. Summons were issued to the Respondent in January 2018 to appear before the Inspectors; however, he failed to appear. The investigation report recommended penal action under the Companies Act, 2013, leading to disciplinary proceedings before ICAI.

Issues Involved

Whether failure to safeguard a Digital Signature Certificate, alleged sharing of DSC with another Chartered Accountant, non-appearance before ROC investigators despite summons, and failure to update registered address constituted “Other Misconduct” under Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.

Petitioner’s Arguments

The Complainant submitted that the Respondent had signed tax audit reports of a shell company and failed to cooperate with statutory investigation despite service of summons. It was argued that such conduct reflected gross negligence and professional irresponsibility, undermining regulatory oversight and integrity of the digital filing system.

Respondent’s Arguments

The Respondent denied filing the tax audit reports and contended that his Digital Signature Certificate had been misused by another Chartered Accountant with whom he shared office space. He claimed that he had no knowledge of such misuse and became aware only upon receiving communication from ICAI. He further submitted that summons were sent to his old address in Kolkata while he was residing in Bengaluru, and therefore he could not appear before investigators. He asserted cooperation with ICAI once proceedings commenced.

Court / Authority Order and Findings

The Board of Discipline examined the material on record, including admissions made by the Respondent. The Board noted that the Respondent admitted sharing his Digital Signature Certificate and failed to place any evidence of corrective action such as filing a police complaint, revoking the DSC, or reporting misuse to authorities. The Board held that safeguarding of a DSC is the sole responsibility of the Chartered Accountant to whom it is issued.

The Board further found that failure to update the registered address and non-appearance before investigating authorities amounted to obstruction of investigation. Even though the Complainant confirmed that no monetary loss was caused to the Government exchequer, the Board held that the Respondent’s conduct constituted gross negligence and violation of professional and ethical standards, squarely falling within “Other Misconduct”.

Important Clarification

The Board clarified that misuse of Digital Signature Certificates strikes at the root of the integrity of the digital compliance framework. Even in absence of financial loss, negligence in safeguarding a DSC and failure to cooperate with statutory investigations amounts to professional misconduct under the Chartered Accountants Act, 1949.

Final Outcome

The ICAI Board of Discipline held CA Pratik Kotecha (M. No. 302119) guilty of “Other Misconduct” under Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949. In exercise of powers under Section 21A(3), by order dated 29 July 2025, the Board reprimanded the Respondent.

Source Link- https://www.mytaxexpert.co.in/uploads/1768892719_ShriVineetRaiDeputyRegistrarofCompaniesKolkatavsCA.PratikKotechaM.No.302119Kolkata.pdf

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