#Wake-up MCA – Who gets Immunity for filing 23 B under CLSS 2014?

A new amnesty scheme – CLSS 2014 has been introduced by MCA. It is open until 15th October 2014.

The Scheme offers lower additional fee and also immunity from prosecution to the company and officers in default. This scheme is valid for filing of 8 forms – Form 20B, 21A, 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, 23B and 66. These documents can be filed under the Scheme provided their due date was upto 30th June, 2014. CLSS 2014 is attractive particularly considering the benefits. The most important benefit it offers to directors is non-applicability of disqualification under section 164(2) for past defaults provided the defaults are made good by filing the documents under the Scheme.

Who gets Immunity for filing Form 23B?

Form 23B was to be filed by an auditor under the previous regime – Companies Act, 1956. Under the Companies Act, 2013, the responsibility of filing intimation of appointment of auditor has now shifted to the company and this intimation is to be in Form ADT-1. Form 23B was accordingly withdrawn effective 1st April, 2014.

Inclusion of this Form in the Scheme forced MCA to bring back this form on MCA portal for filing. There is no quarrel till this point.

The uncertainty relates to its filing and consequential immunity. The Scheme applies only to ‘defaulting companies’ and not to auditor. This raises a pertinent question that if the Scheme is not extended to auditors, how this form could be included in the Scheme.

Secondly, the immunity has to be applied by filing eForm CLSS and this form can only be filed by a company. This cannot be filed by the auditor.

Who gets Immunity under such a case?

Wake-up MCA and clarify this aspect!

Ashish Makhija: ashish@ashishmakhija.com

 Disclaimer: The views expressed here are views based on my personal interpretation and should not be deemed as legal or professional advise on the subject. If relied upon, the author does not take any responsibility for any liability or non-compliance.




# Is Filing of Form ADT-1 Mandatory For Appointment Of Auditor Under Section 139(6) & (8)?

CA Gopal ji Aggarwal raised an interesting query relating to filing of Form ADT-1

We want to seek your opinion whether the fourth proviso to Section 139(1) for filing the notice of the appointment of auditor is required to be filed with ROC for the First auditors appointed u/s 139( 6) and appointment u/s 139(8) as the said proviso has been made applicable for the auditors appointed in AGM u/s 139(1) only.


If one examines Section 139(1), fourth proviso mandates the companies to intimate RoC about auditor’s appointment and the Form is ADT-1. Similar proviso is absent in Section 139(6) and 139(8).

Technically, since similar proviso is not present in Section 139(6) and 139(8), one can conclude that there is no requirement to intimate RoC about appointment of Auditor. This logic also gets strength from Form ADT-1, which refers to Rule 4(2) of Companies (Audit & Auditors) Rules, 2014. Rule 4(2) relates back to fourth proviso to Section 139(1). This means legally Form ADT-1 is required to be filed for appointment of auditor under Section 139(1) and not under Sections 139(6) and 139(8).

To answer this question in a reasonable manner, we have to refer similar provisions of Companies Act, 1956. Section 224(1) was similar to Section 139(1). Sub-section (1A) stated that “Every auditor appointed under sub-section (1) shall within thirty days of the receipt from the company of the intimation of his appointment, inform the Registrar in writing that he has accepted, or refused to accept, the appointment.” Section 224(5) was similar to Section 139(6) and Section 225(6) was similar to Section 139(8).

Sub-section (1A) of Section 224 dealt with filing of intimation with RoC but it only covered the situations under sub-section (1). This means even earlier Form 23B was to be filed for appointments taking place under Section 224(1) and not under Section 224(5) or 224(6).

Now the pertinent question – Whether the auditors were filing Form 23-B for appointments under 224(5) and 224(6)? The answer is yes as filing of Form 23B became mandatory due to its linking with 23AC and 23ACA. In an indirect way, this became essential in all circumstances i.e. appointment under Section 224(1), 224(5) and 224(6).

The MCA has again linked quoting of SRN for auditor’s appointment in Form AOC-4 (see Col. 10). And this Form does not distinguish between appointments under 139(1) or 139(6) or 139(8). Thus, in an indirect manner,  appointment of an auditor in any situation needs to be intimated to RoC or else the company will not be in a position to quote SRN, which is a mandatory field.

To conclude, law does not mandate filing of ADT-1 in situations under 139(6) and 139(8) but looking at overall conspectus of CA 2013, it seems filing of ADT-1 in all circumstances becomes essential (I have deliberately not used the words ‘mandatory’). 

We await MCA to correct the situation.

 Ashish Makhija: ashish@ashishmakhija.com

Disclaimer: The views expressed here are views based on my personal interpretation and should not be deemed as legal or professional advise on the subject. If relied upon, the author does not take any responsibility for any liability or non-compliance.