भारतीय सनदी लेखाकार संस्थान

(संसदीय अधिधनयम द्वारा स्थाधित)

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

(Set up by an Act of Parliament)

DISCIPLINARY COMMITTEE [BENCH-III (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

PR/G/449/2022/DD/387/2022/DC/1736/2023

In the matter of:

Sh. Jayant Arya,
Registrar of Companies, Goa,
Daman and Diu, Government of India,
Ministry of Corporate Affairs
Corporate Bhawan, EDC Complex, Plot No. 21, Patto,
Panaji (GOA) – 403001 …..Complainant

Versus
CA. Tej Prasad Paudel (M.No. 236651)
No. 29, 2nd Floor,
1st Main Road Vijay Nagar,
Opp. Vijay Nagar Club
Bangalore – 560040 …..Respondent

MEMBERS PRESENT:
CA. Charanjot Singh Nanda, Presiding Officer (Present in Person)
Smt. Anita Kapur, Government Nominee (Present through Video Conferencing Mode)
Dr. K. Rajeswara Rao, Government Nominee (Present through Video Conferencing Mode)
CA. Piyush S. Chhajed, Member (Present in person)

Date of Hearing: 19th March 2024

Date of Order : 8th May, 2024

1. That vide findings under Rule 18(17) of the Chartered Accountants (Procedure of
Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 dated
25th July 2023, the Disciplinary Committee was, inter-alia, of the opinion that CA. Tej Prasad Paudel
(M.No. 236651) (hereinafter referred to as the “Respondent”) was 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. The Respondent was the auditor of M/s NITP Marketing Services Private Limited (hereinafter
referred to as ‘the Company’). The charge against the Respondent was that he generated Unique
Document Identification Number (UDIN) before getting the Balance Sheet for the financial Year
2018-19 signed by the Directors of the Company.

3. That pursuant to the said findings, an action under Section 21B(3) of the Chartered
Accountants Act, 1949 was contemplated against the Respondent and a communication was

Order- CA Tej Prasad Paudel (M.No. 236651) Page 1 of 3

 भारतीय सनदी लेखाकार संस्थान
(संसदीय अधिधनयम द्वारा स्थाधित)

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

(Set up by an Act of Parliament)

addressed to him thereby granting an opportunity of being heard in person/through video

conferencing and to make representation before the Committee on 19th March 2024.

4. The Committee noted that on the date of hearing held on 19th March 2024, the Respondent
was present through Video Conferencing Mode and made his verbal submissions on the findings of
the Disciplinary Committee. The Committee noted that the Respondent relied on his written
submissions dated 14th March 2024 stating as under:

a. That the UDIN was generated in good faith without any malafide intention and without any
intention to defeat the purpose of UDIN.

b. That there was a breach of trust by another member of ICAI who certified and uploaded the
unauthenticated documents in Form AOC-4 (SRN R21746649), to the MCA portal, based on
which the extant complaint was filed.

c. That he neither certified nor uploaded Form AOC-4.

d. That he is not a repeated offender, and this is the only allegation raised against him in his 9
years of professional career.

e. That he will be more cautious and diligent in the performance of his professional duties in the
future.

f. That it is requested to take a lenient view and pardon him for this one instance.

5. The Committee considered the reasoning as contained in the findings holding the
Respondent Guilty of professional misconduct vis-à-vis written and verbal representation of the
Respondent made before it.

6. Keeping in view the facts and circumstances of the case, material on record including verbal
and written representations on the findings, the Committee is of the view that the Respondent
admitted that he generated UDIN before getting the Balance Sheet signed by the Directors of the
Company i.e., M/s NITP Marketing Services Private Limited for the financial year ended 2018-19.

7. The Committee noted that professional misconduct on the part of the Respondent is clearly
established as spelt out in its findings dated 25th July 2023 which is to be read in conjunction with the
instant Order being passed in the case. The Committee further noted that there is a lack of due
diligence on the Respondent’s part, however, no malicious intention of the Respondent was noted in
the given matter.

8. The Committee, hence, viewed that the ends of justice will be met if appropriate punishment
commensurate with his professional misconduct is given to him..

Order- CA Tej Prasad Paudel (M.No. 236651) Page 2 of 3

 भारतीय सनदी लेखाकार संस्थान
(संसदीय अधिधनयम द्वारा स्थाधित)

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

(Set up by an Act of Parliament)

9. Accordingly, the Committee, upon considering the nature of charge and the gravity of the
matter ordered that the name of CA. Tej Prasad Paudel (M.No. 236651) be removed from the
Register of Members for a period of 1 (One) month.

Sd/-
(CA. CHARANJOT SINGH NANDA)
PRESIDING OFFICER

Sd/- Sd/- Sd/-

(SMT. ANITA KAPUR) (DR. K. RAJESWARA RAO) (CA. PIYUSH S CHHAJED)
GOVERNMENT NOMINEE GOVERNMENT NOMINEE MEMBER

DATE : 8th May, 2024

PLACE: New Delhi

Order- CA Tej Prasad Paudel (M.No. 236651) Page 3 of 3

 PR/G/449/2022/DD/387/2022/DC/1736/2023

CONFIDENTIAL

DISCIPLINARY COMMITTEE [BENCH – III (2023-24)]

[Constituted under Section 21B of the Chartered Accountants Act, 1949]

Findings under Rule 18(17) of the Chartered Accountants (Procedure of

Investigations of Professional and Other Misconduct and Conduct of Cases) Rules,
2007

Ref. No.: PR/G/449/2022/DD/387/2022/DC/1736/2023

In the matter of:

Sh. Jayant Arya,
Registrar of Companies, Goa,
Daman and Diu, Government of India,
Ministry of Corporate Affairs
Corporate Bhawan, EDC Complex, Plot No. 21, Patto,
Panaji (GOA) – 403001 …..Complainant
Versus

CA. Tej Prasad Paudel

No. 29, 2nd Floor,
1st Main Road Vijay Nagar,
OPP. Vijay Nagar Club
Bangalore – 560040 …..Respondent

MEMBERS PRESENT:
CA. Aniket Sunil Talati, Presiding Officer
Smt. Anita Kapur, Member (Govt. Nominee)
Dr. K Rajeswara Rao, Member (Govt. Nominee)
CA. Sushil Kumar Goyal, Member

Date of Final Hearing: 21st June, 2023 through Video Conferencing

PARTIES PRESENT:
(i) Shri Jayant Arya (ROC) – Complainant
(ii) CA. Tej Prasad Paudel - Respondent
(Both appeared from their respective personal location)

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 PR/G/449/2022/DD/387/2022/DC/1736/2023

Charges in Brief

1. The Committee noted that in the Prima Facie Opinion formed by Director (Discipline)
in terms of Rule 9 of the Chartered Accountants (Procedure of Investigations of
Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Respondent
was held prima facie guilty of Professional Misconduct falling within the meaning of Item
(7) of Part I of Second Schedule to the Chartered Accountants Act, 1949. Item (7) of Part
I of Second Schedule states as under: -
Part I of Second Schedule: Professional misconduct in relation to chartered
accountants in practice

A chartered accountant in practice shall be deemed to be guilty of professional

misconduct, if he−
…
“(7) Does not exercise due diligence, or is grossly negligent in the conduct of his
professional duties”

Brief background and the allegations against the Respondent

2. The extant complaint was filed by the Registrar of Companies, Goa (hereinafter
referred to as ‘the Complainant/ the Complainant Department’) wherein it was stated
that the M/s NITP Marketing Services Private Limited (hereinafter referred to as ‘the
Company’) filed its balance sheet for the financial year ended 2018-19 in e-from AOC-4
vide SRN R21746649. Upon scrutinizing the contents of the said e-form by the
Complainant Department, it was observed that the balance sheet for the financial year
ended 2018-19 was audited by the Respondent and that the attachments to the said e-
form viz Auditors report, Balance Sheet, Profit and Loss account and Director’s report
were without the signatures of the Directors and Auditor. Under Section 207 of the
Companies Act, 2013, when the Respondent was summoned and questioned regarding
the unsigned documents, the Respondent was reported to have submitted to have never
signed the balance sheet because the accounts were first supposed to be signed by the
authorised signatory of the Company and provided to the auditor for countersign and
issuance of audit report. Thus, the Complainant alleged against the Respondent that he
had generated Unique Document Identification Number (UDIN) before getting the
Balance Sheet for the financial Year 2018-19 signed by the Directors of the Company.

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Proceedings
3. During the hearing held on 21st June 2023, the Committee noted that the
Complainant as well as the Respondent appeared before it through video conferencing
for hearing. Thereafter, both of them gave a declaration that there was nobody else
present in their respective room from where they were appearing and that they would
neither record nor store the proceedings of the Committee in any form.

Being first hearing, the Respondent was put on oath. Thereafter, the Committee asked
the Respondent whether he wished the charge to be read out or it could be taken as read.
The Respondent stated before the Committee that he was aware of the allegation raised
against him and the same might be taken as read. On being asked as to whether the
Respondent pleaded guilty, he replied that he did not plead guilty and opted to defend
the case against him. The Committee asked the Respondent to make his submissions.
The Committee examined the Respondent on his submissions. The Complainant
thereafter made his submissions. The Respondent made final submissions in the matter.

Based on the documents available on record and after considering the oral and/or written
submissions of the parties concerned, the Committee concluded hearing in the matter.

Findings of the Committee

4. At the outset, it was noted that the Respondent had generated Unique Document
Identification Number (UDIN) before the Balance Sheet of the Company for the financial
Year 2018-19 was signed by the Directors of the Company.

4.1 The Respondent in his defense stated that UDIN was generated in good faith
without any mala-fide intention and without any intention to defeat the purpose of UDIN.
Since it was the first year for the implementation of UDIN to Audit Reports, the
Respondent submitted that the UDIN was generated for printing of the financial statement
before being signed. He submitted to be not aware of the fact that UDIN was not required
to be mentioned in the Financial Statement and that its mention only on Audit Report was
sufficient. Thus, as per him, it was a technical lapse in generation in UDIN. After receiving
the summon notice from ROC, he downloaded the public documents from MCA Portal
and came to know that financial statement was uploaded to MCA Portal without signature
and without his knowledge and consent. The Respondent stated that there was breach
of trust from another member of ICAI who certified and uploaded the unauthenticated
documents in Form AOC-4 (SRN R21746649), to MCA portal based on which the extant

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complaint was filed. The Respondent stated that he had neither certified nor uploaded
Form AOC-4.

4.2 The Committee referred to UDIN details as available on UDIN portal of the Institute
and noted that the status of the said UDIN was stated to be ‘Active’. Further, on review of
the ‘Document details’ as given by the Respondent while generating UDIN, it was noted
that he had provided details in respect of ‘Document Type’, “Type of Certificate’, ‘Figures/
Particulars’ and ‘Document Description’. It was observed that as per the said details, the
Respondent had mentioned to have generated alleged UDIN in relation to statutory audit
of the Company for the financial statements of FY 2018-19 for discharging audit and
assurance function. It was also noted that the alleged UDIN was generated on 29 th
October 2019 wherein the audit report was reported to be signed by him on 30th
September 2019 thus indicating that UDIN was generated by him showing that he had
signed Audit Report of the Company and that UDIN was generated after the lapse of
almost a month therefrom. Further, it was noted that Gross Turnover/ Gross Receipt of
Rs. 2,18,893/-, Shareholder Fund/ Owner Fund of (82,85,140) and Net Block of Property,
Plant & Equipment of Nil amount was mentioned in UDIN ‘document details’ which was
the same as mentioned in the Balance Sheet (C-23 to C-24). Thus, it was evident that it
was the Respondent who had generated UDIN for a set of financial statements which
were neither signed by its directors nor the audit report on such financial statements was
signed by the Respondent himself even though the Institute had advised the members
that UDIN be generated by the members on the signature dates of Audit Reports.

It was viewed that the Respondent had failed to explain with any evidence as to how a
UDIN generated in good faith was put on unsigned documents without his knowledge.
Accordingly, it was viewed that the Respondent’s submission that he was oblivious of the
alleged financials along with audit report being considered as audited documents could
not be accepted. With respect to the Respondent’s plea that it was a separate member
who had certified & uploaded the unauthenticated documents in Form AOC-4 to MCA
portal, it was noted that separate proceedings were taking place against the said alleged
member under Ref No. PR/G/450/2022/DD/388/2022/ DC/1769/2023 and that
proceedings against each member was limited to his role in the alleged act.

5. In the light of above discussion, it was viewed that the Respondent had failed to
exercise due diligence while performing his professional duties with respect to audit of
M/s NITP Marketing Services Private Limited for the financial year ended 2018-19 and
was grossly negligent while generating UDIN before getting the Balance Sheet signed by

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the Directors of the Company. The admission on the part of the Respondent and the
nature of misconduct speaks in volume about negligence while generating UDIN. As a
prudent person it was expected that a member, in his professional capacity, would
conduct his professional duties with utmost care and would follow the expected
standards. Upon overall examination of facts and keeping in view the submissions of the
parties and documents brought on record, the Respondent was held Guilty of
Professional Misconduct falling within the meaning of Item (7) of Part-I of Second
Schedule to the Chartered Accountants Act, 1949.

Conclusion

6. Thus, in conclusion, in the considered opinion of the Committee, the Respondent

is GUILTY of Professional Misconduct falling within the meaning of Item (7) of Part-I of
Second Schedule to the Chartered Accountants Act, 1949.

Sd/-
[CA. Aniket Sunil Talati]
Presiding Officer

Sd/- Sd/-
[Smt. Anita Kapur] [Dr. K. Rajeswara Rao]
Member (Govt. Nominee) Member (Govt. Nominee)

Sd/-
[CA. Sushil Kumar Goyal]
Member
Date: 25th July, 2023
Place: New Delhi

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