ICAI Clears Chartered Accountant In DIR-12 Certification Case

The ICAI has officially closed a disciplinary case involving a Chartered Accountant accused of wrongly certifying Form DIR-12 for appointing a Chinese national as a director of a private company. The complaint, filed by the Registrar of Companies (ROC), Kanpur, alleged that the CA failed to ensure a mandatory security clearance from the Ministry of Home Affairs was attached before approving the appointment. After a detailed review, the ICAI Disciplinary Committee dismissed the charges, concluding that the professional had acted within the scope of his responsibilities.  

Key highlights from the announcement include 

• The complaint was filed by the Registrar of Companies, Kanpur, against the CA for certifying Form DIR-12.  
• The ROC alleged that the CA should have verified the security clearance from the Ministry of Home Affairs.  
• ICAI’s Disciplinary Committee found that the CA had exercised due diligence and was not guilty of misconduct.  
• The committee emphasized that responsibility for providing clearances lies with the appointing company, not the certifying professional.  
• The case involved the appointment of a Chinese national as director of a private company, raising regulatory concerns.  
• The ruling reinforces ICAI’s stance on protecting professionals from undue liability when due diligence is observed.  
• The order provides clarity on the scope of responsibility for CAs in certifying statutory forms.  

The decision is significant for the accounting profession, as it underscores the importance of distinguishing between procedural compliance and professional misconduct. By absolving the CA, ICAI has reaffirmed that certifying professionals cannot be held accountable for omissions that fall under the responsibility of companies or directors themselves.  

This ruling is expected to provide relief to professionals facing similar complaints and will serve as a precedent in future cases involving statutory certifications. It also highlights ICAI’s role in balancing regulatory oversight with fairness to its members.  

Sources: Taxscan, Taxguru, Studycafe