Punishment for Non-Compliance

Section 147 of the Companies Act, 2013 prescribes following punishments for contravention:

• Punishment for company  –

• Minimum fine Rs.25,000 ,
• Maximum fine – Rs. 5,00,000

• Punishment for officer in default –

•  maximum imprisonment : 1 year
•  minimum fine : Rs. 10,000 , maximum fine : Rs. 1,00,000

If any of the provisions of sections 139 to 146 (both inclusive) is contravened, the company shall be punishable with fine which shall not be less than twenty- five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable withimprisonment for a term which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees, or with both.

minimum fine rs.25,000 , and

maximum fine rs. 5,00,000 or 4 times the remuneration of the auditor whichever is less .

If an auditor of a company contravenes any of the provisions of section 139 section 143, section 144 or section 145, the auditor shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees or four times the remuneration of the auditor, whichever is less.

  

Maximum imprisonmet -  1 year

Minimum fine – rs. 50,000

Maximum fine – 25,00,000 or 8 times the remuneration of the auditor , which ever is less .

It may be noted that if an auditor has contravened such provisions knowingly or willfully with the intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees or eight times the remuneration of the auditor, whichever is less .

1. Consequences of conviction of auditor for contravention of sec. 139 , 143 , 144 or 145 –

1. Refund of remuneration and
2. Payment of damages by the auditor

 

Consequences of conviction of auditor for contravention of sec. 139 , 143 , 144 or 145 –

Where an auditor has been convicted under sub-section (2), he shall be liable to-

• refund the remuneration received by him to the company;
• and pay for damages to the company statutory bodies or authorities or to members or creditors of the company for loss arising out of incorrect or misleading statements of particulars made in his audit report.

Where, in case of audit of a company being conducted by an audit firm, it is proved that the partner or partners of the audit firm has or have acted in a fraudulent manner or abetted or colluded in an fraud, for such act liability shall be of the partner or partners concerned of the audit firm and of the firm jointly and severally.

It may be noted that in case of criminal liability of an audit firm, in respect of liability other than fine, the concerned partner(s), who acted in a fraudulent manner or abetted or, as the case may be, colluded in any fraud shall only be liable.